What are the benefits to setting up a business in the UAE?

What do I need to consider when setting up a business in the UAE?

When setting up a business in the UAE, there are some important factors you should consider to ensure the process goes smoothly:

  • What kind of business will you run (company, partnership, branch office or free zone)?
  • Choose the right licence for your business – commercial, industrial or professional
  • Will your business operate in a freezone, onshore of offshore?
  • Gather the correct documentation needed to register your business
  • Settle on a company that is permitted by UAE law (guidelines are strict about this)

Using a professional consultancy such as Charterhouse Lombard can make this process much more straightforward. We provide guidance to ensure you comply with local and national laws and will manage the entire application and registration process, keeping you updated at every stage.

Do I need a sponsor to set up a business in the UAE?

If you wanted to set up a business in the UAE before June 2021 you were required to seek out a local sponsor who would hold a 51% shareholding of your business. However, due to changes in federal law this is no longer required, so foreign owners are now permitted 100% ownership. Some industries, such as utilities and transport, oil and gas exploration and state-owned organisations still do not permit full foreign ownership.

What UAE business set up works best for me?

During the application process you will have to decide the type of business setup you will use in the UAE. The options available are:

  • Onshore company formation

    You can trade internationally as an onshore company, as well as building relationships across the entire territory of the UAE, including free zones.

  • Offshore company formation

    If you choose not to live in the UAE, an offshore company may be the best option. It also offers more privacy in terms of ownership as only one shareholder needs to be registered.

  • Free zone

    Setting up in a free zone allows you to trade with businesses in the same zone. It will also mean you do not have to pay any taxes – even after the tax law changes arrive in 2023.

Am I eligible for a visa?

Entrepreneurs wishing to setup a business and live in the UAE can apply for a business visa, which is part of the Golden Visa system. You can also use it to bring dependents into the country. It is open to professionals from any country who have previously setup their own business in the past and plan to do so again in the UAE. Other eligibility requirements you need to meet include having a business plan or idea that you can demonstrate and proof of your entrepreneurial experience.

Do I need office space?

Whether or not you will need office space in the UAE depends on how you register and setup the business.

If you setup an onshore company, then you will need to rent a physical office space. This could be your own office or a co-working space, which can be more cost effective. Companies that setup in a freezone usually need to rent a physical office space, although there are exceptions that allow you to rent flexi-desks. Offshore companies can use virtual offices that use an UAE address and come with local personnel who can offer secretarial, admin and sales services.

What licence do I need?

There are three main types of licences in the UAE to choose from:

  • Professional licence

    This is used by professionals who wish to offer specific services in the country. If your business is related to a qualification or training you have undertaken, this could be the right licence for you.

  • Trade or commercial licence

    If your business is participating in the trade of goods, commodities or services, this is the correct licence to apply for.

  • Industrial licence

    For businesses that intend to run industrial or manufacturing operations.

You can also apply for a licence in agriculture (farming), tourism (restaurants, hotels etc.) or craftsmanship (carpentry, plumbing etc.)

What bank will I use?

There are a wide range of banks to choose from in the UAE for your business, with Islamic, industrial and commercial banks all available. Large international banks also have a presence in the country. To open account, you will need to attend an in-person interview and submit various documents such as:

  • Share certificates
  • Memorandum and articles of association
  • Trade licence
  • Completed application form
  • Resolution from board of directors
  • Certificate of incorporation
  • Passport copies of all directors and shareholders

Additional documentation may be required, depending on the bank you are in discussions with. Most corporate bank accounts require you to maintain a minimum balance, with figures ranging anywhere from AED 20,000 up to AED 1 million.

How can Charterhouse Lombard help?

Whether you intend to set up your business as an onshore, offshore or free zone entity, Charterhouse Lombard can provide expert formation, registration and administration support at every stage.

Over the years we’ve helped countless organisations to become operational in the UAE, while also offering long-term administration support once their doors have opened for business. Our specialist insight can give you the right start in your new venture in Dubai and to find out more about our corporate services you can contact a member of our team today.