Start a Business in UAE as a Foreigner or Non-Resident

Everything You Need to Know About How to Start a Business in UAE in 2024

The United Arab Emirates (UAE) has become a global business hub, attracting entrepreneurs and investors from around the world. The country’s stable economy, strategic location connecting Asia, Europe, and Africa, and business-friendly environment make it an ideal destination for foreigners and non-residents looking to establish a successful enterprise. In addition, the UAE government offers various incentives and support mechanisms to encourage foreign investment and promote economic diversification, further enhancing the appeal of starting a business in the UAE.

Starting a business in the UAE is simpler than you might think. In all seven emirates, the process involves straightforward steps that you, as a foreigner or non-resident, can easily navigate. Whether you decide to visit the Department of Economic Development in person or use digital platforms for a speedy online application, the options cater to your convenience. Even better, there are specialized companies, business setup consultants, and legal offices ready to assist you throughout the setup process. All it takes is picking your location, defining your business, and paying the necessary fees to obtain your commercial license.

Eligibility for and Non-Residents to Establish Businesses in UAE

Understanding the regulations and permissions for non-residents to start a business in the UAE is crucial for successful market entry. The UAE government welcomes foreign investment and has implemented policies that enable foreigners and non-residents to establish businesses in the country.

However, there are specific requirements and restrictions that foreign investors should be aware of, such as the need for a local sponsor or partner in certain business structures and sectors.

One common misconception is that foreigners cannot own 100% of their businesses in the UAE. While this is true for mainland companies, where a local sponsor or partner is required to hold at least 51% ownership, there are alternatives for full foreign ownership.

Free zones offer 100% foreign ownership, allowing non-residents to establish and control their businesses without the need for a local sponsor or partner. Additionally, recent changes to the UAE Commercial Companies Law allow full 100% foreign ownership in certain sectors outside of free zones, further expanding opportunities for foreign investors.

Another concern that non-residents may have is the complexity of navigating the local business landscape and dealing with government regulations. This is where partnering with a trusted business setup service provider, such as Novus, can be invaluable. With expertise and experience in the UAE market, they can guide foreign investors through the process, ensuring compliance with all necessary regulations and providing tailored solutions for each client’s unique needs.

Benefits of Starting a Business in UAE as a Foreigner

Setting up a business in the UAE offers numerous advantages for foreigners and non-residents, making it an attractive destination for investment and entrepreneurial ventures.

One of the most significant benefits is the country’s tax system, which provides various tax incentives for businesses, such as low corporate tax rates, customs duty exemptions, no personal income tax, and exemptions from customs duties in free zones.

Another advantage is the UAE’s strategic location, which serves as a gateway between Asia, Europe, and Africa, allowing businesses to access a vast market with ease. This positioning has led to the development of world-class infrastructure, including state-of-the-art transportation and communication networks, making it easier for businesses to operate efficiently in the region.

Furthermore, the UAE’s robust and diversified economy offers numerous opportunities for growth across various sectors, such as tourism, real estate, retail, and renewable energy. This economic stability, coupled with a supportive regulatory environment, encourages business development and fosters a competitive market.

Beyond these advantages, the UAE government actively supports foreign investors by offering a range of incentives and opportunities, such as streamlined business registration processes, simplified visa procedures for entrepreneurs and their families, and access to government-backed financing and support programs. These initiatives demonstrate the UAE’s commitment to fostering a business-friendly environment and promoting economic growth.

In Short, As a foreigner in the UAE, you’re not just starting a business, you’re joining a thriving ecosystem built for your success.

•  100% control in Free Zones, no need for local partners to hold your hand. