How to Start a Business in the UAE: 5 Methods to Open a Company

Pauline Familara
Pauline Familara
13 November 2023
How to Start a Business in the UAE: 5 Methods to Open a Company

Many foreigners who want to run business in the United Arab Emirates are interested in how to open a company in the UAE, and what rules of doing business will apply to them? Having analyzed different options for establishing the business presence of a foreign investor in the Emirates, we have identified 5 ways to start and run a business here and give you a short overview of each of them.

Method 1: Trade from Abroad

The remote method of doing business in the UAE or trading from abroad involves the sale of goods and services in the country without being in it. This allows you to save on a physical presence in the Emirates and only requires the mandatory registration of a legal entity by the competent country authorities and the acquisition of an appropriate license.

Before you decide how to start such a business in the UAE or stick to something else, you need to know the following characteristics of trading from abroad:

  • Possible only for specialized goods and services.
  • Does not contribute to business expansion, since it is difficult to establish trusting relationships with clients and business partners remotely.
  • Requires thinking in advance about how to solve emerging problems without a physical presence in the country.

Method 2: Doing Business in the UAE Through an Agent (Distributor)

This option also does not require a physical presence in the Emirates, and the participation of an agent requires careful verification of his reliability when choosing a suitable business partner. The main advantages of doing business through a distributor are the following:

  • Savings on physical presence.
  • Reduction in the cost of goods and services due to these savings.
  • Reducing your risks.
  • Use of the third party (agent) existing customer base.

An agent can act under registered and unregistered agreements. A registered agreement can only be with a UAE citizen or a legal entity owned by Emirati citizens. Entering into a distribution agreement with them can be expensive and challenging due to the country’s strict regulations and restrictions.

Method 3: Starting Your Business in the UAE

To do business in the UAE, you can open your own company: local on the mainland outside the free zones, onshore in the free zone, or offshore.

How to Open a Mainland Company in the Emirates

A local company is allowed to conduct business throughout the UAE. It must pay 5% VAT and 9% income tax and can be registered in various forms, but the most popular is the Limited Liability Company (LLC).

Today, to open a mainland company, in most cases, you do not need a local partner, but need the following:

  1. Choose the type of activity.
  2. Agree with an agent — your representative in government agencies.
  3. Obtain permission from the Office of Residents and Foreigners Affairs.
  4. Buy (rent) an office.
  5. Register a company and receive an Establishment Card by registering with the migration service.

How to Register a Company in the UAE in the Free Zone

Registration of a company in a free zone allows you to conduct activities only within its zone. Doing business in another territory is possible only through a distributor (agent) represented by a local company. You will be exempt from taxes if you operate in the UAE legally. To open a company in the free zone, you need the following:

  1. Prepare constituent documents and register a legal entity.
  2. Register founders and employees with the migration service.
  3. Apply for an e-visa for the founders if they require permission to enter the Emirates to complete the registration process.
  4. Obtain resident visas and Emirates IDs for business owners and employees.

How to Open an Offshore Company in the Emirates

Having an offshore company, you can conduct international business outside the UAE and buy real estate in the Emirates. The tax is provided only for the purchase of real estate (4%). To open an offshore you will need the following:

  1. Find a registered agent.
  2. Reserve a company name.
  3. Obtain approval to open an offshore company from the regulator.
  4. Issue licenses.
  5. Register a company and open a corporate account.

Method 4: Opening a Joint Venture

Most joint ventures are created by foreign businesses in the form of a Limited Liability Company, either as a local firm or a Free Zone company. Two or more partners run a business and share all profits and losses. The joint venture may be structured as a company, private limited company, or other form.

Method 5: Merger and Acquisition. Is Existing Business Worth Buying?

Merging or purchasing a company allows you to quickly integrate into the existing business environment and start making a profit almost immediately. But before you open a company in the UAE in this way, you need to carefully check all the activities of the business you are acquiring. This will require the involvement of experienced specialists.

When done correctly, business merging or purchasing has many benefits but also carries certain risks. You decide whether it is worth buying a ready-made business.

This article is for informational purposes only and should not be considered a substitute for legal advice. Contact the Dynasty Business Adviser specialists to get detailed advice on how to start a business in the Emirates, and which method to choose!

  • "Abu Dhabi helps Dubai with bank bailout". Arabian Business. Archived from the original on 4 December 2020. Retrieved 10 May 2017.

  • GSL Law & Consulting. Офшор для чайников. — М.: «Диалектика», 2010. — С. 144. — ISBN 978-5-8459-1710-2.

  • "Ease of Doing Business in United Arab Emirates". Archived from the original on 1 December 2017. Retrieved 24 November 2017.

Frequently asked questions

What Is the Fastest Way to Open a Company in the UAE?

The fastest way to open a company in the Emirates is by purchasing an existing business or merging with an existing company. This will require time to check all the economic and financial activities of the existing business, but you will not have to deal with the selection and hiring of personnel, installation of the necessary equipment, and advertising campaigns. In addition, when the audit is carried out by economists and lawyers who are well-versed in local legislation, it will not take much time.

What's the Best Way to Start a Profitable Business in the UAE?

The profitability of a business does not depend on the method you start it with. The correct organization of business processes, the chosen type of activity, and the amount of investment have a more significant impact. If you have already decided what type of business to start in the UAE, contact the specialists of our company, and we will help you choose the appropriate method of running a business, emirate, place of registration, and legal form.

What Is the Cheapest Way to Open a Company in the UAE?

The cheapest way to establish your business presence in the Emirates is through trading from abroad or e-commerce. The UAE Department of Economic Development offers three types of licenses in this area — electronic trader, virtual company, and the operation of an electronic trading platform.

How to Save Time on Registering a Company in the UAE?

To save time on registering a company, it is worth contacting specialists located in the UAE who are well-versed in local legislation. This will allow you to correctly prepare documents and quickly respond to requests and requirements from regulators. You will find such specialists in Dynasty Business Adviser — a licensed registrar of onshore and offshore companies in the Emirates.

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