Setting up Business

Under UAE law, foreign entities interested in establishing a formal presence in the UAE have five options: create a permanent establishment, of which there are seven different types; establish a branch office; create an entity in a UAE free zone; create a civil company (only in Sharjah and Dubai); or enter into a commercial agency agreement.

The UAE Commercial Companies Law (CCL) requires that each company established in the UAE has one or more UAE national partners who hold at least 51 per cent of the company's capital. Companies that undertake certain activities (oil industry, production of electricity and gas, treatment and distribution of water) are exempt from the 51 per cent requirement. Companies established in free zones are also exempt from the 51 per cent requirement, if the relevant free zone has special provisions regulating the company. Foreign banks are exempt from having to appoint a sponsor

Keep in mind that the only way for a business startup in UAE to start without taking a UAE national acting as your partner is to locate your business in one of the Free Zones. This is not practical for businesses that must be in city markets like restaurants and retail stores. Also businesses that work with the government have to be registered with a local sponsor.

Not to mention the fact that purchase or rental in a Free Trade Zone district might be high for your budget to handle.

For a business startup, Free Zones offer three great advantages

100% ownership
Speedy start up
Duty Free customs boundary.

You need to set up your business in an area that is most profitable for your business or most convenient to your business. A location in the city can be selected for a shop or an office most known for the type of product or service you are dealing with.

If you are planning a Free Zone company then you must be make the selection based upon the criteria of distance, costs and if it is suitable for your product, business model, and trade requirements.

A tenancy contract must be concluded. If you’re aiming to start a small-scale enterprise, then the basic amenities, like telecommunication, storage, and space inside the establishment is the basic concern that must also be satisfied. Other services available in the commercial property can vary greatly.

Business Setup

Setting up Business