Start Business in UAE – Points to keep in mind while incorporation


The UAE economy is blossoming, and that’s why lots of investors want to start a business in the country. But just like anywhere else in the world, it is a tedious process to start business in UAE. It can be very difficult if it is your first time to set up a business in the country. The government has implemented strict measures with regards to company formation in UAE. If you are thinking of starting a company in the country, then below are the things that you need to know before you get started.


Types of Business

There are three main categories that investors can choose from during the business setup process. The three categories include Professional, Commercial, and Industrial.

A professional license is given to professionals, service providers, craftsmen, and artisans. Individuals who are personally providing high value services, such as public relations and consultancy, just to name a few.

Commercial business is a company that engages in any type of trading activity. A company that offer goods and/or products to the public are required to register as a commercial UAE business.

When the business is engaged in manufacturing or any other industrial activity, then it must be registered as an industrial company.

It is important to be clear about the company’s activities to ensure that the business setup is properly done. There are instances in which companies undertake several activities under a single registration.


Requirements for Company Formation in UAE

When setting up a business in UAE, one needs to prepare several documents. The business registration must be approved by the Chamber of Commerce and Industry. For businesses involved in the financial industry, they must get the approval of the UAE Central Bank. Manufacturing companies should get the approval of the Finance and Industry Ministry. Companies involved in insurance must get the approval of the Ministry of Economy and Commerce. Medical and pharmaceutical companies must first get the approval of the Health Ministry before they can operate in UAE.


Legal Form of the business 

Once you have determined the activities of the business, the next step is to decide on the right legal form for the company. Keep in mind that the different types of business have different rules and regulations, especially with regards to the ownership.

You can choose your company to be a National Proprietorship as long as it is wholly owned by UAE locals. A Commercial Company requires that it is owned by at least 51 percent of locals.

If you are setting a Foreign Company Branch, then the parent company retains 100 percent ownership of the UAE office. It must also be under the same name as that of the managing firm. The foreign company branch must hire a local services agent to handle the required administration and government procedures. 

Another business setup is a commercial agency agreement. With this setup, a foreign company can enter with an agreement with a local UAE agent for the distribution and marketing of products and/or services. The local agent must be a UAE individual or a company that is wholly owned by locals.


Requirements of Business Name in UAE 

The next step in registering a business in UAE is to select a name that will distinguish the company from the rest. The trade name must be a unique one that has not been registered before or currently used names with the same activity. The trade name must also be compatible with the activity that the company is involved in.  

The registrar authorities don’t allow names to contain the names of Allah; names of governing authorities; Arab or international brands, institutions or organisations; and sectarian names. The trade name must not be against public moral and pubic order. The name should not be misleading with regards to the type of trade and the company’s size.

If the company fails to register the business within the reservation period, the trade name will be cancelled right away.


Final Approval and Application

The last step in company formation in UAE is to prepare all the documents to make sure that all legal requirements before submitting them along with the application for the business licence. The final application must be submitted within the allotted time after the initial approval. Once the registration is approved, then you can legally operate your UAE business as soon as you can.