There are many great reasons to start a business in the UAE. The country’s strategic location, attractive tax regime, welcoming business landscape – to name just a few.
One of the more unsung reasons for the UAE’s popularity with entrepreneurs from all over the world, however, is its straightforward company incorporation process.
Provided you have an understanding of the country and its licensing practices, starting a business here can be fast, affordable and uncomplicated.
However, if you are new to the country, or have never started your own business before, the best advice is to work with an expert throughout the company formation process. If you’re looking to gain a basic understanding of the incorporation requirements and procedures, here are few key factors to consider before starting your business in the UAE.
Company formation in the UAE
There are several key factors to keep in mind when starting a UAE business. One of the first is deciding on your business activities.
Your chosen activity must be aligned with the pre-approved list issued by UAE authorities. It is important that you decide on your activities before undertaking any other steps as this will dictate the type of license that you require.
It’s also important to choose your company name upfront. A company formation expert can help you choose a name that fits with the UAE’s naming conventions, most of which are common sense such as not using any word that can be offensive to others. Again, you’ll need to choose your name upfront as you will need to check that it is available to be registered before making your license application.
Perhaps the most important consideration when starting your business here, however, is whether you wish to do business in a free zone or on the mainland.
Free zone company formation in the UAE
Company formation in a UAE free zone is one of the most cost-effective ways to do business in the UAE. Free zones offer comprehensive packages featuring everything you need to start a business – including visas, access to business facilities and a range of exclusive benefits.
Such benefits include the ability to repatriate capital and profits, 100% customs tax exemption and zero currency restrictions. This is, of course, on top of the UAE’s already attractive tax regime – zero percent on corporate and personal income.
To establish your business in a free zone, you must first make your license application to the managing authority of that free zone. In many cases, the initial application can be completed online. As well as your completed application form, you will usually also be required to provide:
- Colour passport copies for all shareholders, directors and managers
- Copies of visas / entry stamps for all shareholders, directors and managers
- A No Objection Certificate (if required)
- A business plan
Mainland company formation
An alternative to free zone company formation in the UAE is mainland company formation.
While mainland companies don’t benefit from customs tax exemptions or other free zone-exclusive incentives, there are able to trade directly with the local UAE market without the services of a local service agent.
When setting up in the mainland, you should make your license application to the Department of Economic Development or local municipality, whichever is relevant in your chosen emirate. The process of making your application is the same as in a free zone. You are simply required to provide your application form along with some basic documentation.
Applying for a trade license is just one of several steps that make up the UAE company formation process.
To do business here, you’ll also need to apply for a visa. The UAE visa process involves an application, followed by a medical test and biometric capturing. As this is such an important step in the process, it is again a good idea to work with an expert to ensure your application is successful and not unnecessarily delayed.
If you decided to set up in a free zone, your visa application process will begin as soon as your license has been issued and will be handled by free zone authorities.
You’ll also require a corporate bank account. Getting access to banking services in the UAE is not always a smooth process for overseas investors. Each bank has its own eligibility and account opening criteria and it’s not always clear whether your application will be successful. Once again, working with a company formation expert can help you overcome this complexity.
UAE company formation cost
If you’re looking for affordable company formation in the UAE, a free zone formation may be the best option. While the cost of setting up a business in the UAE can vary greatly depending on many factors including whether you take on premises and the number employees you have – free zones are often the most affordable approach.
The best way to get an idea of cost before starting your application is to approach a free zone to discuss license packages. Once you have outlined your exact requirements, you will receive a quote for the total cost of setup. While it is not easy to estimate startup costs without knowing specific requirements, you can be sure that there is a package available for all budgets.
Ready to start your UAE business?
Need help getting to grips with UAE company formation? Get in touch with RAKEZ.
We always place our clients at the heart of everything we do, providing them with cost-effective setup packages, modern facilities and first-class services to help them reach their full potential. Blessed with a strategic location, we connect investors to growing markets in the Middle East, North Africa, and Europe, as well as South and Central Asia.
When you work with us, you simply outline your requirements and we’ll do the rest – taking care of the entire application proces