How To Start A Business in Dubai

Over the last 10, 5, and 3 years, the United Arab Emirates’s Compound Annual Growth Rates (CAGR) reached 3.3%, 2.4%, and 5.5% respectively. The biggest sector of the United Arab Emirates’ economy is services, which accounts for 40 percent of its GDP.

Company registration in Dubai enables your business to be located in a prime position between Europe and Asia. There has been an increase in businesses in the country, and it can be a simple and easy process to form a company of your own in the region, more notably a free zone company

There are multiple options for company formation in the UAE, including onshore, offshore, and free zone. However, the free zone company model is the most popular with foreign entrepreneurs.

UAE free zone companies offer 0% corporation and personal tax (under a certain income threshold), 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemptions.

What Are the Benefits of Starting a Business in Dubai?

The United Arab Emirates in general, and Dubai in particular, offer a welcoming environment for foreign businesses. So much so that tens of thousands of investors and entrepreneurs take the plunge and decide to start a business in Dubai each year. Overall, the large majority of the UAE workforce consists of foreigners (between 80% and 90%) who find the jurisdiction attractive for multiple reasons. Here are some of the most compelling perks Dubai has to offer.

Supportive Tax System

The UAE offers foreign business owners a low-tax environment. As of 2023, Dubai applies a 9% corporate tax for companies whose taxable income exceeds AED 375,000. For businesses whose income remains below that threshold, the standard corporate tax rate remains 0%. This provides an advantageous taxation framework for startups and smaller structures. In addition, the country’s VAT rate is significantly low compared to other jurisdictions, standing at a flat 5%.

Strategic Location

Starting a business in Dubai means establishing your company at the heart of a thriving professional hub where diversity breeds opportunity and success. Sitting at the crossroads between Europe, the Middle East, and Africa, the UAE is the ideal destination for business owners seeking to expand their operations or establish a foothold somewhere new. The Emirates enjoys a vibrant economy, with the second-highest GDP in the Arab world, just after Saudi Arabia. Thanks to the advanced state of the country’s industries, including technology, hospitality, healthcare, and trade, it’s a suitable environment for various types of ventures.

Stable Government That Supports Entrepreneurship

Between its supportive tax system, high standards of living, open approach to trading, and stable government, Dubai is a great place to start a business. These positive attributes allow the UAE to take a stance in favor of innovation, profitability, competition, and returns, encouraging business owners to be more daring. Thanks to numerous incubators and even some funding initiatives, companies can explore new ventures and grow at a rapid pace.

Advanced Banking

Starting a business in Dubai gives you access to world-class international banks whose streamlined services ensure every aspect of your banking needs is handled securely, privately, and efficiently, giving you peace of mind for your day-to-day operations.

Cutting-Edge Amenities

The UAE places much care and intention into its infrastructure and amenities, resulting in some of the most modern and future-oriented cities on the planet. Dubai is especially tech-driven if the recent launch of the Dubai Center for Artificial Intelligence (DCAI) is anything to go by. Home to the tallest building in the world (Burj Khalifa), cutting-edge technology parks (Dubai Internet City and Dubai Silicon Oasis, for instance), and committed to the integration of blockchain technology for government services, Dubai is known for its investments toward progress.

SFM’s company formation services in IFZA will provide all the help you need to get set up and start enjoying the benefits of establishing a business in a UAE free zone.

A Step-By-Step Guide to Starting a Business in Dubai

Whilst free zone company formation may seem daunting, SFM can guide you through the process and make it as seamless as possible. There are numerous free zones to choose from in the UAE, depending on your business activity and needs.

1. What does your business do?

The nature of your business will have some bearing on where your company will need to be based. Some free zones have restrictions on certain business activities, which will also restrict where you can have your free zone business.

There are several licenses divided into 4 major categories: Trading, Consultancy, Industrial, and Media. Depending on your business activity, we can assist you in selecting the proper license you would need, and it is possible to have multiple business activities from the same category listed under one trade license.

