How to Start a Small Business in the UAE: A Complete Guide

Starting a small business in the UAE can be exciting and rewarding. With its strong economy, favorable tax policies, and business-friendly environment, the UAE has become a hub for entrepreneurs and small business owners.

However, starting a small business in the UAE can also be complex and challenging, particularly for those unfamiliar with the country's laws and regulations. The UAE comprises seven emirates, each with its own rules and regulations governing the establishment of new
businesses.

In this blog post, we will provide an overview of the process of starting a small business in each of the seven emirates of the UAE, including the required licenses and other legal requirements.

Start a Small Business in Different Jurisdictions of the UAE

Before proceeding with the process of business setup in UAE, it is essential to understand the UAE's emirates are Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain and jurisdictions are Mainland, Free Zone, and Offshore.

How To Do A Small Business Setup In UAE’s Mainland?

The procedure for forming small businesses in UAE Mainland Company is quite straightforward, just like any other incorporation in the UAE. Here are the steps to register your business in the UAE Mainland:

Decide what activity to perform - One should decide the business activity to be performed in the UAE.

Get an Agent (If Required) - In the case of a Sole Proprietorship Business or an LLC Business, the management needs to get a Local Service Agent to own 51% of your business's shares. However, in the case of activities like Trading, Manufacturing, Contracting, and Packaging, 100% foreign ownership would be applicable.

Check the location of the Business - Check for a suitable location and will the Business is easily accessible to its customers.

Obtain Initial Approval - Obtain initial approval from the Department of Economic Development (DED) to ensure the smooth working of the Business.

Get your office space - Having office space is mandatory in the UAE mainland. A registered office address is required for the issuance of a trade license. In addition, information regarding ownership agreements or tenancy can be produced as evidence of a registered address.

Apply for Mainland License - If all the prerequisites mentioned above are satisfied, you may apply for a mainland license. DED is the agency that issues the mainland license in the UAE.

Submit all the Documents - Submit all the relevant documents connected with company incorporation to the Commercial Registration Department and DED and pay the required license fee.

How To Do A Small Business Setup In UAE’s Free Zone?

Although there are no restrictions regarding nationality when forming an offshore company, it's often a matter of practicality. The following are the requirements for starting a company for international entrepreneurs searching for the best offshore jurisdiction.

Determine the type of legal entity - Determine the entity type you want to set up in any free zone. The capital requirement for such an entity depends upon that particular free zone where you want to form a company; for example, there is no minimum capital investment required for setting up a business in twofour54, whereas, in Dubai Airport Free Zone (DAFZ), you are supposed to have a minimum share capital requirement of AED 150,000.

Choose a Trade Name - After deciding the type of legal entity, choose a trading name for your company. Again, it would help if you cross-check with the respective free zone authority about the allowed trade names, and the intended name has already been registered.

Apply for a Business License - After choosing a trading name and registering the same in the free zone authority’s portal, you must apply for a business license. The list of the different business licenses the free zone authorities issued has been stated above. The type of business license depends on the primary activity of your business. Therefore, you must submit the supporting documents while applying for the license.

Choose an Office Space - Free zone authorities provide flex-desk office service to support start-ups. You can either buy or lease office spaces in free zones. Office space depends on the number of employees and the type of business activity of your company.

Get Pre-Approval, Register your Business, and Get the License - Get the initial and related business approvals from the specific authorities, register your business at the portal, and get your license. It will take 2-4 weeks to finish this process. Once you get the license, you are good to start your business.

Apply for Mainland License - If all the prerequisites mentioned above are satisfied, you may apply for a mainland license. DED is the agency that issues the mainland license in the UAE.

Submit all the Documents - Submit all the relevant documents connected with company incorporation to the Commercial Registration Department and DED and pay the required license fee.

It's important to note that the exact process and requirements may vary depending on the specific company structure, business activity, and jurisdiction. Therefore, consulting with a professional business advisor or legal expert is recommended before proceeding with the incorporation process.

How To Do A Small Business Setup In UAE’s Offshore?

Get Expert Assistance - The first step before starting an offshore company is hiring or seeking advice from a business consultant. A business consultant would provide ample resources; the experts will guide you through the incorporation steps. Also, explore why to hire an offshore business consultant.

Select a Company Name - It would help if you first recalled that your UAE offshore business's name must include the suffix "Limited or Ltd" to indicate that it is an offshore company under UAE law.

