Excellent business opportunities, good purchasing power, modern infrastructure, and unique tax strategies have made Dubai one of the most attractive business hubs around the world. Dubai is one of the best places to start small businesses or startups and run branches of well-established infrastructures. The city is now populated mainly by the working-class and is being visited by thousands of tourists every year.

Dubai has two areas for conducting business in: i) Dubai free zone that enables foreign investors to establish their 100% owned business and offers unique tax-free opportunities, ii) Dubai mainland, which is a popular zone for conducting business locally in the whole UAE and establish strong local ties.

For business in Dubai mainland, there are a few requirements and steps to take before obtaining the final approval: 

1. Business Activities: determining the nature of the business is the first and obligatory for forming any business in Dubai. The decided business should then be approved and fall under one of the Department of Economic Development (DED). 
2. Office or Business Location: this is one of the main factors that decide the success of a business. Determining the place of the business is also mandatory in the process of legally registering the business. 
3. Legal Structure: there are various legal business forms that companies can be established under. The legal structure of a business also depends on the nature of the business. This is why determining the type of the business carefully is of high importance.
4. Local Sponsor or Local Service Agent: this is applicable for those businesses set up either in the mainland (not a free zone in which a business can be owned 100% by a foreign investor) or fall under categories that necessitate partnering with a local partner. 
5. Other Documents: the documents required for establishing a business are usually straightforward to prepare. They are mainly the visas or passports of the shareholders, the sponsor’s Emirati ID, MoA, contract draft, necessary trade licenses, etc. 

Once all the steps above are followed, registering a company or business should not take longer than a week by the DED.

Smart Zone

With the right guidance from our dedicated Business Setup Advisors and quick turnaround time, Smart Zone can setup your Dubai Mainland business on the same day.

We will assist with all your trade license requirements, PRO services and take care of the visa procedures for yourself, your employers and your family members.

The very first step for establishing a business is assessing the preliminary business establishment costs. The zero company and personal income tax policy enforced in Dubai has attracted many foreign investors’ attention. However, there are costs for obtaining a trade license, and business registration should be evaluated in advance.

There are two options for selecting an area for establishing a business in Dubai: i) Dubai free zone, and the more popular ii) Dubai mainland areas. The aforementioned costs regarding registering a business thus are subject to the selected area. 

There are few steps to take for setting up a business in Dubai mainland:

Initial approval from the Department of Economic Development (DED)

This is a one-time cost issued by DED and amounts to AED 110. This initial approval from DED allows foreign entrepreneurs to start their business 120 days from the license issuance, while the other documents are under investigation by DED.

Approval of trade name

This is another one-time cost and ranges between AED 700 – 900 if the name selected for the business is Arabic, and can increase to AED 3,000 for non-Arabic names.

Office rent

This is a monthly charge, and as a standard, it is AED 80 per sq. feet in Dubai mainland. Renting a physical space for conducting a business is mandatory in Dubai mainland as DED considers this space and the documents associated with this space for approving the legitimacy and registration of the business set up. 

Attestation of Memorandum of Association (MoA)

An MoA needs to be drafted in a law firm or any other legal entity eligible for writing this piece of document. This MoA needs to be approved by all shareholders and be submitted to the DED. As this process needs to be done only once, the cost associated with it (AED 400) is also a one-time cost. 

Drafting of contract and court agreement attestation

This draft also needs to be approved by all shareholders and is a one-time payment amounting to AED 1,000 – AED 2,000 + AED 300 for preparations performed by a legal firm. The contract draft and court agreement both need to be written in Arabic and English. 

Registration with Ministry of Economy

This step is necessary for the official registration of the business in the UAE and is a one-time cost of AED 3,000. Once this payment is made, the business becomes officially legal. 

Trade license fee

There are various trade licenses available in the UAE, and based on the nature of the business, the license costs vary. The first time the license is issued, its cost is around AED 15,00, while the license’s annual renewal is much cheaper, i.e., around AED 3,000. 

Commercial license fee

Plus trade license, a commercial license is mandatory for operating a business in the UAE. This license should be renewed annually and costs AED 700 (same for the renewal).

Fee for Chamber of Commerce

The costs associated with this fee vary based on whether the business entity is manufacture-related or industrial. On average, the annual fee charged by the Chamber of Commerce is AED 1,200. 

Fee for improvement of commercial services

This is a fee charged by the government for the services they offer in the whole process and is a one-time payment of AED 400. 

Fee for administrative services and waste collection

This fee is charged by the DED and is self-explanatory. This is a one-time fee, costing AED 1,050. 

Market fees

This fee is charged by the government and is similar to paying annual tax. Usually, this fee constitutes the office rent, 5% of the rent for shops, and 20% of the rent for warehouses. Thus, this fee is subject to variations, but approximately, it can amount to an annual cost of AED 1,250.

Smart Zone

Smart Zone‘s business setup experts can guide you from documentation to application and corporate bank opening hassle-free. Call +97155 233 0077 today.