• A commercial license is ideal for starting a business in Dubai if your company model involves the buyi ng and selling of goods and general trading activities. This license covers travel & tourism, logistics, import & export, general stores, sales & trade, and real estate.
• A professional license is suitable for service providers, craftsmen, and artisans. It also covers repair services, beauty salons, medical services, consulting firms, etc.
• An industrial license will be perfect if you wish to engage in manufacturing activities. From metal to textile, paper, and other types of production from raw materials, this license covers a wide range of industrial operations.
• A media license will allow you to pursue media and Internet-related activities, including online consulting and e-commerce.

2. Select Your Location

When starting a business in Dubai, it’s important to take location into account, as this decision will affect several aspects of your business. The main choice is between launching on the mainland or in a free zone. Free zone registration is less restrictive, allowing you to own 100% of the structure with no currency restrictions and a favorable taxation system. If you wish to trade directly with the local market, setting up a mainland company may be a more suitable solution.

3. Choose your company name

Choosing a company name for your free zone company does have some restrictions. Any name that has offensive language is forbidden, as well as anything religious, sectarian, or political. Any personal names used in the company name must be associated with the company owners or directors and use their full name – no initials or abbreviations unless it has a meaning and is followed by the type of activity of the license you intend to register.

4. Finalize all incorporation paperwork

Some free zones will require additional documentation, and the type of business license and activity will determine the list of documents required, such as a bank statement, education degree, or a business plan. SFM can guide you through your entire incorporation process.

5. Obtain your visa

The final step of your company formation in Dubai is obtaining your visa. As well as getting your own visa, many free zones will permit you to apply for a visa for your family, dependents, and employees. How many visas you may be granted is often dependent on the size of the office you will be renting and where your business is located. It is best to seek advice from a professional before setting up your company if you know you’ll need visas for employees and family.

If your situation allows it—if you can be considered an exceptional individual—you could also apply for a UAE Golden Visa. This will allow you to benefit from longer-term residency privileges. Our UAE Golden Visa services are there to help you with your application.

6. Open a bank account

Once you receive your license notification, you will have all the documentation you need to open a UAE bank account. The UAE is home to multiple bank account options– local and international. You can either approach a bank yourself or ask your incorporation partner to assist you. SFM is well connected and partners with top banks in the UAE. We will be glad to introduce you and assist you with the process of your business and personal account opening.

Starting a Business in Dubai: A Few Tips

Whether or not you reside in Dubai as you run your new business, it always pays to understand the local habits and customs of the UAE’s fast-paced, multicultural environment.

Adopt a Positive Attitude

When in doubt, smile! This may sound obvious, but while cultivating a pleasant, positive demeanor is important just about anywhere, in Dubai, it’s paramount. Dubai residents favor individuals who display a strong sense of decorum and modesty and sport flawless attire and impeccable manners. While the country values an entrepreneurial mindset, as a foreigner, you will be expected to play by the rules and be respectful at every turn.

Get to Know the Locals

Starting a business in Dubai also means abiding by local societal customs, particularly when conducting meetings with Emiratis. As a general rule, it is ideal to let locals lead you into social interactions. For example, Dubai residents are business-minded, but they prefer to spend some time exchanging pleasantries before diving into the agenda. They will appreciate you enquiring about their day, family, and health as a preamble.

Remain Flexible and Open-Minded

If you operate your business on-site, expect to rely extensively on in-person networking and word of mouth. Choosing meet-and-greets over email introductions will give you access to a wider client base and make it more likely that people will reach out to you, having met you in person. A few words of Arabic will open many doors, so if you wish to set roots in the UAE for any length of time, consider adding this string to your bow.

Set Up Your Dubai Business With SFM

SFM is here to facilitate the entire process of starting a business in Dubai. Whether you wish to run your company from a Dubai office or from anywhere in the world, our status as a leading corporate service provider allows us to help at every step of your decision-making process. From choosing your jurisdiction and the right structure for your company to filing your paperwork correctly, opening a bank account, managing your accounting, and every other aspect of running your business, we work to make starting a business in Dubai a smooth, straightforward experience.

Our clients are our priority. From our cutting-edge platform to our knowledgeable consultants, we won’t let bureaucratic formalities stand in the way of your success.

To set up your free zone company in the UAE, contact SFM today.