Starting a business in the UAE may seem overwhelming at first. To achieve start-up success; thorough planning, making key financial decisions, and dealing with government hurdles are all part of the process.
The below guide addresses some of most common startup practical and legal steps you will encounter in the Emirates when setting up your business.
Step 1: Determine Your Economic Activity Type
An important first step is selecting the appropriate category/categories to define your type of business: commercial, industrial and/or professional. You also need to clearly define your business activity/activities that you intend to conduct as this determines the type of business license or licenses legally required and its issuing entity.
Below is an example of types of licenses based on economic activity types extracted from The Abu Dhabi Department of Economic Development:
|
Type of License |
Description |
Issuing Entity |
|
Commercial License |
Issued to owners of companies or establishments for practicing business activities. Example: (general trading, construction, real estate, transportation, clinics, hospitals, etc…). |
Department of Economic Development |
|
Agricultural License |
Issued to the owners of agricultural farms, animal production or sea products. |
Department of Economic Development |
|
Professional License |
Issued to artisans who personally practice a profession or craft for his own account, relying on his physical effort, or aided by some tools and equipment. Example: (carpentry, typing, steel works… etc.). |
Department of Economic Development |
|
Occupational License |
Issued to professionals who rely on their abilities, mental and intellectual capabilities, talents and scientific capacities. Example: (consulting offices, law firms, audit offices… etc. ). |
Department of Economic Development |
|
Industrial License |
Issued to owners of factories of all kinds and, manufacturing industries, which manufacture products for selling and profit making. |
Higher Corporation for Specialized Economic Zones (ZonesCorp) |
|
Tourism License |
Issued to owners of tourism activities. Example: (hotel, travel offices, tourist restaurants, boat rental, tourist camps, floating restaurants… etc.). |
Abu Dhabi Tourism and Heritage Authority |
*Some commercial licenses in free zones are issued by governmental bodies such as “Masdar Company” and “Media Zone Authority – Abu Dhabi”.
Step 2: Determine Your Legal Form of Business
When deciding on the appropriate legal form for your business, you need to consider the activity/activities of your business and the number of nationalities of the business owners. Different rules and regulations apply to each legal structure. Choose the form of ownership that best suits your needs:
-
National Proprietorship (100% National)
-
Commercial Company (51% Minimum National Share)
-
Foreign Company Branch
-
Commercial Agency Agreement
-
Gulf Establishment or Company
Step 3: Determine Your Business Trade Name
Once you’ve selected the activity/activities and legal form for your business, you must select a trade name that distinguishes your business from others. According to the Abu Dhabi Department of Economic Development, trade names must adhere to the following terms and conditions:
-
The trade name should not be a previously registered name, or currently used for the same activity or for a similar type of activity.
-
The trade name should be compatible with the type of activity and the legal form of the establishment.
-
The trade name should not contain the names of Allah, sectarian names, names of governing authorities, slogans of local, Arab or international entities, organizations and institutions.
-
The trade name should not be identical or similar to any local or international trademark registered at the Ministry of Economy.
-
The trade name should not contradict public order, or public moral.
-
The trade name should not mislead the consumer, with regard to the type of trade, its importance, size, etc…
-
The trade name will be cancelled automatically at the end of reservation period, in case the license is not issued.
-
Department reserves the right to cancel or change the trade name in the event of similarity with existing trade names, or non-conformity with the prevailing terms and conditions.
Step 4: Trade Name Registration
Listed below are the commonly required documents you will need to provide along with your registration form and payment of fees:
-
Copies of valid UAE ID Card of owners/partners
-
Copies of valid passports of owners/partners
-
Copies of the Family Book of UAE citizens
-
Copies of valid residence permits for non-citizens and GCC nationals
Step 5: Obtain Chamber Membership
A prerequisite to apply for a business license is obtaining membership from The Chamber of Commerce and Industry. All nationals and foreigners, engaged in any commercial, industrial or professional activity, whether they are individuals, companies or branches, must show proof of fee payment when collecting the trade name certificate and submitting the application for the business license.
Step 6: Obtain Initial Approval for Your Business
Once you have received your trade name certificate, you can begin the procedures for your initial approval certificate. This document enables you to begin the paperwork necessary for your business license as well as approaching authorities relevant to your business activity for additional approvals if necessary. Non-nationals must obtain approval from the General Directorate of Residency and Foreigners Affairs.
Step 7: Ready Your Place of Business
After you obtain the initial approval, you can lease premises suitable for your business. Approval for the business site is required from the Department of Economic Development as well as other relevant authorities depending on your type of activity.
Step 8: Prepare for Final Approval and Application
Preparing all required documents and ensuring all legal requirements are met is the last step prior to submitting the final application for the business license and occurs after the initial approval is received. When the initial approval is issued, it is valid for a period of three months. The final application must be submitted during the time that the initial approval is still valid. Based on type of business, some activities only require approval from the Department of Economic Development. Be sure to verify which relevant authority applies to your business type.
Step 9: Obtain Your License
After receiving all final approvals from relevant authorities and fulfilling all legal requirements, the final step is to pay the associated fees and retrieve your business license. This can be done through the Department of Economic Development or through various licensing authorities.
Policies and procedures can vary from Emirate to Emirate and the above is meant as a general guide based on the laws implemented in Abu Dhabi. UAE-based legal or consultancy firms are also widely available and can help prepare and guide you through the above mentioned steps.
Further information is available on the United Arab Emirates Ministry of Economy website and through each Emirate’s Department of Economic Development:
Abu Dhabi Department Economic Development
Ajman Department Economic Development
Dubai Department Economic Development
Fujairah Department Economic Development
Ras Al Khaimah Department Economic Development
Sharjah Department Economic Development
Umm Al Quwain Department Economic Development
Other references:
Abu Dhabi Department of Economic Development. (2013) Issuance of Business Licenses. http://www.ded.abudhabi.ae
Abu Dhabi Government. (2013) Starting a Business in Abu Dhabi. https://www.abudhabi.ae
Dubai Department of Economic Development. (2013) Practicing Business in Dubai. https://dubaided.gov.ae
UAE Investment Map. (2013) Invest in the UAE. http://www.uaeim.ae
United Arab Emirates Ministry of Economy. (2013) http://www.economy.gov.ae
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