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Starting business in Dubai

In only four decades, Dubai has emerged from the sands of the desert and developed into a modern metropolis. The city's booming businesses, tax-free incomes, beaches, luxury hotels, fine restaurants and low crime levels have attracted a growing expat community. Due to the mixture of tourist and business opportunities Dubai property presents a sustainable investment opportunity. Dubai property purchasers can currently expect excellent returns on their investments.

Because of this thousands of Brits and people from other countries are establishing new lives in the Gulf state, where the sun always shines and there is no income tax.

There are three major considerations to be made by those thinking of starting a business in Dubai:

  1. You must have a good knowledge of the region. Be prepared to undertake extensive research into the business sector you aim to operate within. You must have a viable business plan, which includes a study of the market conditions, the competition and your forecast results.
  2. The law requires that you have a local partner who holds the majority interest and can therefore control the business (as well as close it, if he feels like it…).
  3. When the business is registered, you must show the Ministry of Commerce that you have a substantial sum of money to invest. The required sum varies between the states (it’s between $10,000/£6,500 and $50,000/£33,500 in most cases) and is reagrded as a guarantee against liabilities, although you may withdraw the money shortly afterwards!

All businesses, whether industrial, professional, trading or services, must be licensed to operate in the UAE. Licensing procedures vary from emirate to emirate and the relevant details are available from the individual Chambers of Commerce.

The Commercial Companies Law and the Trade Agencies Law constitute the primary federal legislative framework controlling commercial activities in the UAE.

Whatever type of business you are setting up, you will need a license to do business in the United Arab Emirates. The three types of licenses are –

1. Commercial license (all kinds of trading)
2. Industrial license (manufacturing or industrial)
3. Professional license (professions, services and craftsmen)

Before starting to setup a company, you need to decide how the ownership of the company will be.
In case of Partnership Ownership 51% of the company will be owned by a UAE national and the other 49% you may own, with the business being situated anywhere in the UAE.

By law, banking, insurance, and financial activities should be setup as public shareholding companies, but for foreign companies in this category can setup a presence by opening a branch or representative office.

It can be Joint Venture, which is a contract agreement between a UAE party and a foreign party for the engagement in a desired business. The local party in the joint venture must have at least 51% of the company, while the profit and loss distribution can be prescribed.

Or a limited liability company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company's capital.

In order to start up a company that is solely owned by you, requires that you setup one at one of the free trade zones throughout the UAE.

Author: by Carol Grant

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