E-commerce business is booming worldwide, and the UAE, as one of the world’s most modern business hubs that have been thriving quite fast in the last decade, is no exception to this trend. Online shopping has become a big part of almost every business today and is changing the business model as the number of e-shoppers is constantly increasing. The increasing demand for an e-commerce license in the UAE proves that online trading will grow even further in the UAE. 

Process of applying for an e-commerce license 

There are a few steps for registering an e-commerce license in the UAE:

1. Selecting the business jurisdiction: there are mainly two business jurisdictions in the UAE, i) free zone and ii) mainland. Before applying for the e-commerce license, this jurisdiction should be selected. The e-commerce license shall be issued by the corresponding authorities then. 
2. Selecting the business’ legal structure: the most common legal forms in the UAE are either an LLC, company branch, representative office, or sole establishment. This step is essential for registering the e-commerce license. 
3. Registering the trade name: there are terms and regulations for selecting a trade name. Once selected, the corresponding authorities will issue the initial approval stating that the chosen name is available and meets the set criteria. 
4. Submitting the e-commerce application: this process depends on the selected jurisdiction. For the mainland, the Department of Economic Development (DED) will issue the license, while in free zones, the free zone authorities directly should be approached for registering the license. 

Required documents for registering the e-commerce license

The required documents for registering the license are as follows:

1. Passport or visa copies of all shareholders
2. Passports or Emirates ID of sponsors and local partners 
3. Local sponsor or local service agreement 
4. NOC from the relevant authority
5. Draft of the MoA approved by all shareholders 

Once the application is completed, the main applicant can apply for their UAE residence visa and a limited number of visas for their employees (this number depends on the size, location, and nature of the business). The visa application process is rather straightforward, even for the main applicant’s dependents. If the intended business also involves trading physical goods, entrepreneurs also need to rent a warehouse. This can be either opted for a third party logistics or be built independently by the entrepreneurs. The last step to take before running a business in the UAE is opening a corporate bank account. Every bank in the UAE have their own regulations and criteria for opening a bank account, and they offer various services suitable for specialized business fields. Thus, it is important to choose them carefully. For a smooth e-commerce business setup in Dubai Mainland or Free Zone, call +97155 233 0077 and talk to one of Smart Zone‘s business setup experts.

The UAE is one of the world’s most famous business hubs for its excellent tax policies and vibrant and clean business environment. Setting up a business, be it expanding a business or starting it from scratch, has proved to be cost-effective and profitable for foreign investors. The question of the cheapest trade license option in the UAE can be broken down into many questions and depends on many factors. The UAE has many established free zones, and each of them has its cons and pros for starting a business. To emphasize this fact further, the UAE’s free zones are divided based on specialized business activities. With this in mind, it is best to first look for the free zone that suits the nature of the business best and then apply for the corresponding trade license from the selected free zone authorities. However, here is a list of the cheapest trade licenses in the UAE, regardless of the limitations on various businesses in every free zone:

• Sharjah Media City (Shams Free Zone) – The free zone is currently running a promotion of AED 5,750 for a limited time only. This is open to all media and e-commerce activities. The timeline for Shams Free Zone license setup normally takes less than a week.
• International Free Zone Authority, Fujairah (IFZA) – IFZA license fees start at AED 11,500. This price does not include visa costs or any consultancy services. A zero-visa trading license starts at AED 13,500 in IFZA.
• Ajman Free Zone – Starting from AED 11,000, a foreign entrepreneur can already get a Free Zone license. The timeline for the whole business setup normally takes only two business days. This is also open to all business activities. Five similar activities can be conducted with the same license.
• Ras Al Khaimah Economic Free Zone (RAKEZ) – The minimum cost to start a commercial business in RAKEZ is AED 14,800. Entrepreneurs can conduct five activities under the same license they apply for (if the businesses are suitably connected). Any additional activity belonging to the same category will cost around AED 1,000. Two different activities from different categories will cost AED 3,000.
• Fujairah Creative City Free Zone – The free zone license fees start from AED 13,325 for the most basic business setups, covering the costs for 1 visa.

Benefits of Operating a Business in a UAE Free Zone

• Fast and easy setup
• No personal presence requirement 
• Open to a wide range of business activities
• No NOC requirement – this is of particular interest for persons already employed by other companies, small businesses, and solo entrepreneurs 
• 0% corporate and personal tax
• 100% company ownership
• Full range of business activities permitted
• 100% repatriation of capital and profits
• No currency restrictions
• 100% import and export tax exemption within the free zone

One point which should be considered in general about starting a business in the UAE is that there are more than thirty free zones in the UAE that offer ‘affordable’ trade licenses for foreign entrepreneurs. This implies that, depending on the nature of the business, running a business in the UAE is relatively simple and straightforward. 

Smart Zone

Let our business setup experts help you get started with your company formation in the UAE. Call +97155 233 0077 or email info@smartzon.wwwsg1-ts102.a2hosted.com today.