Launching a Startup in the Dubai, UAE: A Step-by-Step Guide

May 22, 2024
startup in dubai, UAE

So you’ve decided to take the leap and launch your innovative business idea in the UAE. Well, we’re here to help you figure out how to start and the steps you need to take. Here’s your comprehensive guide to kickstarting the best startup business in the UAE.

Firstly, Why Choose the UAE?

  • The UAE boasts one of the world’s largest and most diverse economies, ranking incredibly high on the ‘ease of doing business’ index. 
  • Its strategic location allows businesses to reach markets in Asia, Africa, and Europe. The UAE is a gateway to the rest of the world. 
  • Its thriving business ecosystem provides easy access to investors and venture capitalists, along with tons of opportunities to network. 
  • The UAE government actively encourages entrepreneurship through streamlined business setup services, funding programs and incubators for startups, emphasizing innovation in rapidly developing sectors such as Fintech, and free zones that provide great tax and ownership benefits.

Once you’ve decided that the UAE is fertile ground for your startup, there are a few steps you can follow to kickstart your process of setting up a company in Dubai or elsewhere in the UAE.

Cement Your Idea

To begin with, gain a clear understanding of your business idea. What markets or audiences will you cater to? Where are these audiences based within the UAE? Do you want to begin on a smaller or larger scale? 

Conducting market research, creating a business plan, and building a strong team are key steps you would follow at this stage. 

Select Your Business Structure

Conduct careful research to identify which business structure you’d like to follow. Connecting with a business setup specialist can be extremely helpful as well. Here are some pointers to get you started:

  1. Free Zone
    The Dubai government introduced the idea of free zones to attract international businesses. These zones are designated special economic areas where business proprietors have complete ownership of their business, benefit from a 9% corporate tax rate (applied to UAE businesses on profits exceeding AED 375,000), and pay no personal income tax.
    The benefits of establishing your business through a free zone are numerous. For example, SPC Free Zone cuts through the bureaucratic red tape for entrepreneurs, providing them with instant licenses for their chosen business activities. It further provides a guaranteed banking account within three working days, unlimited visas for partners, investors, and employees, and a free online cost calculator tool that provides entrepreneurs with a clear view of their total business setup costs. 
  2. Mainland
    As a mainland company, you will have access to trade freely with any entity within the UAE. However, mainland business setup typically involves more costs than a free zone. This includes licensing fees, registration charges, and mandatory office space rental. It can also restrict the number of employee visas you can sponsor, based on office space size.
  3. Offshore 
    Offshore company setup can be an affordable option. With no premises permitted and affordable licensing and registration, overheads are low. However, offshore companies cannot undertake business activities inside the UAE and are not permitted to have a physical office in the country. Offshore company owners are also not eligible for UAE residency visas.

Select Your Business Activities 

The next step on your checklist is to select exactly which business activities you want to apply for. The available business activities depend on the jurisdiction you have selected, and some licenses require third-party approvals from specific jurisdictions of the UAE government, as well.

By connecting with a free zone, your business setup services can be streamlined, fast-tracking your approval process and making it hassle-free. Here are the different types of licenses you would have to choose from.

1. Commercial license: Under this category, you’ll find specific licenses for general trading activities such as the buying and selling of goods, imports and exports, sales, logistics, travel and tourism, and real estate.

2. Industrial license: If your startup is involved in manufacturing, this is the category you need to browse through. From textile to paper and metal objects, this segment covers it all.

3. Professional license: For those who wish to provide a specific service such as consulting, medical services, beauty and wellness, or repair services, a professional license is the way to go.

Browse through the full list offered by SPC Free Zone here to gain clarity on which business activities you can select for your startup business in the UAE. The more knowledge you have on business activities, the more accurate your business setup cost calculations will be.

Applying and Entry Permits

With a free zone like SPC Free Zone, your application process takes just two steps. You’ll require basic paperwork, such as passport/ID copies. You’ll also need to have a business name carefully selected. Remember, the UAE has specific guidelines for naming your business. Some of these are:

  • The name must be unique and shouldn’t contain elements of any other existing UAE company names
  • The name must be in line with the cultural and religious values of the UAE, ensuring it excludes offensive or inappropriate words 
  • The name must be compatible with the nature of your business 
  • The name must have an abbreviation of the business structure you’ve chosen, such as LLC, etc.

After this stage, you will also need to open your business bank account. Through SPC Free Zone, you will receive a guaranteed banking account within three working days, ensuring this isn’t an extra process for you to navigate.

Once you register for e-channel services and apply for your entry permit, you gain access to a temporary visa, usually valid for up to 60 days. You can then activate your status, after which a medical test is required. You may then apply for your Emirates ID card

To summarize, setting up a business in the UAE is a relatively simple and easy process. Connecting with the right entities can fast-track the entire process for you, making sure that your entrepreneurial dreams take flight.

A call away from a new future.

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