Guide to Starting a Business in Dubai as a Foreigner
For a foreigner, having a business setup in Dubai is a lucrative and exciting opportunity that has attracted entrepreneurs from all over the world. Dubai is an emirate whose main characteristics are its strategic location and its 0% tax rate. Another important and attractive point for foreigners is its simple incorporation procedure. Currently, the government has introduced several measures to further encourage foreign investment. For example, allowing expats to own 100% of their businesses in most cases. In this article, we will provide you with a complete guide on how to start a business as a foreigner in 2023. The intention is to cover all relevant aspects. That is, from the basic concepts of company formation to company structures for expatriates. In addition, we will give you a step-by-step guide on how you can create a company in this wonderful emirate. Business Ownership Rules for Foreigners If you want to setup a business in Dubai mainland and other freezones as a foreigner, you should know about business ownership. In this way, foreign investors have full ownership of specific companies. In addition, the participation of foreign investors will no longer be limited to a maximum of 49% as before but may reach 100%. This is based on the provisions of Federal Decree Law Number 26 of 2020. Where this law nullifies the requirement that commercial companies must have a major Emirati shareholder or agent. In this way, full foreign ownership is provided to non-Emiratis of all nationalities. In addition, companies can become joint stock companies, after approval from all relevant authorities; They can even sell no more than 70% of the company through initial public offerings. All this instead of the previous limit of 30%. Benefits for Foreign Entrepreneurs Currently, the United Arab Emirates (UAE) has some prosperous cities. For instance, Abu Dhabi and Dubai. These cities have become the best centers for doing business, which attracts investors and entrepreneurs from all over the world. If you are a foreign entrepreneur who wants to expand your horizons to form a company in the country, you can obtain many advantages. Below, you will see a list of all the benefits you can access to start a business in Dubai as a foreigner. Access to a strategic location and global markets: The UAE has a strategic location at the crossroads of Asia, Africa, and Europe. As a result, the country becomes an ideal launching pad for international businesses. Additionally, it offers easy access to markets beyond the Middle East. Business-friendly environment: This country has taken the task of fostering a business-friendly environment using various incentives. For example, the creation of numerous free zones, which offer 100% foreign ownership and tax exemptions. Furthermore, the best free zones in Dubai cater to various sectors. Among them, are technology, finance, logistics, and manufacturing. Economic stability: The United Arab Emirates has a diversified and stable economy, thanks to prudent fiscal policies and strong governance. One of the most significant advantages for foreign investors is that the risks involved in starting a business setup in Dubai as a foreigner are reduced. Tax benefits: One of the main attractions for starting a business in Dubai as a foreigner is the favorable tax regime of the UAE. Currently, there are no corporate or income taxes in most of the country, businesses in free zones can enjoy tax exemptions. As a result, you can generate substantial savings and greater profitability. Types of Business Licenses for Foreigners To start a business in Dubai as a foreigner is to choose one of the ideal types of trade licenses. Before starting the process of forming a company, you have to know all these types to be able to make the right choice. In essence, business activities are mainly classified into four business licenses. Below, you will see a detailed explanation of each of these. Commercial license: Commercial licenses in Dubai are issued to companies involved in the sale and purchase of products. The advantage of this license is that it allows you to start a business in Dubai as a foreigner who is dedicated to carrying out commercial activities. In Dubai, there are different types of business licenses available, for companies that are in the process of formation. To choose the correct one it has to be according to the specific commercial activity. Professional license: People who have academic achievements, competent skills, and intellectual abilities can access this license in Dubai. For instance, professionals, artisans IT service providers, and more. All of these can apply for a professional license. Industrial License: An industrial license in Dubai is necessary for companies that are involved in manufacturing materials and products in industries. These companies must have a physical office before issuing an industrial license. Freelancer Permit: If you want to be self-employed, you have to apply for the most popular business license in Dubai. That is the self-employed permit. It is important to mention that free zones offer this type of permit for individuals. Tourism license: This license is issued to companies that are dedicated to providing travel and tourism services. As Dubai is one of the most attractive tourist places in the world, this license is one of the most common among entrepreneurs. Step-by-Step Startup Process for Foreigners Now if you want to start a business in Dubai as a foreigner, this is the moment when you will see all the steps you have to follow. This is a process that consists of five simple steps and below you will see a good description of each of them. First step (hire experts): Although the process of starting a business in Dubai as a foreigner is simple, it is good to have the support of experts. Especially for you who are a foreigner since you do not know how the legal regulations are handled in the country. To find this expert company, it is advisable to look for reviews and comments from previous clients. Second step (choose your commercial activities): This is the most important step
