How to start a small business in the UAE

The UAE is considered to be the ideal country to conduct business in for several reasons. From its business-friendly policies all the way up to favorable taxation laws, the benefits of starting a small business in the UAE are many. The process of establishing a small business setup in the UAE isn’t difficult by any means, and launching your own business can be done within 2-3 weeks. In this article, we explore the step-by-step process on how you can start your own small business in the UAE.

1. Decide the venture’s name and activities

This is the first step to turning your business dreams into reality. Finalize the business activity you plan on engaging in and what products or services you will provide. Once this is set, decide on a trading name for the business and reserve it. Trade name reservation is an important step as it is a mandatory procedure required for the application of the approval certificate. Ensure that the name of your business is unique and follows the naming convention protocols set by the UAE Government.

2. Select the appropriate legal structure

After deciding the economic activity your business will engage in as well as its trade name, decide what legal structure you would like your company to follow. There are many options you can choose from including, 100% ownership, which is allowed to locals, or expatriates who set up their business in a free zone, or a Limited Liability Company, wherein part ownership (at least 51%) is given to a local sponsor.

3. Choose your locational jurisdiction

Thinking about and deciding on the location of your business is a crucial step in the company formation process. The two main options given to most business owners are free zone locations and mainland locations. Both have their own set of advantages, with mainland locations being closer to the market and free zones like SPC Free Zone providing perks like 100% ownership or ease of licensing amongst other benefits. Select your location based on the type of business activity you will engage in as well as the legal structure of your business amongst other factors.

4. Apply for a business license

This is by far the most important requirement to starting a business in the UAE. It is a mandatory requirement for businesses to have a valid license for business activities conducted in the UAE. Obtaining the relevant license is a simple process that involves applying for the license to the Department of Economic Development (DED) or the Municipality of the emirate your business is set up in. If you are choosing to set up your company in a free zone, apply directly to the concerned governing authority within the free zone.

5. Documentation and legal formalities

Based on your business’ requirements, there may be additional paperwork and legal formalities required to be completed before you can start business operations. Formal permits, initial approval certificates, and other government forms all have to be filled and filed to the relevant authorities to be able to actually start your business in the UAE. Additionally, this also includes setting up a corporate bank account and applying for visas (in case you are from outside the GCC). Make sure to do your research with respect to the type of business you plan on starting, as these legalities slightly change with various types of businesses.

Starting a small business in the UAE can be confusing if you don’t know what to do and how to go about doing it. Our business experts here at SPC Free Zone will support you in the process of setting up your business from A to Z. Contact us at 800 SPCFZ to talk to our business consultants and begin your company formation journey today!