SETTING UP A BUSINESS IN UAE

Dubai is leading the way in tech, finance and innovation, continuously

evolving this future-forward hub for businesses. There are many ways to start or
expand your business in Dubai
 Team up with a local partner:
To make sure you are making all the right moves from the very
beginning, it is advisable to select and stick to a local partner.
 Choose your zone:
I. Free Zone- There are over 20 free zones in Dubai today. Free
zone companies are regulated by the chosen free zone authority,
benefit from tax exemptions, and can trade both internationally
and within dedicated free zones.
Free zones make the process of setting up a company as smooth as
possible, but make sure you have everything you'll need to
complete the process – including all relevant paperwork, business
plans, and anything else the free zone will need.
Every free zone is different, so check your chosen zone's specific
requirements and timelines before starting.

Typical steps include:

1. Registering the company, for which the owner needs to provide a
copy of their passport, plus the original company documents if
setting up a branch office in Dubai.
2. Leasing business premises.
3. Obtaining a business licence, which takes, on average, 3-5
working days.
4. Setting up additional business services, such as setting up a bank
account and arranging visas for foreign employees.
II. Offshore- Suitable for businesses outside Dubai, but limits on
activities within Dubai.

III. Establish a Franchise or a Mainland company- A Dubai

mainland company structure is beneficial to businesses seeking
public-private partnerships in the form of taking on government
contracts need local sponsorship. Companies can also trade
internationally in addition to the the UAE market , The best part is
that you can retain 100% foreign ownership of most types of
mainland companies, across most activities. However, do bear in
mind that some companies may require an Emirati partner.
.
Assess your requirements and make a decision before you do anything
else.
 Find a Reliable Sponsor:
Essential for mainland companies to handle official formalities and save
on procedural hassles.
 Pick your license type:
Choose out depending upon the kind of business you are into.
Commercial License: For trading businesses.
Industrial License: For manufacturing and industrial activities.
Professional License: For service providers, professionals, and craftsmen.
The Dubai Department of Economic Development (DED) is responsible
for issuing licenses and you can choose as per your business activity.
 Select the category:
After selecting the license, define your business further by choosing a
specific category your business belongs to.
 Choose a trade name:
Choose the right name for your business and register it.
 Submit a minimum investment:
Almost all businesses require some amount of initial funding to start
with.
 Secure initial approvals and agreements:
Once you reach this stage, you will have to apply for initial approval to
ensure that the authorities are ok with you starting the business and that
it does not interfere with general laws and regulations of the Emirate.
This process is usually done online but you can also opt for in-person
submission of the documents, which will include your business
registration and licensing form, a copy of your passport or government-
issued photo ID, a copy of residence permit/ visa, and any documents
related to the feasibility of your business project. This is also the stage
where you sign the required agreements and gear up for opening an
office.
 Select your premises/address:
In Dubai, it is compulsory for all businesses to have a physical address.
Once you know where you are based, you are closer to opening your
dream office.
 Submit your documents:
After preparing all your documents laced with location, license type,
zone type, and legal information, submit your documents for final
 approval. Go ready with initial approval receipt, all the earlier submitted
documents, any documents you have from the Real Estate Regulatory
Agency (RERA) or Dubai Land Department (DLD), service agent
contract, and approval from related government entities to kick-start the
final process.
 Get a license:
Right after final approvals, you will be required to pay for the license
through approved payment channels.
Start-up incubators and accelerators
Dubai offers a great support network for young start-ups, with an active
investor ecosystem of venture capital funds, business incubators and
accelerators.

 Incubators: programmes designed to help start-ups develop and

grow by providing workspaces, mentorship, education/training, and
access to investors.
 Accelerators: programmes that support developing start-ups to
become self-sufficient and speed their growth, by providing
logistical and technical resources, shared office space and a
network of experienced peers
 Companies must comply with Anti-money Laundering regulations
and disclose beneficial owners.
 There are different taxes that may apply to your business in
mainland, including Corporate Tax, Value Added Tax (VAT),
Excise Tax, and social security contributions.
 Companies must keep proper financial records and have their
accounts audited annually.
 The UAE has strong protections for intellectual property rights.
 There are several court and arbitration systems available for
businesses in Dubai.
Source: ( https://www.visitdubai.com/en/invest-in-dubai/business-setup )

OVERSEAS DIRECT INVESTMENT AND ITS DOCUMENTATION

PROCESS
Step-wise process of executing an ODI transaction
 Submit the documents at Authorized Dealer (AD) Bank
AD Bank scrutinizes the documents to ensure the financial
commitment falls under automatic route
Unique Identification Number (UIN) will be generated at the time
of the first transaction in the foreign entity. Outward Remittance
will be processed.
For subsequent transactions, reporting will be done against the
same UIN

Fulfil obligations of Indian entity/ individual such as submission of

share certificate and Annual Performance Report (APR)

General Restrictions:
Prohibited Activities for ODI:
No person resident in India can make Overseas Direct Investment (ODI) in a
foreign entity engaged in:
Real estate activities (excluding the development of townships, construction of
residential or commercial premises, roads, or bridges for selling or leasing).
Gambling in any form.
Dealing with financial products linked to the Indian rupee without specific
approval from the Reserve Bank of India (RBI).
Definition of Real Estate Activity:

Buying and selling of real estate or trading in Transferable Development Rights.

Excludes development activities like townships, construction of premises,
roads, or bridges for selling or leasing.

RBI Directions:
Authorized Dealer (AD) banks are prohibited from facilitating transactions with
foreign entities engaged in activities mentioned in Rule 19(1) or located in
countries/jurisdictions advised by the Central Government under Rule 9(2).
Financial products linked to the Indian Rupee include non-deliverable trades
involving foreign currency-INR exchange rates and stock indices linked to the
Indian market.
Specific Provisions for Start-up Investments:
Internal Accruals for Start-ups:

ODI in start-ups recognized under the laws of the host country/jurisdiction must
be made from internal accruals of the Indian entity or its group/associate
companies in India.
Resident individuals must use their own funds for such investments.
Procedure and Conditions for ODI in Start-ups:
Investments in start-ups must not be made from borrowed funds.
AD banks must obtain a certificate from the statutory auditors/chartered
accountant of the Indian entity/investor before facilitating the transaction.

Tax Exemption for New Businesses in Dubai

Dubai offers several tax advantages for new businesses:
Zero Corporate Tax:
Most businesses enjoy zero corporate tax on profits.
No Personal Income Tax:
There is no personal income tax in Dubai.
VAT:
VAT is applicable at a flat rate of 5%, but many free zones offer exemptions.

Free Zone Benefits:

Companies in free zones can benefit from 100% repatriation of profits and
capital, 100% ownership, and exemptions from import and export duties.