Guides

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Dubai business information is constantly evolving as the city develops its processes and procedures.  Expo 2020 has encouraged even more people to consider setting up their own Dubai business. If you’re in Dubai or in another part of the world, business information on setting up a company or business in Dubai is difficult to track down.   When you’ve found something which looks as though it might be the ‘real deal’ it  can often be difficult to make sense of it! There are different legal formats for businesses depending on the activity. We’ll go through these in other guides.

Dubai Mainland

Let’s start with the Dubai Economic Department in what’s known as ‘Dubai Mainland’.  You will have heard of the Free Zones but we’ll tackle those in another article. The Dubai Mainland is regarded as all areas in Dubai which are not registered Free Zones.

Where is the DED?

The Dubai Economic Department or DED  or simply the Economic Department’s main office is based close to the Dubai Creek, just over the Maktoum Bridge.  This is the DED new headquarters. Previously housed on Baniyas Road on the opposite side of the road from the Creek Sheraton Hotel. Parking outside the DED can be difficult and  if you have a timed appointment make sure to arrive a bit earlier to give yourself time to park.  Firstly, make sure you go to the correct office – yes, the one just over the Maktoum Bridge.  If you’re coming from the direction of the Trade Centre roundabout, don’t take the underpass but stay over on the right hand side of the Maktoum Bridge road and follow the exit signs to the DED – not the first exit, but the second.

Here are some interesting facts about registering a company through the DED.

Commercial Space

If you open a business  through the DED you must find suitable commercial premises for your business. On certain licenses there are restrictions on the type of commercial space you are required to occupy so always check with the DED first.  You can work from home but you still need an officially registered commercial address.  A residential address will not cut it.  It cannot be a shared office. It must be a minimum of 500 sq ft. If you intend to employ anyone you will need to provide specific information to the Ministry of Labour including providing them with a copy of the DEWA bill, a location map and photographs of the premises along with other paperwork.

There are different legal entities and to make life easy for everyone we’ll cover these in separate articles.

Investor Visa

If you are one of the Partners mentioned on the license documentation you can get what’s known as an ‘investor visa’ which allows you the freedom of movement into and out of the country – with one stipulation – that you must not reside outside the country for more than 6 months.  Make sure you stick by this regulation as it is very very difficult to organise your visa outwith the 6 month period.  This type of visa commands a bank guarantee deposit of AED 10,000 for an LLC company and AED 20,000 for a Professional License.  There are other associated charges for the work, e.g. medical costs. This amount is returned to you when the visa is cancelled (remember you must cancel a visa not simply allow it to expire).  This does not include any service fees/charges only the visa fee itself.  You need to take into account the typing costs as well as the medical costs.

Ask the right Questions

If you ask one of the employees at the DED you will find helpful advice but be sure to ask the right questions.  Nearly everyone speaks English.  Double check all the answers as bad advice is as bad as no advice.  Cross reference answers you’ve received against all the information you have.  Or, you can employ a firm of solicitors to do the work for you but even then, keep checking.  Some of the local firms have excellent people on board to assist at a cost (of course!)  There are also some companies who set up businesses on your behalf but again the quality of information received and service provided aren’t always up to  the standards some of us are used to.  You do not want to find you have a license which is not effective for your business so it is imperative to make sure the advice you are receiving is excellent.

Sponsor and Local Service Agents – what’s the difference?

Now, we hear from expats that their greatest fear is THE SPONSOR.  Firstly, it is only the LLC registered companies who require to have a Sponsor who holds 51% of the company shares.  Documentation can be issued and signed by all Partners to alleviate some of the tension felt by expats when involved in these circumstances.  Sponsors can be a national of any GCC country and must be credit worthy.  A file is opened in their name in the DED which any company they sponsor is registered against.  Our Dubai Sherpas are writing a guide about finding a sponsor and the cost involved so check back soon.

You can change your Sponsor if your current Sponsor and your new Sponsor are in agreement.  You need to attend Dubai Courts with all Parties being present and the correct documentation in place for signature.  Obviously, there are costs attached.

If you are considering licensing in the Dubai Economic Department and providing a service you will need a Professional License – this gives you to have 100% ownership.  You are required to have a Local Service Agent but they have no involvement in the business other than to assist with government documentation.  Remember that you are fully responsible for the business and any mishaps so get business insurance which you will, hopefully, never need but we can’t see into the future!

The other license types will be discussed in future articles – keep checking back.

Further details about sponsorship and local service agents will be found in an article to be published soon. We hope to have a detailed guide on this subject shortly.  Keep checking back.

Dubai Chamber of Commerce & Industry (DCCI)

The Dubai Chamber of Commerce & Industry is an integral part of setting up your company in Dubai. As an LLC registered company the cost of membership is automatically included in your ‘Payment Voucher’ whereas other licenses need to apply for membership separately.  We’ll add a guide about this shortly.

Choice of Language

Any documents which are required by Dubai Courts must be in Arabic or Arabic and English, e.g. Memorandum of Association, Power of Attorney etc.  If official documents are coming from another country to be used in any Dubai government office then these must be stamped and attested in both the country of origin and in Dubai.

Your exit strategy is as important as your strategy to set up your company in Dubai and there are costs involved in closing an LLC or any other registered entity.

There are plenty of advisors but make sure you pick an excellent advisor – contact us now for further information.  We’re here to help.

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