Legal Requirements for Starting a Company in Dubai: A Comprehensive Guide

Dubai, known for its strategic location, business-friendly policies, and vibrant economy, offers a unique opportunity for entrepreneurs worldwide. In this guide, we will walk you through the essential legal requirements and steps needed to establish a company in Dubai.

1. Choose Your Business Activity

The first step in setting up your company in Dubai is to clearly define the nature of your business activity. Dubai supports a wide range of business activities, each with specific requirements and regulations. Your choice of business activity will impact the type of license you need and the setup process.

2. Select a Legal Structure

Dubai provides several legal structures for businesses. Here are the most commonly used options:

Limited Liability Company (LLC)

The most popular structure for foreign investors, requiring at least one local sponsor holding a minimum of 51% of the shares.

Free Zone Company

A business structure that allows for 100% foreign ownership, with business operations limited to within the free zone or international markets.

Branch Office

A branch of an existing foreign company, allowing business operations in Dubai under the parent company's name.

Sole Proprietorship

Owned and managed by a single individual with full control and unlimited liability.

3. Reserve a Trade Name

Select a unique trade name that complies with Dubai's naming conventions. Ensure the name is not similar to existing company names or violates public morals and order. Register the trade name with the Department of Economic Development (DED).

4. Initial Approval from DED

Obtain initial approval from the DED to proceed with formalities. This approval assures that the Dubai authorities have no objections to your business activity.

5. Draft and Notarize the Memorandum of Association (MOA)

For certain business structures like LLCs, drafting and notarizing the MOA is mandatory. The MOA outlines the company's structure, activities, and share distribution. It must be notarized by a public notary in Dubai.

6. Choose a Business Location

Secure a physical office space in Dubai. Free zone companies must operate within their respective free zones. The location must meet the requirements for your business activity and legal structure.

7. Apply for a Business License

The type of license required varies based on your business activity. The main categories are:

Commercial License

For trading activities.

Industrial License

For manufacturing and industrial activities.

Professional License

For service-oriented businesses.

Submit the necessary documents, including the MOA, lease agreement, and initial approval, to the DED or the respective free zone authority.

8. Register with the Dubai Chamber of Commerce and Industry

All companies in Dubai must register with the Dubai Chamber of Commerce and Industry. This registration aids in networking and accessing various business services.

9. Obtain Additional Approvals

Depending on your business activity, you may need additional approvals from specific government bodies. Health-related businesses, for example, require approval from the Dubai Health Authority (DHA).

10. Visa and Labor Card

If you plan to hire employees, apply for visas and labor cards. The Ministry of Human Resources and Emiratisation handles labor regulations, while the General Directorate of Residency and Foreigners Affairs manages visa issuance.

11. Open a Corporate Bank Account

Finally, open a corporate bank account in Dubai. Provide all necessary documents, including the trade license, MOA, and passport copies of the shareholders.