Setting up a company in Dubai is quite complicated if you are not informed of the process and regulations involved. It is sensible to seek expert support in setting up your company in Dubai. The main regulatory body is Dubai Department of Economic Development (DED) which is also a license issuing government department of Dubai Mainland Company . Still , the companies of certain nature need further authorization from applicable Ministry or Government Department. Following are the eight stages to setup your company in Dubai if you decided to choose “Dubai Mainland” jurisdiction to setup up your company.
Should you need support at any period of obtaining a DED company license, please do not hesitate to contact me.
Stage 1: Choosing your Commercial Activities
Choosing a commercial activity is the most critical part of corporate arrangement in Dubai. Dubai Department of Economic Development has categorized commercial activities into numerous groups and sub classes. There are over 2,000 commercial activities presented in Dubai, which fall into diverse classes and groups.
Corporate activity shapes the form of company license i.e. professional or commercial. The method of commercial license develops the legal configuration of business i.e. Limited Liability Company or Sole Establishment. Thus, it is furthermost critical to pursue expert assistance on picking commercial activity of your corporate.
Please understand that some of the commercial activities need approvals from government departments other that the DED. Call us to know more about these activities.
Stage 2: Choosing a Legal Form for your company
After choosing company activity you can pair this with “legal form”. A ‘legal form’ is a portrayal of what type of company you are setting up.
When you pick a legal form for your company, you must consider the company type, company activities, the total and the citizenship of investors and the ownership preferences.
Businesses in Dubai can take several legal forms. Altering on your particular company activity not all of these legal selections may be open to you. Please ask your specialist about company activities and their legal forms in United Arab Emirates (UAE).
Stage 3: Choosing a Trade Name of your Company
Trade Name refers to the company name or your official company name. This name will be reflected on your trade license and other official documents. This is also your brand for marketing purposes. It is a basic need to obtain your final license.
Ample Guideline of Choosing Trade Name
When choosing a name for your company or business you should obey ample trade name guidelines. Your trade name should not hold the following components:
The name must not be obscene, indecent, or discriminatory, or offending to the general public
The name should not reference “Allah” or God’s name.
Family Names cannot be used as a name still, first and last name can be considered.
The name cannot be a country or government.
The company activity should be indicated in the trade name. You cannot have ABC as a name but it should be ABC Auto Tyres Trading LLC
There cannot be punctuation symbols
The name cannot use existing trademark, trade name or brands in Dubai
Keep away from placing international, middle east or global at the start of the name.
A fee of AED 1000 must be paid for trade name contains foreign texts that cannot be interpreted into Arabic, for instance, “AltaVista”
A fee of AED 1000 must be paid for trade names contains regional references, for instance “East”, “West”, “International”, “American”, “European”
A fee of AED 1000 must be paid if a part of the trade name is a trademark.
A Fee of AED 2000 must be paid for trade name contains numerical figures, for instance “Africa 2000 Trading”. Written numbers in letters is excluded, for instance “Africa One Trading”
Fee of AED 2000 for Trade name contains foreign words.
Fee of AED 2000 for Trade name contains the word “Gulf”.
Fee of AED 2000 for Trade name contains an abbreviation, for instance B.C. Trading.
The best procedure is to reserve your company’s trade name through an approved document clearing agency or a law firm.
A Trade name Permit expires after sixty days.
It can be renewed online one time only.
It must be renewed within one week prior to expiry date.
A Trade name Permit that has already expired cannot be renewed
Stage 4: Apply for Preliminary Approval.
This implies to the approval of the company activity or activities for your company. An Preliminary Approval Permit is a paper which says that the Dubai Government has no objection to you opening a company and means you can take the next process for obtaining a company license.
There are several ways to apply for your Preliminary Approval Certificate, Altering on the legal form of your company . The best practice to apply through a document clearing agency or a law office. You need to bring the requested documents.
