Can an expat build his own company in the UAE? Absolutely yes! Apart from real estate investments, you can also venture into businesses if you want to build your financial empire in the country. It’s essential for expats to think about this too because employment here is not forever. You can’t just rely on your salary to make a living.
If you want to switch from a simple life to a luxurious one, you will find ways to do it. Thanks to the UAE government that they allow foreigners to have their own brand in the country!
UAE Company Set-up FAQs
When building your own company in the UAE, you have to follow certain steps in order to be successful. There are differences when a local and an expat start his own business in the country.
Some of the essentials you should think about are your trade name, type of business, location of your business, ownership, and business fees. Here are some of the important details you should be aware of:
1. Where can I submit my business proposal?
In the UAE, the Department of Economic Development (DED) is responsible for overseeing business activities and transactions in the country. A business proposal is not necessarily needed but you should seek the guidance of this agency when you need your business license, your legal structure, the ownership, and other matters relating to the type of business you are planning to build.
2. What should I remember when setting up my business in the country?
For your successful startup, there are a couple of tips that we want to share with you. Consider these things you are setting up your business so you can avoid losses early. Remember that one of the hardest processes of business happens during the startup.
3. You should decide what type of business you are going to set up.
Over 2,100 types of businesses are on the list of DED. You are free to choose what you prefer on the list. There are businesses in the commercial, tourism, industrial, and professional industries.
Your permits, licenses, and approval will depend on the type of business you are going to choose. Some require more than one approval from the government while some can be operated with basic permits.
4. Make sure you have your target market before you apply for permits.
Going through your business plan is an important part of the process. Before you start applying for permits, make sure that you have identified your target market already.
Don’t operate without defining who your customers are. You can use this as a basis for the type of business you are going to choose or vice versa.
5. A good location is key to success.
If you are not going to operate online, a good location will be your key to success. However, since you are an expat, it’s only possible to build your business in the free zone areas in the country.
This means that you should look for options in the free zone areas. Whether it’s in Dubai, Abu Dhabi, or other emirates, you have to make sure that you are in the right place, else, your application will not be approved by DED.
6. Foreign ownership has restrictions.
The reason why you are encouraged to find a good location in the free zone areas is that you can own 100% of your business if you will build your physical store within the area permitted by DED. But, if you still want to push through with setting up your business in other locations, for example, in the Dubai mainland, you have to seek the advice of DED and apply for a Dubai business license.
Note that they may inform you about the foreign restrictions in terms of ownership. They may request you to look for a local partner if you really want to push through.
7. Get a trade name.
One of the rules you have to follow when getting a trade name is indicating the nature of your business in your company name. The DED has guidelines when choosing a trade name and as much as possible, you should follow them so you can get approval easily. Your trade name doesn’t have to contain the nature of your business if it’s going to be a branch of the main business.
8. Know the legal structure and the laws that come with it.
Some of the common legal structures are stand-alone companies and branches of the main business. You may also want to stick with your knowledge regarding sole proprietorship, partnership, and corporate.
Each structure has different laws and if you choose to put it up in a free zone area, different rules will apply. You need to be aware of this beforehand so you can have clearer questions when you ask DED about the business structure that’s right for your business.
9. Know the overall startup costs.
If you are going to operate in a physical location, you should consider the amount of capital you need to set up an office or renovate a store. Your startup costs will also include business license fees, permits, and other expenses related to registering your business.
The startup costs are going to be expensive. You need to allocate time in order to estimate the capital you are going to use for your business. If you have partners, you might want to discuss this matter with them.
10. Look for a local partner.
If you are not confident to build your business alone, you should consider looking for a local partner. DED licenses will require you to look for local partners and agents especially if you are a foreigner. Local support will help you in a lot of ways including managing and marketing your business.
When looking for a local partner, find someone who is trustworthy and reliable. Don’t entrust your money and business to a fraud. Ask the guidance of your friends who have been in the country for a while now or who have businesses too. Asking for their help will be a big contribution to the success of your future business.