The UAE has a very sophisticated structure of different business zones and holdings to allow different international companies and businesses to operate successfully inside the country while still protecting the local economy.
As about 80 per cent of the UAE’s population is expatriate, it is important that the national interests are safeguarded. One way of doing this is through the requirement that any company or business have at least 51 per cent shareholding by UAE nationals.
However, there are exceptions to this rule in both directions. These include:
- The company registered and housed in any of the country’s many free zones.
- In professional or artisan companies, 100 per cent foreign ownership is allowed.
- When a foreign company sets up a representative branch in the UAE, 100 per cent foreign ownership can be retained.
- Professional licenses for certain occupations such as architect, doctor or artists can allow 100 per cent foreign ownership – through a UAE national must act as a service agent in procuring such a license.
- On the flip side, there are cases where the law requires 100% local ownership.
- There are circumstances under which a Gulf Cooperation Council (GCC) nationals can take 100% ownership.
To begin the procedure of registering a company on the UAE mainland, you must go through the following steps:
Find the right local sponsor
This is not something to be taken lightly, as the local partner may want heavy or limited involvement in your company. Do you want an active partner who can assist you with any problems you may face, or would you rather a silent partner who just lends his name to your company registration in exchange for annual shareholding fees? This should be thoroughly discussed with your prospective sponsor and an adequate arrangement made.
Working with someone you trust can prevent any problems that could potentially develop down the line.
Decide on who you are
All company names and activities must be applied for and approved by the Department of Economic Development (DED). The department has standard application forms and a process that must be followed, with various documents necessary to be submitted. If you require assistance with any of these steps, we are at your disposal to help walk you through.
Once you have approval from the DED, you have an identity and a purpose and you can move on to the next step.
Find the right location
Are you going to be a virtual or online business, or do you need premises in order to start trading? If you want a physical store, which the majority of business owners still desire, you will need to find the ideal location. This can take time and consideration but it is all in aid of the eventual success of your business. Your tenancy contract will be part of the documentation required to become fully registered for trade.
Do the final paperwork
The next steps to take are to sign a Memorandum of Association with your sponsor and submit that with your tenancy contract, license application and application fee to the DED. These must be proper legal documents prepared for you by a legal firm, which we are able to assist you with. These documents will specify the legal shareholding and must be in line with the previously outlined local shareholding criteria. Once this has happened, the DED will review all documentation and will provide you with a license – as long as all documents meet the necessary requirements – within a week.
Need help? We provide a Free Consultation on how to start your business in Dubai, just get in touch with us today.