5 Things to Consider While Setting Up Business in Dubai

Original Article: https://www.kwsme.com/5-things-to-consider-while-setting-up-business-in-dubai/

With its progressive business landscape backed by government incentives and an ease of setting up a new enterprise, the city of Dubai has become an ideal investment destination for entrepreneurs around the world. In Dubai, you will find many talented people with creative and business mindset that are benefiting from this tax-free heaven, its safe and sound working environment as well as rich social and cultural lifestyle.

Company formation in Dubai is not a difficult process as the government offers most liberal and attractive operating conditions. However, there are few elements which must be taken into consideration beforehand in order to avoid any obstacles. The important points to consider while setting up your business in Dubai are

Form of Business:

The first stage is to decide what type of business you are going to step in. It will also determine the form of license that you will require from government organizations. It should be kept in mind that for certain businesses such as the trade of food or jewelry or legal consultancy requires more approvals from certain authorities. The Department of Economic Development (DED) has provided with 2100 activities from which you can select any area to go for. In case you do not find your activity, you can contact DED for further assistance.

Ownership

If you are a foreign investor, you will have mainly two options for ownership. If you want complete ownership of your business, you will have to choose a free zone in Dubai for your business operations. Free zones are the special economic zone which provides 100% ownership to a foreign investor as well as 100% retention of capital and profits. However, your operations will be restricted to that specific free zone and outside of UAE. In order to enter the local market, you will have to find a local distributor for that purpose. Secondly, if you want to operate locally, you will go for Mainland Company but that will restrict your ownership to the maximum of 49% as you will have to find a local sponsor who will have 51% of ownership. DED will issue a license for your Mainland setup.

Legal Structure of Business

There are various legal forms for businesses such as sole proprietorship, one-person company, civil company, Partnership Company, branch of a foreign or UAE company, Limited Liability Company and many others. Each structure has its own rules and regulations specified by Department of Economic Development (DED). It depends upon your nature of the business which will decide its legal structure.