Complete Guide: Direct Way to Register a Business in Dubai

More and more people dream of having their business set up in Dubai. Security, good climate (sometimes a bit harsh), location and glamour make this area of the Gulf one of the most attractive for investors of the future.

But entering here has a cost and rules. In this article I am going to offer you all the information you need in a guide completely designed to solve all kinds of doubts.

This guide provides a comprehensive breakdown of how to directly register a business in Dubai, focusing on the essential steps, legal requirements, and practical tips for success.

How can I registrer a Business in Dubai?

I will guide you step by step through the whole procedure to register a company in Dubai.

Step 1: Choose Your Business Activity

The first and most important step is to decide what type of business you want to run. Your business activity will dictate the type of license you need and which jurisdiction you should register in. The Department of Economic Development (DED) has a detailed list of permissible business activities, ranging from commercial, professional, industrial, and specialized services.

• Mainland Business: Suitable if you plan to trade within the UAE or want to expand across the UAE market.
• Free Zone Business: Ideal for companies focusing on international trade or services outside the UAE.
• Offshore Company: Suitable for businesses that operate outside the UAE without needing a local presence.

Step 2: Select the Jurisdiction

Dubai offers three types of business jurisdictions, each with different advantages. Your decision should be based on your business model and where you plan to operate:

1. Mainland:
   • Businesses can trade directly with the local UAE market.
   • Allows you to open a physical office anywhere in Dubai.
   • 100% foreign ownership is permitted for certain sectors; however, many businesses require 51% local ownership.
2. Free Zone:
   • 100% foreign ownership.
   • Tax exemptions (up to 50 years) and no import/export duties.
   • Ideal for international trade but restricted from directly engaging in the UAE market without a local distributor.
   • Popular Free Zones include Jebel Ali Free Zone, Dubai Multi Commodities Centre (DMCC), and Dubai Internet City.
3. Offshore:
   • Ideal for businesses that do not require a physical presence in the UAE.
   • Used for holding companies or international operations.

Step 3: Reserve a Trade Name

The trade name is the identity of your business and must comply with Dubai's naming regulations. It must:

• Not contain offensive or blasphemous language.
• Not reference any religion or political organization.
• Be unique and not resemble any other registered business name.

You can reserve your trade name through the DED or the relevant free zone authority.

Step 4: Obtain Initial Approval

Before proceeding with the legal formalities, you need to apply for initial approval. This ensures that your business activities and structure are acceptable under UAE law. For Mainland companies, this can be done through the DED, while Free Zone companies will need approval from the respective Free Zone authority.

Documents Required:

• A completed application form.
• A copy of your passport.
• Proof of trade name reservation.
• A No Objection Certificate (NOC) from your sponsor (if you are currently on a work visa).

Step 5: Draft a Memorandum of Association (MOA)

For Mainland companies, you will need a Memorandum of Association (MOA). This document outlines the ownership structure, roles, and responsibilities of the business partners. It is crucial for defining the company’s legal standing and can be drafted with the help of legal consultants.

For Free Zone companies, the setup process is typically simpler, and you may not need an MOA.

Step 6: Choose a Business Location

A physical address is mandatory for registering a business in Dubai. You can:

• Rent or lease office space in Dubai for Mainland companies.
• Take advantage of flexible office solutions or virtual office packages offered by Free Zones.

Step 7: Apply for a Business License

Once the initial steps are complete, you can apply for your business license. The type of license depends on your business activity:

• Commercial License: For trading activities.
• Industrial License: For manufacturing and industrial businesses.
• Professional License: For service-based businesses like consultancies, freelancers, or educational firms.

Submit all necessary documents to either the DED (for Mainland companies) or the relevant Free Zone authority. Once approved, you will receive your trade license.

Step 8: Register Your Company with Relevant Authorities

After obtaining your trade license, you will need to register your company with:

• Dubai Chamber of Commerce (for Mainland companies).
• Ministry of Human Resources and Emiratisation (MOHRE) for labor cards and employee hiring.

Step 9: Corporate Tax Registration

Starting in 2024, Dubai has introduced a 9% corporate tax for businesses with revenue over 3 million AED. Companies below this threshold can qualify for small business relief, which exempts them from corporate tax. However, all companies, whether subject to tax or not, must register for corporate tax through EmaraTax.

To register, follow these steps:

• Visit the EmaraTax portal and create a company profile.
• File annual returns nine months after the tax year ends (e.g., for 2024, file by September 2025).

Step 10: Value Added Tax (VAT) Registration

Dubai also imposes a 5% VAT on businesses whose taxable supplies exceed 375,000 AED. If you fall into this category, you need to:

• Register for VAT through EmaraTax.
• Charge VAT on local sales while exports to non-GCC countries may qualify for zero-rated VAT.

Step 11: Open a Bank Account

Opening a business bank account is crucial for business operations. Some recommended banks include:

• Wio Bank: Ideal for online businesses, no physical office required.
• Local Banks: If you require traditional banking services, opening a local bank account will require more documentation and potentially a physical presence.

Step 12: Visa and Employee Hiring

Once your business is registered, you can apply for:

• Residency visas for yourself and your employees.
• Labor cards through the MOHRE.

For hiring employees, ensure your business license includes visa slots. You will need to pay for the visa, health insurance, and employee benefits, including return flights.

Additional Considerations:

• Annual Renewal: Business licenses must be renewed annually (or every two years for some Free Zones). Renewal fees vary but typically cost around 15,000 AED per year.
• Legal Advice: It is always beneficial to consult with a legal or business setup expert, especially for complex businesses.

If this guide does not help you, which it surely will, you can watch this video that shows you step by step the whole procedure.

Final Thoughts:

Setting up a business in Dubai can be a smooth and straightforward process if you follow these steps carefully. Whether you choose a Mainland, Free Zone, or Offshore company, Dubai’s competitive tax system and strategic location make it a prime destination for entrepreneurs.

Ensure you conduct thorough research and, if necessary, seek professional advice to navigate the complexities of business registration and compliance.

Reference Links:

1. Department of Economic Development (DED) – Direct link to the official DED website where entrepreneurs can start their business registration process: www.dubaided.gov.ae.
2. EmaraTax Portal – Link to the official UAE corporate tax registration portal: www.tax.gov.ae.
3. Dubai Chamber of Commerce – Resource for registering businesses and connecting with the local business community: www.dubaichamber.com.
4. Wio Bank – Link to Wio Bank’s website for setting up online banking for businesses: www.wio.io.

Sharif Badell

With 10 years of experience helping people navigate the process of obtaining visas and validating official documents in the UAE, I ensure that your paperwork is in order, from residency visas to Emirates ID validation. My expertise simplifies the process, ensuring that all required documents are up-to-date, accurate, and ready for submission, making it easier for you to access essential services without any delays. You can view update my posts about UAE information in hubpages and contently