United Arab Emirates (UAE) has become one of the top choices of entrepreneurs in the past few years. Being the fastest-growing region globally, it is preferred widely by individuals for various sectors such as tourism, education, technology, entertainment, business and jobs. Apart from all of them, the government of UAE is encouraging individuals around the world to open their startups.
Even after the countless possibilities, many are still unaware of the ways to start their business in Dubai. Those who aspire to have a business startup in the UAE must look at the steps below. Here we will help you get an overview of the tasks required for a startup in the UAE. Let's have a look at them:
Step 1: Research Properly
Before starting a business in UAE, you need to be aware of their rules, regulations, customs, audience, trends, market, etc. Many companies are opening up every day in Dubai and face closure due to a lack of complete knowledge and research. To fulfill the changing demands of your audience and pass through the administrative policies, you need to do extensive research before starting your business. Moreover, research the product selection and business area well before choosing to avoid losses.
Step 2: Identify the Business Activity
UAE offers exceptional opportunities for entrepreneurs. The choices are endless, and so makes the profits. After completing extensive research on the audience, market, and rules of the UAE, it is essential to choose the business activity. The various business activities may include imports or exports, e-commerce, consultancy, IT, etc. Select an activity and perform a SWOT analysis to make a practical choice.
Step 3: Find a Local Sponsor
To start a business anywhere in UAE, you require a local sponsor to form an LLC. As per the UAE government's guidelines, it is essential to have a local sponsor owning the majority of your shares and practicing managerial decisions to operate a business in the region. Also, you need to negotiate the amount your sponsor will get yearly as a fee. It is indeed required to develop a strong bond with your sponsor so that he can easily handle all the hurdles coming down in setting up your business by dealing with the authorities.
Step 4: Choose Free Zone for 100% ownership.
As we have said before, UAE offers endless opportunities to businesses. They provide Free Zones to the various parts of the region to give companies a chance to own 100% of their business. Under the Free Zones, they don't need any local sponsor and can manage everything independently.
However, their free zones are located at city extensions, making it impossible for a business, like confectionery or retail businesses to be easily accessible to the local audience. Moreover, it makes it a bit more expensive to start and operate a business in free zones.
The three significant advantages of choosing Free Zone areas in the UAE for your startup include:
- 100% Ownership
- Duty-free customs area.
- Smooth and Quick Startup process.
Step 5: Register Your Trade Name
Your Trade name distinguishes your business from others. You need to register your trade name first to get your business license. Your trade name must reflect your business activity and the nature of the startup. The applicant can easily apply in any Emirate with the Economic administration using their website or application.
When you apply for the trade name registration, they will issue a payment voucher or transaction ID that you need to use at the final registration process. Your trade name must include an acronym such as LLC, EST, PJSC, PrJSC, and abiding all the necessary conditions by the authority.
Step 6: Prepare a Memorandum of Association (MOA)
Preparing a Memorandum of Association (MOA) is one of the most critical steps in starting a business in the UAE. If you are starting a business anywhere in the UAE but free zones, you need first to prepare a MOA. It is a document containing all the relevant information associated with the external activities of the business with the various shareholders, vendors, service providers.
The MOA contains every business detail, including the physical address, name, and activities. It is compulsory to prepare and sign a MOA before starting a business in UAE. However, in case of starting your business in the free zones, you need to sign a local-service agency agreement.
Step 7: Select a Location that fits your needs perfectly.
Your business location matters the most when starting your business. Growing your business in a region becomes difficult when your clients or customers can't reach you. Suppose you have a consultancy business in UAE. Do you think your clients will like visiting your office when located in the extension areas? Your business will get closed down soon.
That is why you chose a location that ideally fits your needs and offers convenience to your clients or customers. Also, if you choose a place in one of the free zones, do good research about the costs before finalizing the location.
Step 8: Get your Initial Approval
The initial approval stage is mandatory to set up a business in the UAE. It is a kind of preliminary stage where you have to take the government's approval whether they agree to set up your business in the region or not. Under this, you need to get permission from the Department of Economic Development (DED) to reach the final stage of the registration process. Without this approval, you cannot enter the next step of the Startup Process.
Step 9: Get your Business License
Our guide on starting a business in UAE is incomplete unless we inform you about various business licenses and how to get them. The different types of permits include a commercial license, agricultural license, professional license, industrial license, occupational license, etc. To get your business registered, you need to get a license, and you can also get help from local registration agents for a smooth and hassle-free process.
To get your license for an LLC, you must complete all the legal documentation along with a local sponsor owning 51% of your stakes. However, to hold a company in one of the free zones of the UAE, you need to work as a services agent. Submit all your documents, your registration fee and get your firm registered in the country.
How will Startup Solutions help reduce the hassle?
Setting up your business in a new country requires a lot of research and complex tasks. It is not easy to start your business when you don't have the right resources and contacts. That is why most companies now choose Startup solution companies to establish their business abroad. They have proper resources and connections to help ease the startup process abroad. If you want to make a startup in UAE, you can choose from the various startup solutions companies like Technophilic for a smooth and efficient procedure.
They help you quickly tackle the overall hurdles and restrictions during the journey and reduce the costs. When you get a clear path with all the documentation, you save a lot of money which can be wasted on unnecessary things. They help you get the most cost-effective solutions to start your business in UAE. This blog contains all the steps required to be fulfilled for your startup registration in the UAE. Hope you can now get an easy way to establish your business in the country.