Wednesday, 15 August 2012

How to set up a Business in Dubai

(Part 1)

In current years, investors from all over the world have shown great interest for investment in the booming economy of Dubai. Investors see expanding opportunities for profit making in the different sectors of economy. This drive for investment in Dubai is encouraged by the good investment climate and the enabling business environment. The laws and regulations of setting up a business in Dubai have been streamlined and simplified over time and are becoming increasing business friendly.

When an investor thinks of starting a business in Dubai the first thing that comes to his/her mind is where to begin the process of setting up the business and what are the requirements that he/she needs to satisfy before they can start doing business.

As the process of establishing business in Dubai goes mostly through Dubai Department of Economic Development (DED), the largest part of this guide depends on what mentioned in the DED website Moreover, this guide gives an overview about the requirements by the other government departments.

Dubai Chamber publishes this guide to answer such types of questions and many others that are relevant for those who are thinking of setting up a business in Dubai.

  Guidelines of Setting up Business in Dubai

1.1 Overview on Requirements for Practicing Business Activities

Practicing any business activity, whether commercial or professional, should be through a body corporate, which requires choosing one of the legal forms for the firm that shall practice such activity.

Therefore, choosing the right legal form of the firm is subject to many considerations to be studied carefully so that the firm may conduct its business in the right and safe way. Among the considerations, which should be observed in choosing the legal form of the firm are the following:

1. Compliance with the laws and legislation regulating the civil and commercial transactions. In the UAE there are certain types of commercial companies are not allowed to practice certain types of activities. For instance, limited liability companies are not allowed to practice the activity of insurance and money exchange. In addition, there are certain activities, which are not allowed to be practiced except by certain legal forms; for example, firms specialized in legal consultancy and accounting services cannot practice their activities except through professional companies.

2.  The size of the invested capital to be employed for practicing the activity, which depends on either the personal ability of the investor in providing the required capital, or his ability to raise funds from different financing sources in a lawful manner. Thus, projects, which need investment of huge funds for their implementation, may require establishment of a public shareholding company in order to ensure securing the required capital.

3.  Scope of the firms activities, and whether it is planning to practice its activities on the local, regional, or international level

   4.  Nationality of the investor. Local investor may practice most types of business activities through a sole proprietorship or any other form of companies by entering into partnership with others. However, if the investor is not a local, then he/she needs, in most cases, to have a local partner in order to be able to practice certain business activities, except for the special cases where the law does not dictate such requirement.

In addition to other considerations the investor has the absolute discretion in choosing the legal form for practicing his business, except for the few cases, which the law determined to be practiced through a certain legal form of establishments.

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