Fill Out an Application Form - After selecting the desired company's name, one must complete the application form and submit pertinent documents.

These documents include the following:

Identity proof of the shareholders and directors
Address proof of the shareholders and directors.
CV of the shareholders and directors
Well-drafted business plan
Photocopies of the shareholders and directors

Submission of the Concerned Documents - All relevant documents must be gathered, then presented to the appropriate authorities, who will review them and grant the necessary approvals.

Open a Bank Account - The last step is to open an offshore bank account, enabling business owners to conduct financial operations efficiently. Here is a guide on opening an offshore bank account that will make it easier for you to comprehend the entire process.

The owners of businesses can open an offshore company and an offshore bank account in various locations with the aid of offshore jurisdictions. Also, know about how to open an anonymous offshore bank account.

Best Small Business Ideas In UAE

There are enough opportunities in various industries to do a business setup in UAE. Here are the best small business in UAE, which are small initially with minimal capital but a healthy Return On Investment (ROI).

Apparel - If you are a fashion enthusiast, this could be a business opportunity to connect you with customers globally.

There is a high demand in the UAE, whether the supply of women's clothing, men's clothing, or kid's wear.

Information Technology - There are two main reasons for the massive demand for IT and tech professionals. The first cause is the advancements in technology.

The UAE government has even developed free zones that set up IT-based businesses.

Bookkeeping - There is a request for professionals and firms that offer bookkeeping services, including various large and medium-sized firms in the UAE and the whole of the UAE.

There are opportunities for people with a finance and accounting background, and you'll need almost zero capital.

Real Estate - There are various opportunities in different real estate segments.

Real estate development, property management, or brokerage exist, and you can decide which one to venture into.

Financial Services - The banking, Financial Services & Insurance (BFSI) industry is well-developed.

Moreover, UAE has a perpetual requirement for accounting, bookkeeping, auditing, and other financial services.

Retail - The UAE is renowned for its 'souks,' or bazaars, especially jewelry, and the Emirate is referred to as the Middle East's retail hub, with more than 70 shopping malls.
And the territory of online retail is just a little behind too.

Tourism -The tourism business in UAE draws millions of visitors annually and is one of the world's most attractive tourist destinations.

Entrepreneurs working directly or indirectly in hospitality and tourism should look forward to UAE's lucrative opportunities.

Schooling - UAE's school-going population has predicted to grow in the future.

More teaching practitioners and educational institutions should expect to succeed in the city.

Healthcare - People care for their well-being in UAE, and there is a need for specialized healthcare facilities here as a consequence.

A quality-oriented private company in the health & wellness field is expected to get a boost in the Emirate.

Trading - The very lifeblood of the city is import & export, and everything from eatables, textiles, jewelry to furniture, luxury goods, and vehicles is traded in UAE.

UAE invites merchants with open arms due to its business-friendly and progressive atmosphere.

Advertisement Agency - There are several business models and paths that you can consider when planning on joining this industry.

Brand growth, animation, 3D modeling, and media purchasing are among the top business opportunities in advertising.

Business Consultancy Service - Consulting services are provided as the most lucrative business prospects in the UAE.

The benefits outweigh the obstacles to the vast expertise that comes with the market.

Education - Due to the enormous ex-pat population in the UAE, there is a tremendous opportunity for everyone who wants to set up schools. Certifications, permits, and utilities are the main specifications you need.

E-Commerce - Although the region's e-commerce market is less developed than Europe, the United States, or China, investors can still target many shoppers.

The UAE has a large population and taste, so an industry such as e-commerce can survive for a long time.

Recruitment Agency - There is a prepared market for recruitment agencies, and apart from demand, recruitment agencies have been made such a lucrative opportunity as they need minimal capital.

As the economy continues to rise, the demand for skilled labor is constantly growing, and the support of the professional labor force powers industries.

Transportation - The transport sector has many unexhausted prospects, and transportation is gaining directly from tourism.

Hence, starting a transportation business in the UAE can produce a fantastic return for a passionate entrepreneur.

Security - The UAE has fewer security issues than most developing countries, but individuals and companies do not risk their assets.

That's why the demand for security personnel or guards has risen in the region, and you can also make money by providing security devices like alarm systems and surveillance cameras.

Although the UAE is a lucrative business location, keep in mind that there are rules that you must analyze, learn, and obey.

You have nothing to worry about as long as you follow the rules and seek advice from Gryffin Capitalist. Contact us right away for more information!