What is the minimum investment to start a business in Dubai?
Global investors are often intrigued by the prospects of expanding their businesses to Dubai, as they seek opportunities with minimal investment requirements. This blog aims to provide insights into the question: “What is the minimum investment needed to start a business in Dubai?”
For a Free Zone company, the minimum investment required is AED 11,900. Establishing a business in Dubai offers a plethora of advantages. However, the actual minimum investment varies based on factors such as the nature of the business activity, company location (Free Zone or Mainland), office furnishing, rental expenses, and more.
Why choose UAE for starting a company?
Dubai boasts a vibrant ecosystem of small and medium enterprises spanning diverse industries. Entrepreneurs have an array of company formation options to choose from when establishing their businesses in Dubai. The business landscape in the UAE encompasses Mainland, Free Zone, and Offshore companies. With its strategic location, minimal investment requirements, and business-friendly policies, Dubai stands as the top choice for investors seeking a thriving business destination.
What is the minimum investment to start a business in UAE?
In the UAE, there are numerous business opportunities that can be pursued with minimal investment. However, costs will increase if an investor requires a visa and office space. Foreign investors have the option to start a business either in the Mainland of the UAE or in the Free Zones. The Mainland is particularly suitable for activities like retail, trading, real estate, and tutoring.
To start a business in a Free Zone company in the UAE, the minimum investment required is AED 5,500. This investment will increase if a visa and office space are needed. Despite the wide range of options available, Dubai is often the top choice for global investors looking to establish their business.
For a Mainland Company in Dubai, the minimum investment required to start a business is approximately AED 30,000 for an LLC Company. This investment provides the entrepreneur with a one-year trade license, allowing them to operate the business and establish a strong market presence. The trade license can be renewed or the business package can be upgraded to include multiple visa quotas and office space, depending on the specific requirements.
Similarly, for investors seeking a free zone trade license with office space and visa quota, the minimum investment for a company in Dubai is around AED 17,900.
Various options are available for office space, such as FlexiDesk, Shared Offices, and Executive Offices, each with different rates. Investors can choose the office space that best suits their specific business requirements and budget.
Pro Consultancy will assist investors in choosing the right company package with the minimum investment required for starting a business in Dubai.
How to start a business in Dubai? – Steps Explained
When it comes to setting up a business in Dubai, it’s highly recommended to seek the assistance of experienced business consultants. For foreign investors, the Free Zones of Dubai are the top choice due to their simplified company setup process.
For those looking to expand aggressively and establish more branches in the UAE, an LLC Company in the mainland of Dubai is the ideal option. With a minimum investment amount of approximately AED 25,000 for a services company, setting up a company in mainland Dubai becomes more accessible.
Entrepreneurs can even register a virtual company in the mainland of Dubai without the need for physical office space for up to one year. To minimize initial investment costs, a great option is to opt for a Flexi-Desk or No-Office company package, which includes a trade license from the Free Zones of Dubai.
To summarize, here are the simplified steps to start a business in Dubai with minimum investment:
Step 1: Choosing a Trade Name and Business Activity
Obtain approval for your company name from the Free Zone or Dubai Economy authorities. The investor must select a trading name and specify the business activity for your company.
Step 2: Prepare the required documents for the company setup.
Ensure all necessary documents, including copies of shareholders’ passports, photographs, and bank statements, are prepared. When establishing a Free Zone company, carefully select the appropriate company structure (FZE/FZC) and trade license type.
Step 3: Preparing the Shareholding Agreement
Please prepare the necessary documents for both the shareholding agreement and the partner agreement (for the LLC Company), as well as the memorandum of association (for the Free Zone Company). Additionally, kindly include any supporting documents such as passport copies and director’s profiles.
Step 4: Getting the Required Approvals
Obtain the necessary approvals for specific business activities, such as pharmaceuticals, education, oil & gas, and submit them along with the specified documents to the appropriate authorities.
Step 5: Fee Payment and Obtaining the Trade License
Pay the fees and obtain the Trade license from the authorities and proceed to the UAE Residence visa of the investors and the rest of the employees.
Step 6: Business License and Corporate Bank Account
Once you obtain the business license, apply for a corporate bank account to kickstart your business full-fledged.
