Step-by-Step Guide to Setting Up a Business in Dubai from India

Are you looking for a fabulous business avenue for your entrepreneurial dreams? If yes, Dubai could be a place you can’t afford to ignore. From favorable business environments to lower taxes, easy business setup, world-class healthcare, full-fledged government support, and multicultural people, there are hundreds of reasons why entrepreneurs are rushing to invest in Dubai. Whether you are looking to expand your existing business to Dubai or want to start a new venture altogether, Dubai has emerged as a dream commercial destination among new-age entrepreneurs. However, for them, it is necessary to know how can they set up a new business in Dubai.

Dubai recorded its GDP of AED 429 million in 2023, which was an increase of 3.3% from 2022. In addition, Dubai managed to retain the title of being the lowest-risk nation in the Middle East and Africa (MEA) region in 2023. It simply means that Dubai is considered an easy-going business destination for entrepreneurs and investors across the globe.

If you are looking towards a business setup in Dubai, you must understand a few major elements related to the same.

Economic Zones: Mainland, Free Zones, and Offshore

Prior to doing company incorporation in Dubai, you need to be aware of the different economic zones in Dubai. They are mainland, free zone, and offshore.

1. Mainland

The mainland zone is a feasible choice for those who look forward to flexible business setup for direct trade in the local UAE market and also globally. These companies are entitled to work anywhere in the UAE and their operations are not restricted to specific areas. It has become a lot easier for investors coming from other countries to get total control over their business in a majority of regions. However, the businesses set up in this zone come under the purview of UAE laws and regulations and are free to trade within the local and international markets.

Benefits

• Flexible trade opportunities both local and globally
• Total ownership
• Local flexibility
• Full freedom to pick any location for office
• No individual income tax
• 5% VAT and 9% corporate tax on gains above AED 375,000

2. Free Zone

Dubai’s free zones are meant for those entrepreneurs who want to enjoy total ownership of their company. This is the most popular option for company incorporation in Dubai. The government brought the concept of the free zone with an aim of generating foreign interest for business setup in Dubai. The free zone is a special economic region where business owners get full business ownership, 9% corporate taxation (for profits above AED 375,000), and zero personal income tax.

Benefits

• Total foreign ownership
• Restriction-free any currency transaction
• Corporate-friendly taxation system
• 1oo% repatriation of capital and profits
• Dedicated industry-centered support

3. Offshore Firms

Offshore companies can be listed in a free zone and get the same perks. The major difference between a free zone business and an offshore business is the business operations. Offshore companies are entitled to run business activities other than in the UAE and not in the region. There is no restriction on minimum capital paid prior to company incorporation in Dubai.

• Complete foreign ownership
• Superior levels of privacy and protection
• No minimum capital requirement

Types of Business License

There are primarily three types of business license issued by the Department of Economic Development (DED) in Dubai.

1. Commercial Licence

A Commercial Licence enables an entrepreneur to set up a company in Dubai that is essentially involved in trading or the buying and selling of items. This business license is meant for businesses involved in import & export, logistics, sales, general stores, travel & tourism, and real estate.

2. Industrial Licence

The Industrial Licence is given to businesses involved in manufacturing chores that convert natural materials into final products either manually or mechanically. This license includes businesses involved in textile manufacturing, metal making, and paper production.

3. Professional Licence

The Professional Licence is for service-based businesses, artisans, or craftsmen. A few examples of this type of license include medical services, parlors, and repair services.

Steps To Register A Company in Dubai

Below is a step-by-step guide on how to do a business setup in Dubai.

1. Determine your business activity

First and foremost, you need to determine the regular operations of your business as this would help you fix a specific business model. This is also important as you may need to get prior approval from concerned authorities before starting the business operations.

If you want to register your business in a particular economic business zone in Dubai, you must opt for a free zone business setup in Dubai. For a business setup in Mainland, you can register your company as either a sole business or LLC, given the specific business activity.

2. Pick A Company Name

Now, it’s time to choose a business name. According to experts, it is necessary that you choose a name that is related closely to your business operations as this would heighten the significance of your business.

However, you must abide by the trade name reservation guidelines while choosing a business name. Don’t use provocative terms that may hurt one’s religious sentiments.

3. Choose The Business Location

The location of your business is extremely crucial. This is because it gives exposure to various economies, and affects the availability of resources, tax regulations, infrastructure, etc. As already mentioned, you can choose from the three types of economic zones available in Dubai.

You can check the pros and cons associated with choosing a specific economic zone before choosing a particular zone to avoid any surprises at a later stage. It is better to consult a business services organization for valuable help in zone selection.

4. Prepare LSA or MOA.

It is recommended to seek the help of a local service agent (LSA) if you have plans to do a business setup in Dubai mainland. Such an expert would merely provide full-fledged support in procuring relevant licenses and other crucial permissions; they wouldn’t meddle in your business decisions. Furthermore, even on the mainland, you are no longer required to give a UAE national a 51 percent stake in your company.

5. Submit Your Application for a Business License.

Moreover, keep in mind that mainland companies are obliged to follow the DED for a business license. On the other side, kicking off a business in the Dubai free zone needs an application to their concerned authorities. Nevertheless, once you get a business license, go and secure all external approvals from several other governing departments, if applicable.

6. Open a Bank Account.

Once you are done with all the crucial licensing formalities and paperwork, you are suggested to open a business bank account on behalf of your business. Hence, pick a bank that best matches your company’s needs and offers various benefits and relaxations that intend to optimize the setup cost.

The Conclusion

Whether you are starting a new business altogether or looking to expand your existing business in Dubai, we, at LicenseBox, can help you all your business ventures in Dubai. Don’t take stress related to business setup in Dubai as our business formation experts can help you at every step of company incorporation in Dubai of any type. Get in touch with us today to discuss your requirements.