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Setting up a Startup in Dubai – 6 Things to Know

Dubai is a city that is perfect for setting up a startup. Dubai has one of the best business infrastructure and ecosystem that support business growth.

There is a lot of opportunities to be tapped by businesses here. The diverse multi-national population forms the perfect audience pool to test out any new ventures.

Why choose Dubai for Company Formation?

Main reasons to choose Dubai for Company Formation:

  • Ease of Doing Business
  • Government Support
  • Cost-effective Business Setup Package
  • Networking Possibilities
  • Diverse Talent Pool
  • Easy Access to Global Markets
  • Robust Transport and Logistics Support
  • Technology Infrastructure, and,
  • Many more components that are supporting the startup growth

However, there are certain key areas to be considered while setting up a startup in Dubai. Reducing the overall business setup cost is the key focus of all startups.

Startups would require a lot of investor funding for Product Development, Testing, and Software Development.

Key Focus Areas to Know Before Setting up a Startup in Dubai

Startups will be always looking at the following to achieve business sustainability:

  • Lowering the Company Setup Cost, and,
  • Reducing the Operating Expense

There are a handful of choices for an investor looking for startup opportunities in Dubai.

However, the following parameters have to be considered for assured success in company formation in Dubai.

1. Assess all the Options in Detail

Dubai has a lot to offer for startups and entrepreneurs looking for setting up their stores.

There are 40+ Free Zones in the UAE that offer various business setup packages. Starting from Freelance Permits to fully-furnished Executive Office Packages, they have it all.

Intending to strengthen the local presence in UAE, then LLC business Setup is the perfect option. Investors can choose from a wide range of business activities spread across retail, trading, services, etc.

They can also look at opening a Civil Work Company for delivering professional services in the Mainland of Dubai.

Dubai offers a wide range of business setup options for entrepreneurs. They can take a well-informed decision in choosing the right business jurisdiction.

Investors can choose Freezone, Mainland or Offshore based on their business activity and growth prospects.

 2. Start a Service Company & Get 100% Ownership

The key benefit of a Services Company in the mainland of Dubai is:

  • Getting 100 % ownership of the company, and,
  • Operating & Expanding the business in the local UAE market.

The foreign investor must appoint a Local Service Agent (LSA) as a Government liaison. The LSA Agreement has to be renewed yearly by paying a fee.

Also, the Free Zones in Dubai will provide investors with a host of benefits such as:

  • Tax Savings – No Corporate or Income Tax
  • 100% Profit Repatriation,
  • 100% Foreign Ownership,
  • World-class Business Infrastructure,
  • Attractive Company Formation Packages, etc.

The Free Zone is the perfect choice for:

  • Service Companies,
  • Overseas Exporters, and,
  • International Trading & Logistics Companies

Having a Zero Customs Duty for Import/Export to and from the Free Zone makes it an ideal choice for trading companies.

Also, the Freezones of Dubai is furthermore attractive option for investors due to:

  • Easy access to the Airports and Seaports of UAE,
  • On-Premise Customs Clearance,
  • Warehousing Facilities, etc.

3. Find an Experienced Consultant

For foreign investors and startups venturing into the UAE market, it is best to proceed with a seasoned Business Consultant.

The company formation process in Dubai is mostly straightforward. It requires a few paperwork, documentation, and approvals.

An expert PRO agent would be handling all of these tasks on behalf of the investor and ensure a hassle-free company set up in the UAE.

Hence, to save time, money, and effort it is best to take the assistance of an expert business consultant and have a comfortable business setup in the UAE.

4. Choose Business License Rationally

Choosing the Business License is one of the most important steps in the company formation process. Based on business activity, you must choose the right business license.

Dubai is stringent in terms of the law. The companies operating specific business activities must be having a valid business license.

Else, the company will be penalized with fines and license termination.

For example, a heavy equipment trading business in UAE must be having a trading license with activity specified as heavy equipment trading.

A general trading license would not suffice for such special activities.

5. Investor Visa and Employee Visa Quota

The investor must have a clear understanding of the following:

  • Investor Visa Guidelines,
  • List of Restricted Nationalities,
  • Complications of Visa Processing for Certain Passports,
  • Additional Documents Required, Visa Fees, etc.

Based on Government Regulations, immigration has certain criteria in issuing residence visas to a few nationalities, demographics, and passport holders.

The Free Zones have Business Setup Packages based on the Visa Quotas.  The Visa costs vary across the free zones and in the mainland. Free Zones have fixed Visa Quotas for their companies.   

Also, there are some additional costs that the investors have to be aware of: Fees for establishment card, immigration process, and visa processing.

6. Forming an LLC business Startup

Another interesting option for Business Setup for Startup is by forming an LLC company. If the investors are looking for a long term business plan, and have a UAE National to support them, they can look at forming an LLC Company.

The major stake must be owned by the UAE National (51%) and rest by the foreign nationals. LLC Company will give more flexibility to the investors to choose their office location, add staff, and, manage the business.

Also, LLC Company Setup helps in penetrating the local UAE market more effectively. Expand business easily through opening branch companies.

LLC Company Setup in Dubai is a prospective option for Startup due to:

  • Ability to participate in government project tenders, and,
  • Expand business activities through a wide range of activities (listed with the Department of Economic Development (DED))

So in a nutshell, selecting a business jurisdiction that helps in achieving sustainability, convenience, and costs is the key to the success of setting up a startup in Dubai.

Dubai has a lot to offer the investors, it is a matter of making the right choice to achieve business excellence.

To know more about Startup Business Setup in Dubai, connect with our experts today!

Contact: Aurion Business Consultants