The Business Environment in UAE. UAE offers the business setup sector all the advantages of a highly developed economy. The infrastructure and services match the highest international standards, facilitating efficiency, quality and service for business setup in UAE. Among the benefits for UAE company formation are: Free enterprise system. In Dubai, the authorities have deliberately sought to create an environment which is well ordered without being unduly restrictive. As a result, Dubai offers businessmen operating conditions that are among the most liberal and attractive in the region.
The golden rule regarding companies being established in UAE is that they must have one or more national partners whose share in the company capital must not be less than 51% of the company’s capital. Those intending to establish service companies and/or branch offices, where 100% foreign ownership is permitted, are restricted to non-commercial activities. In general, all commercial and industrial businesses in Dubai should be registered with the Dubai Chamber of Commerce and Industry.
The basic requirement for all business activity in Dubai is one of the following three categories of licenses issued by the Dubai Economic Department (DED) to set up business in UAE:
However, licenses for some categories of business require approval from certain ministries and other authorities e.g:
Contracting and Building Maintenance and some other activities from Municipality
Practicing some trade activities (e.g. jewellery and insurance) requires the submission of a financial guarantee issued by a bank operating in Dubai.
For Inbound Tourism Dh100,000 to be deposited in Bank For Outbound Tourism Dh200,000 to be deposited in Bank These deposits are irrevocable till the license is cancelled.
For Travel Agency Dh100,000 to be deposited at Department of Tourism & Commerce Marketing. This deposit is irrevocable till the license is cancelled.
Building Contracting Companies
For Building Contracting Company License, Dh10,000 to be extra at the Department of Economic Development when the license issued first time.
For General Trading License, Dh15,000 to be extra at the Department of Economic Development when the license issued first time.
Dh50,000 to be deposited at Dubai Customs. This deposit is irrevocable till the license is cancelled.
Following fees are required to be paid for RTA initial approval Rent a Car: Dh5000 Bus Rental: Dh1000 Passenger Transport by rented Buses: Dh1000
Telephones & Telecommunications Equipment Trading
Dh5500 to be paid at Telecommunications Regulator Authority (TRA). This is one time fee.
Property guard & Surveillance Services, Party security & private guarding services Initial approval from Department of Protective Systems, Dubai.
Oilfield & Natural Gas related activities
Initial approval from Ruler’s Court
Initial approval from Central Bank of UAE and Department of Protective Systems
Initial approval from Department of Protective Systems
For supermarket, 2000 square feet area is required.
In the past, each emirate followed its own procedures governing the operations of foreign business interests. In practice, however, Dubai and the other emirates followed the same general system, where foreign companies are operated in one of three ways: with a local sponsor, through a partnership with a UAE national or company, or through a private limited company or public shareholding company incorporated by Ruler’s decree. The Federal Law defines seven categories of business organization which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies. Legal Structures for Business The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. The categories of business organization defined by the Law are:
Of all the above mentioned companies, LLCs are more commonly used by the foreign investors. FDIs are encouraged through Branches and Representative Offices of foreign companies and 100% foreign owned Professional Firms.