6 Common Myths vs Reality in Starting a Company in Dubai
Investors from around the world flock to Dubai for various reasons like tourism, business trips, visiting loved ones, and more. Many of them aspire to be a part of the city’s economic growth by starting their own companies and settling here. However, there are several misconceptions surrounding the process of setting up a company in Dubai. In this article, we will debunk these common myths and shed light on the reality of establishing a business in this vibrant city. Drawing on our extensive experience in company incorporation, business advisory, and support services spanning over a decade, we will analyze a few of these prevalent myths and provide insights based on our expertise.
Myth 1: Business Setup in UAE is very Expensive
The cost of setting up a company in UAE is one of the lowest when compared to the European countries and the US and China. A single visa quota company can be set up in UAE for a minimum investment of AED 11,900 in Dubai.
Dubai offers a multitude of cost-effective options for investors looking to start a business with minimal investment. To keep startup costs low, consider alternatives like co-working spaces, flex-desks, and shared office spaces. Additionally, the Department of Economic Development provides instant licenses without office space requirements. Freelance permits issued by Free Zones are also available for individuals in marketing, creative fields, consultancy, software development, and more. With a wide range of affordable business setup options, investors can explore numerous opportunities in the UAE.
Myth 2: Obtaining Funding in Dubai is Extremely Difficult
The Dubai Government is highly supportive of business and startup growth in the region. It has established business incubators that provide funding and infrastructural support to startups and small companies for their projects.
Through the business incubator support, startups can test, develop, and launch their products both in the UAE and internationally. Additionally, entrepreneurs with innovative projects can benefit from business accelerator programs offered by many Free Trade Zones in Dubai.
Consequently, there are numerous options available for obtaining funding for your new company, while keeping the required minimum investment for starting a business in Dubai at an all-time low.
To connect with funding houses for your project, all you need is a well-crafted business plan, a feasibility study of your project, and details of the shareholders.
Myth 3: Business License in UAE is Complicated
To obtain a Business License in the UAE, investors must follow a series of straightforward steps. To streamline the process and avoid any complications, it is highly recommended to seek the guidance of a knowledgeable business consultant like Pro Consultancy UAE.
The necessary documents for setting up a company should be submitted to the appropriate Free Zone or mainland authorities. This ensures a smooth and efficient processing of the company’s trade license in the UAE. It’s important to note that certain business activities, such as healthcare, education, and gold trading, require special approvals from the relevant authorities. These approvals can be easily obtained by providing the necessary supporting documents along with the permit request.
Myth 4: Knowledge of Business and Tax Law is Must for Business
Business owners and entrepreneurs should possess a fundamental grasp of the diverse tax laws and company regulations in their region. However, an exhaustive understanding of all business laws in the UAE is not obligatory for initiating and running a company there.
As long as the company engages in fair trade practices and abides by the laws established by the UAE Government, it can seamlessly conduct its trade operations within the region and engage in international trade.
Myth 5: Mainland land Business requires a Local Sponsor
With the recent amendment in the Company Law, there is 100% expatriate ownership available in Mainland Businesses. So there is no requirement for a Local Sponsor or Local Service Agent for opening a mainland company in UAE.
The latest amendment is anticipated to attract increased foreign investment to the UAE mainland, bolstering the economic growth of the region.
Myth 6: Offshore companies are only for tax evasions
Offshore companies are legal entities that are non-resident companies registered with UAE Free Zones. Three Free Zones Authorities offer Offshore Company Formation in UAE and they are Jebel Ali Free Zone (Dubai), RAKICC (Ras Al Khaimah), and Ajman Offshore. Offshore companies are registered mainly for driving international business operations.
One of the key benefits of setting up an offshore company is the potential for tax savings. Offshore companies are particularly advantageous for remote work operations and as holding companies to consolidate the wealth of a business group.
In summary, establishing a company in Dubai, UAE is a seamless process, especially with the support of Pro Consultancy. Foreign investors can effortlessly establish their business in UAE, gaining a strong international presence and fostering growth with minimal investment in Dubai. UAE offers a conducive environment for businesses and investors to thrive, providing opportunities to work, live, and settle peacefully and profitably for the long term.
For more information on Company Formation in Dubai, UAE, don’t hesitate to reach out to our expert Business Consultants!