Setting up a business in UAE can seem like a daunting task; the complicated paperwork, seeking approvals and keeping track of several types of fees. Having some form of guidance is always helpful, especially when it involves company formation in UAE. Here are some key things to keep in mind before you decide to setup a business in UAE.
1. Choose your business activity
This is one of the first and most important steps to take; selecting and finalizing a business activity makes or breaks your business venture. It’s important to look into what the activity pertains to, the market for that business, and its profitability. It’s also crucial since certain business activities have restrictions imposed on them and how they’re carried out.
Prior research into business activities helps in informing you which authorities you need to seek approval from. Every type of business activity in the UAE has an official body governing it; and before setting up and officiating your company, you are required, by law, to get permission from them. For example, if you’re looking to set up a restaurant, you need to get approval from the Dubai Municipality; for car/bus rental businesses, approval from the Roads and Transport Authority is necessary; any activity involving the sale of gold and jewelry business requires the approval of Security Industry Regulatory Agency.
2. Naming your business
The name of your business defines you, it’s what people use to identify your brand. However, there are certain limitations when it comes to naming your business. UAE holds respect to the highest standards so its important business names in the UAE are not of defamatory nature.
New businesses should pick names without religious references, or offensive words, and make no reference to a country. You should stay clear of names indicating your political affiliation, or abbreviated names.
It’s also important you present a list of names when registering for one as the authority in charge will be conducting research to see what names are available.
3. Choosing your location
Finding a location for your business can be difficult due to rising rents or localities that don’t suit your business activity. Having an office address is a requirement for any business registration; and since every entrepreneur doesn’t require a physical space, UAE has rolled out different initiatives to assist with the same. There are several alternative ways to find an office address without having to empty your pockets completely, these are:
- Flexi/smart desks: These are perfect for entrepreneurs that require small office places for themselves to work from. The idea is to have a desk and chair in whichever business center you’ve registered with. It’s a cost-effective way to put down an office address while also having a space to run your business from.
- Virtual offices: Virtual office setup in UAE is an incredibly popular initiative that plenty of business owners use to their advantage in the country. As there are various businesses that don’t require the presence of a physical office, the concept of a virtual office allows them to use the location as a virtual address when registering their business.
4. Memorandum of Association Agreement
Much like all other documentation, your Memorandum of Association Agreement is an important document that holds great power in terms of company dynamics. This document specifies a vast range of specifics, according to which your company should function.
The MOA states the limitation of shares and the company’s scope of powers. It also provides clarity on the boundaries that cannot be crossed by any member, and provisions according to which the company must function and carry out operations. In the case where these provisions have been defied, it’s considered to be a breach of agreement – and the MOA states what penalty for the same must be.
5. Final Trade License
You can apply for a trade license after completing the steps above. Whether you want to obtain a commercial trade license, industrial, professional, or tourism – this can only go forward when you have the rest sorted. Failure to submit the completed documents leads to unnecessary delays and in some cases a rejection of your trade license application.
Once you’ve obtained a trade license, you can then begin with your business activities, apply for an investor visa, apply for your family’s residence visas, and begin hiring employees, and applying for their visas.