Documents needed for preliminary approval are:
Company license registration Form (BR1), typed up in Arabic or English
Passport copies of all owner(s)
Passport visa page copy of the foreign partner(s)
UID Number of the foreign partner(s). In case they are on visit visa
No Objective Certificate (NOC) from foreign partners’ sponsors
Khulsat al Qaid for native partners, if they do not have any existing trade licenses
Emirates ID of the native partners.
If you are expert company. You may need to submit an attested degree certificate of your expert qualification. The DED will pair your qualification type with the license activity.
If you are a Private Shareholding Company, you also need a No Objective Certificate (NOC) from the Ministry of Economy, your company bylaws or statutes and a feasibility study. Your application will be studied by an internal committee from DED prior to issuing you with an Initial Authorization Certificate.
If you are a Public Shareholding Company, you need an NOC from the Securities and Commodities Government department Representative offices as well as branching of foreign companies performing commercial activities must first register with the Ministry of Economy.
The best way to apply for initial authorization is through authorized document clearing agent or the law firms. You can apply for any of the obeying legal forms.
Individual Establishment (Sole Proprietorship)
Limited Liability Company
During the application process, DED issues a payment voucher or a transaction number, which you can pat through an authorized document clearing office.
You have pay for your Initial Authorization within seven days of applying for it
You mmet have an Initial Authorization Certificate and Initial Authorization Form to obtain a license
The Initial Authorization Certificate records partners, legal type and activities of the license
It is valid for six months and is not renewable
Stage 5: Drafting and Notarization of Memorandum of Association or Local Service Agent Agreement
Memorandum of Association and Articles of Association
After obtaining Initial Authorization and Trade Name authorization you can now proceed drafting the bylaws of the company. This is essential part of the company incorporation considering that this will define the relationship of the shareholders or the agreement between you and the local partner/service agent. Therefore, it is sensible to get it drafted by the lawyer or the Notary public.
It depends on the legal form of your company that you may need Memorandum of Association (MOA) or Local Service Agent (LSA) agreement with a UAE national, who will represent your company with regards to licensing and compliance.
If your company activity is commercial or industrial, you will have to draft the Memorandum of Association (MOA). MOA refers to the constitution of the company.
The MOA or LSA needs legal translation intro Arabic by the Ministry of Justice approved legal translator before presenting to Notary Public for notarization. The best way to process this stage is to get it drafted by the legal translators sitting at Notary public and present the same. Translators sitting at notary public have good knowledge of the ample clauses and fixed and changeable components of MOA/LSA.
Here are some important components of the MOA:
The partners of the company – this clause will refer to the name the partners of the company; this will be the shareholder(s) and the UAE National.
Name of the company – this clause will refer to the name of the company which you got approved in the third stage.
Object of the company – this clause will refer to the company activities of the company which you got approved in fourth stage.
The Capital of the company – this clause will refer the minimum share capital of the company which is AED 300,000. This can be divided into 300 shares and the value of each share is 1,000 AED. As an expat you can have 147 shares and your Emirati partner will have 153 shares.
Transfer of Shares – The 51% of the shares can only be transferred to a UAE National. 49% of the expat’s shares’ can be transferred to another expat. This needs authorization from competent authorities and subject to authorization.
Management of the Company – this clause will refer to the appointment of Managing Director. You can appoint yourself as one, as this is the best practice and first stage to secure your interest in the company.
Financial Management of the Company – this clause will refer to prepare the balance sheet and annual financial reports of the company.
Ample Assembly – this clause will refer to the board resolutions. You may resolve to open new endeavors and acquire other companies.
Profits and Losses of the Company – this clause will refer to the profit and loss division of the company in accordance with your agreement with local Emirati partner. By law, the Emirati can take 20% profit and losses and the expat can take 80% of the profit and losses.
Dissolution of the Company – this clause will refer to the terms and conditions for the dissolution of the company.
Please seek expert advise and support for notarization of MOA or LSA.
