The construction industry is considered the most dynamically developing sector in the UAE economy. New real estate and transport infrastructure objects are constantly being built. The construction business in Dubai, the second largest emirate in the country, is hugely in demand and profitable. New free economic zones are often opened here, which requires the creation of appropriate infrastructure, and the development strategy of the city of Dubai provides for an increase in its size by 1.5 times by 2024. Given the high demand for the construction of new facilities, the federal and municipal governments of all 7 emirates of the UAE welcome expanding the number of construction companies by attracting foreign capital.
The Prospects for the Construction Business in the UAE
To assess the opportunities for doing business in the construction industry of the Emirates, you need to know the following:
- Its share in the country’s economy is 7%.
- According to experts, the volume of the UAE construction market will reach more than $130 billion by 2026, ensuring growth rates from 2021 to 2026 at the level of about 4.5%.
- The UAE is constantly implementing various government programs, a crucial part of which is the construction of infrastructure facilities and efficient transport networks. Such projects as the Sheikh Zayed Housing Program, the Energy Strategy 2050, or the Dubai Tourism Strategy can be mentioned here.
- The total volume of construction projects planned today in the UAE is over $280 billion.
The grandiose development plans being implemented in the Emirates require significant resource support and an increase in the construction industry’s capital intensity, including attracting foreign capital.
Choosing a Niche in the Construction Sector of the UAE Economy
You can conduct any business in the Emirates only with a license. Obtaining a construction license in the UAE depends on what kind of work you will do. When entering the construction market, you can choose a suitable niche for your company from the following areas:
- Construction of buildings and structures requires obtaining an appropriate commercial license, depending on the object’s purpose and height.
- Performance of work to bring the facility to operational readiness is the most promising niche for a new construction business in Dubai and other emirates of the UAE. It includes the following:
- summing up and connecting engineering communications;
- electrical works;
- water supply and sanitation, installation of plumbing fixtures;
- ventilation and air conditioning systems;
- fine finishing of facades and interiors;
- landscaping of the adjacent territory;
- carrying out repairs of the building and maintenance of engineering systems.
- Engineering, architecture, and design – for design activities, a professional license of one of 4 categories (G + 1, G + 4, G + 12, and UL), depending on the building height, is required, as well as the availability of the necessary qualifications from the company’s owner, engineers and architects.
- Production of building materials – obtaining a construction license in the UAE in this niche requires coordination with the Ministry of Economy, the Department of Ecology, and the Dubai Civil Defense Committee. At the same time, it will be necessary to certify all goods, and some of their types must undergo testing and expert examination.
- The sale of building materials is regulated by a trade license, which does not require approval from regulatory government agencies, but all imported goods must be certified.
- Leasing construction equipment – activities in this area require approval by the Department of Roads.
- Engineering and consulting in construction: if specialists have appropriate qualifications and experience in this niche, obtaining licenses for consulting in several construction work areas and special engineering services is possible.
How to Find Clients in the UAE Construction Business
To find a customer, foreign companies operating in the construction industry of the Emirates can do the following:
- Take part in a tender conducted by the state or private companies. At the same time, foreign businesses are guaranteed equal conditions and objectivity in the selection, support, and attention from the state;
- Offer their services to large developers if the company is engaged in the implementation of highly specialized construction works. Developers carry out the selection of subcontractors based on fair competition.
- To search for a private customer, use classic marketing tools: promoting goods and services on the Internet, launching pilot projects, participating in thematic exhibitions, and others.
How to Start a Construction Business in Dubai and the UAE
To start a construction business in Dubai and other emirates, you must:
- Choose a suitable niche and design a business development strategy.
- Decide on the jurisdiction for registering a company, its organizational and legal form.
- Rent an office – its area depends on the number of employees of the company.
- Obtain the appropriate license.
- Submit documents for legal entity registration and wait for the documents to be received.
- Open a corporate bank account.
At the end of the company opening procedure, the owner, management, and foreign personnel must obtain resident visas.
What Construction Licenses Are Available for Business in the UAE
To conduct business in the Emirates related to construction, you can get permits for the following activities:
- Construction of buildings and structures of any type (general license).
- Construction of special purpose objects: sea and airports, pipelines, electrical substations, etc.
- Execution of foundation and concrete works.
- Erection of frame metal structures.
- Finishing facades and internal building surfaces (walls, floors, ceilings).
- Installation and connection of ventilation systems, conducting commissioning work.
- Provision of construction facilities with equipment, furniture, and decorative elements on a turnkey basis.
- Construction work abroad.
- Landscape design and improvement of the local area.
In the UAE, many construction licenses do not have a category and are issued for performing highly specialized works in demand. The order of their registration is individual.
Obtaining a Construction License in the UAE
To obtain a building permit in Dubai and other federal entities of the UAE, you must first rent an office and confirm the qualifications of business owners, management, and engineering staff in the construction department.
Depending on the type of activity and license category, you may need the following:
- Coordination with the relevant regulatory agencies.
- Accreditation of engineering and technical specialists in the UAE.
- Confirmation of the availability of construction equipment and specialized freight transport.
- Providing evidence of the availability of fixed assets and a bank guarantee.
To communicate with government authorities when participating in tenders and renewing a license, it is best to appoint a process agent (Process Agent).
Dynasty Business Adviser Integrated Solutions to Support the Construction Business in the UAE
If you want to enter the UAE’s profitable and promising construction market, use the help of Dynasty Business Adviser specialists! Our company has developed comprehensive solutions for the proper organization of the construction business in Dubai and the UAE and offers the following range of services:
- Analysis and confirmation of your business development strategy.
- Consulting support at all stages of starting and running a business.
- Outsourcing services for personnel, administrative, tax, and accounting support.
- Assistance with registration of tax residency.
- Effective tax planning of international trade based on the laws of the United Arab Emirates.
- Confirmation of the conduct of operating activities and economic and physical presence at the place of the company incorporation.
With our help, you can establish a successful construction business in the UAE.
