A complete guide to Starting a Business in Dubai as a Foreigner or Non-Resident

The world’s most sought-after destination for entrepreneurs is now Dubai, a thriving metropolis. An increasing number of foreign businesspeople and investors visit this dynamic emirate every year in an attempt to take advantage of its conducive business climate. Notably, new initiatives like the long-term visa program, which allows for longer stays and even retirement, have made it even more attractive for foreigners to settle down in the UAE.

Furthermore, the appeal of establishing a business in Dubai goes beyond residency; non-residents may also start companies with ease and, with the correct assistance, manage operations remotely from any location in the world. Explore this guide to learn the necessary actions for a foreigner to launch a business in Dubai.

Are Non-Residents Allowed to Establish Businesses in Dubai?

Dubai allows foreigners to invest and start their business in their country. In fact they have created an encouraging environment for investments. They have implemented several government policies to attract and retain the FDIs (foreign direct investments). Dubai’s Department of Economic Development (DED) made clear in January 2023 that they would be making it easier for non-residents to get business licenses. They brought new procedures specially designed to facilitate the NRI to start businesses in Dubai and to attract more foreign investment to the emirate. 

In April 2023, the government announced to waiver of the compulsory local sponsorship prerequisite for non-residents initiating businesses in specific sectors. This business sector is exempted from the acquiring local sponsorship requirement, even if it belongs to the health, technology or media sector. 

Starting a business in Dubai as a foreigner

As a foreigner in Dubai, your initial step should be to know about the common practices and customs followed by the local businesses. You can learn it in no time by hiring a business set-up consultation company. They are well versed with local rules and regulations and expedite the process smoothly leveraging their experience. Plus, they are always there to guide you on the right path and support you throughout your journey. 

Develop a Business Plan

Company formation consultants in Dubai start with a crucial document that serves the main purposes of the business, securing funding and creating a roadmap for your growth. A clearly made plan shows the viability of your venture and increases your chances of securing financial support. And, it also acts as a way to the development and growth of the company.

By outlining your goals and strategies you can track your progress, identify potential roadblocks, and make informed decisions. After it, detail your marketing mix (4Ps): Product, Price, Promotion, and Place (distribution channels). Then, explain how you plan to reach your target audience through various marketing channels (online, offline, etc.). Also, don’t forget to specify your budget allocation for marketing activities.

Obtain Your Business License

The documents and approvals you’ll need for your license will depend on your jurisdiction. However, here we have highlighted some general requirements applied across the board:

• Completed Application Form: This official form, typically obtained from the relevant government department, needs to be filled out accurately and comprehensively. Ensure you have all the necessary information readily available before starting the application process.

• Passport Copies and Legal Documents: Provide copies of your passport (and those of your partners, if applicable) along with any other required legal documents, such as visas and residency permits. These documents must be valid and clear.

• Business Plan: Your well-developed business plan, as outlined in the previous section, serves as a roadmap for your business and demonstrates its viability to the licensing authorities.

• Local Sponsor (Mainland Only): If you choose to establish your business on the Dubai mainland, you’ll likely need a local sponsor in most cases. This sponsor can be a UAE national or a company wholly owned by UAE nationals. The sponsor acts as your legal representative and holds a specific ownership stake in your company (as per regulations). There are exceptions for specific sectors on the mainland that allow for 100% foreign ownership.

Additional Requirements (May Apply):

1. No Objection Certificate (NOC): If you’re already employed in Dubai, you might need an NOC from your current employer to proceed with your business setup.

2. Security Deposit: Some licensing authorities may require a security deposit, refundable upon cancellation or closure of your business.

3. Specific Industry Approvals: Certain business activities may require additional approvals from specific government departments related to health, safety, or environmental regulations.

Government Departments and Fees:

It is important to Identify the relevant government department responsible for issuing your business license. Here’s how you can do it: 

1. Free Zones: Each Free Zone has its own dedicated authority that manages business licensing within its jurisdiction. Contact the specific Free Zone authority for detailed information on their requirements, fees, and application process.

2. Mainland: The Department of Economic Development (DED) is the primary authority responsible for issuing business licenses on the Dubai mainland. They offer a streamlined online application system and have designated service centres to assist with the process.

Fees Associated with Obtaining a License

1. License Fee: The government charges a license fee that varies depending on your chosen business activity, legal structure, and location (Free Zone or Mainland).

2. Administrative Fees: Additional processing and administrative fees may apply during the application process.

3. Visa Fees: If you require visas for yourself or your employees, you’ll need to factor in the associated visa application and processing fees.

End Note

It’s highly recommended to consult with a business setup specialist in Dubai. They can guide you through the intricacies of the licensing process, ensure you meet all the requirements, and help navigate any potential complexities. With their assistance, you can obtain your business license efficiently and confidently, paving the way for your successful business launch in Dubai. Usually, they offer various Dubai company setup packages, you can get customizable services depending on your needs.