Stage 6: Finalize your office location and obtain office lease agreement
Choosing a Location:
All companies in Dubai must have a physical address within the permissible commercial area of Dubai. The minimum size of 50 sqm is needed to register a company. The number of visas that a company can apply for depends on the amount of office space that the company has leased and the activity of the company.
Here are some CONSIDERABLE POINTS for choosing an office location;
The office should be within the Emirate of Dubai. There are towers in free zones that are authorized by Dubai DED for licensing. In such cases you need to ask the Land Lord or the real estate agent which licensing government department the building falls under.
Company location must be declared as commercial spaces by the Dubai Land Department. Most of the villas are residential still ; if you pick to have your office or company location in villa the same needs to be converted into commercial property. You may ask the owner for proof of the transaction to be certain.
You can also choose to locate your company in an authorized company center, in which case you do not need location-related authorizations from Dubai Municipality.
If you or one of your company partners is a UAE national and has a license in a certain location already, you can add your new company to the same site as long as the space is bigger than 500 sq. ft. For registering multiple company licenses to a single location, you will need to submit an authorization from existing partners to DED
You will need to prepare a letter on your company letter head, stating that the company has no objection to introducing a new license on its location. The letter has to be signed by all the existing and new partners.
An interior fit out company is need to design and plan the interior of the office or shop as per Dubai Municipality standards. These standards are laid down by Dubai Municipality as per company activity.
You cannot move from one office to the other without notifying Dubai Department of Economic Development DED and making amendments in your license application.
Planning Section Authorization
Before you finalize the location of your company, the Dubai Municipality Planning Section has to confirm the property’s availability and suitability and compliance to public health and safety regulation.
Obeying process are involved to obtain authorizations for your company location;
Once you have identified a location for your company , you will need to visit Dubai Municipality Planning Section to provide the picked plot number, size, the landlord’s name and your company activity. They will confirm the location’s suitability for your company .
Then you can sign your tenancy contract with the landlord and open an account with the Dubai Electricity and Water Government department (DEWA).
The next stage is to register your tenancy contract with Ejari for attestation. Ejari is a Dubai Government initiative to regulate the relationships between landlords and tenants in Dubai. To register with Ejari, take your tenancy contract and DEWA account number to any authorized service center.
You then need to take your Ejari registered tenancy contract, your Initial Authorization Form and your Initial Authorization Certificate back to the Dubai Municipality Planning Section, which will approve your company location and, if everything is in order, stamp the Initial Authorization Form.
Documents needed to obtain Ejari Certificate:
Dubai Electricity and Water Government department (DEWA) account number
Passport copy of the Land Lord
Passport copy of the share holders
Stage 7: External Department Authorization
Some company activities need special licensing authorizations by different government departments. For instance , if you want to set up a hospital, it is not enough to get licensing authorizations from DED only but also from the Dubai Health Government department.
Take advice from your specialist if your company activity needs further authorization by several government bodies. If yes, you need to contact the applicable government departments to find out what documents they need before starting the company incorporation process.
Company activities that fall under DED control do not need any further activity-certain licensing authorizations.
Stage 8: Final Authorization From DED
This is a stage to get final authorization of license from Department of Economic Development. Obeying documents needs to be submit to obtain final authorization.
Trade Name Certificate
Initial Authorization Certificate
Initial Authorization Form with stamps
Ejari registered Tenancy Contract
Authorizations and NOC’s on your picked company activity from other government departments, if applicable
One set of MOA or LSA (in case of commercial LLC license)
Local Service Agent agreement – LSA (in case of expert license)
Altering on your company activity, the processing of your company license ranges from 1 – 7 days.
When you submit your documents, you will be issued with a payment voucher or a transaction number, which you can use online to check the status of your Company License. When your company license is ready, you can contact authorized document clearing agent or pay at Banks, Emirates Post and law firms who will collect the payment and issue your license.
Need further assistant? Please Contact us!