The UAE has introduced over three dozen reforms in the last decade to become more business-friendly for investors. The country currently ranks at 16th position in terms of ease of doing business, and it aims to reach the top position by the end of 2021.
But even with so much support from the government, entrepreneurs looking to establish a new business in the UAE can often find it challenging to navigate through the many business regulations and compliances within the country — especially when they are doing it for the first time.
To help you out here is the ultimate checklist to setup and register a company in the UAE:
Select the business activity you want to venture in
The first step towards registering a company in the UAE is deciding the kind of business you want to establish. You can choose from thousands of business activities from different industries including technology, gold and diamonds, energy, FMCG, aviation, education, finance, and media.
While the mainland businesses are free to trade in over 2000+ listed business activities, there are some restrictions in the free zones, depending on the location.
Pick a company name
With your main business activity decided, it is now time to select a company name that will define your business for years to come. The name you choose should be unique and at the same time reflect your company’s main business and general purpose. The company name can only be approved if it meets the key requirements like:
- The name shouldn’t be the same as a previously registered company in the country
- The name should not violate any public orders or morals of the UAE
- The name should not include the names of any governing authority or religion
- The name should be compatible with the legal status of the company and the business activity it will be undertaking
Decide the right legal structure for the company
Before registering a company, you also need to decide on its legal structure. You can select the right legal structure depending on the business activity, the number of partners that are involved in your business, and whether the partners are locals or foreigners.
In the UAE, there are numerous types of company formations that you can choose from, including:
- Sole proprietorship
- Civil company
- Limited Liability Company or LLC
- Private shareholding company
- Public shareholding company
Select a local service agent or sponsor
When foreigners set up a company in the UAE, they need to partner with a local service agency or a sponsor. Whether you will need a local service agent or a sponsor will depend on the type of business you are setting up.
For instance, if you are trying to set up a business with an industrial or commercial license, then you will need a local sponsor, who can either be a UAE company or a UAE national. While it is required for the local sponsor to own 51 percent of the business, the profits are not split accordingly and full control of the company still remains with the foreign company investors and founders.
Similarly, if you are planning to trade with a professional service license, you will need a local service agent. While you will still own your business 100 percent, the local service agent will be the main representative for all your business dealings with the government department.
Preparing documents for initial approval
Before you can even apply for a business license in UAE, you need initial approval from the government. In order to get the initial approval, you need to prepare the following documents:
- A completely filled out application form for the initial approval
- The business plan for your company
- If you already have an existing company, then you need to share the existing trading license for it (This is only required if you have a local company)
- Passport copies of all the company shareholders as well as the director of the company
- Specimen signatures of the company shareholders and the director
- A certificate of reference from the personal bank of individual shareholders
- Unit title deed
- NOC from current sponsors (only for foreign individuals)
- Letter of Intent
- Original and notarised Registry Identification Code Form (RIC)
Once you have got the initial approval, you need to start preparing the paperwork for business registration. There is a registration fee along with a business license fee which has to be paid separately.
For business license and registration, you will need the following documents
- Filled out application form for business registration
- Power of attorney granted to the manager or the director of the company
- A document about board resolution selecting and appointing the head of the company
- Any memorandum and articles of association
- Passport size photos and specimen signatures of the director or manager of the company
- Details about how the company is sourcing capital to conduct business
Fulfiling the visa and immigration needs
Businesses in the UAE need an Establishment Immigration Card (EIC) in order to allow employees to emigrate and work in the UAE. The card is given by the General Directorate of Residency and Foreign Affairs.
It is important to note that people within the age range of 18 and 60 are eligible to get an employment visa. Also, an education certificate is required for women and for all employees in managerial positions.
There is usually a limit on the total number of visas that can be issued by a company, which depends on the location and type of the business. It is possible for companies to increase their total visa quota by applying for an increase in the quota or moving to bigger office spaces.
Partner with a company set up consultant
Setting up a business overseas, in a new country can be a big challenge, particularly in the UAE which has numerous legal processes for company formation. Instead of venturing on your own, you can partner with a company set up consultant like Centurion Consulting LLC that can guide you and make the entire process superbly easy.
Centurion Consulting LLC offers end to end business consulting services in the UAE and helps companies launch, grow, and reinvent themselves in the country. Their services also include market research, entry strategy, corporate structuring, regulatory compliances, and more.
Take a free online or offline consultation session of over 45 mins with Centurion Consulting LLC to know how it can help take your business to new heights.
