If the plan is to set up a company in Dubai, then it is necessary to register it which involves specific basic steps that is to be taken. Trade license is an absolute must for business of all categories to set up business in Dubai. The requirements for required permissions and trade license from different government ministries and agencies however, will vary depending upon the business category. More clearances will be required by some businesses like the health services, financial services, food trading, publishing, etc. when compared to the general trading business.

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Licenses that are issued in Dubai for company registration purposes basically are divided into three categories.

Depending upon what kind of activity the business entity would like to involve in, states in which category the license will be issued, like:

Dubai Commercial License: It is issued to companies engaged in any type of trading activity.
Dubai Industrial License: It is issued to companies which engage in industrial or manufacturing activity.
Dubai Professional License: It is issued to professionals, craftsmen, artisans and service providers.

Dubai’s Economic Development Department is considered to be the government agency that is responsible to issue local company licenses. It delivers licensing services from several locations.

Business Licensing Requirements

Business registration approval process in Dubai:

License to be issued for financial institutions and banks are to obtain UAE Central Bank approval.
License to be issued for manufacturing companies are to obtain Finance & Industry Ministry approval.
License to be issued for companies that are engaged in insurance including other relevant firms are to obtain Economy & Commerce Ministry approval.
License to be obtained for medical & pharmaceutical products are to obtain Health Ministry approval.
Additional approvals and endorsements will be required from various other government agencies for companies that are engaged in oil or gas production.
Business registration is to have involvement of Dubai Chamber of Commerce & Industry.

Business Ownership requirements

Each and every company, besides those having professional license, established in Dubai or anywhere within the UAE will require UAE nationals to have not less than 51% (fifty one percent) shareholding.

The given below six conditions are cited to be few exceptions to such requirements:

Company set up at any Dubai Free Zone.
Where 100% local ownership is required by law.
Where GCC (Gulf Cooperation Council) wholly owned company has partnership with another wholly UAE national owned company.
Where 100% ownership in certain activities is permitted for GCC entities or nationals.
Professional companies or artisan where there is allowed total foreign ownership.
For foreign entity that registers branch office or a representative within the UAE.
Where there is being applied professional license for professions like artist, doctor, architect, etc. There can be 100% foreign ownership. But a local national is to be hired as ‘service agent’.

Registration Procedure

Step 1: Determine who the local partner, i.e. sponsor will be. Careful consideration will be mandatory in this step with regards to the type of services expected from the sponsor.

Is the sponsor expected to provide solutions to problems faced with government procedures or,
Is his name simply required on the license for formality purpose and for nothing else?
What kind of annual fees is being planned to be paid.

Many potential problems may be prevented if there is good rapport with the sponsor.

Step 2: Approval from DED (Dept. of Economic Development) is necessary to obtain name and activity. Application can be made on standard application form after which it is to be submitted at the DED.

Step 3: Identify business premises and get hold of tenancy contract. Businesses planned to be setup in Dubai are to have proper and valid premises supported with tenancy contract, for the business to get fully registered.

Step 4: Take help of sponsor to prepare MOA (Memorandum of Association) and then submit the same to DED. The memorandum can be typed by any legal firm and is to clearly specify ownership percentage and special arrangements made among all the partners.

Step 5: License and MOA application is to be made at DED besides the tenancy contract and necessary legal documents. It is during this stage that all fees and charges are to be cleared. On completion of step 5, license is generally obtained after a week or so.

Originally posted 2021-09-29 06:32:33.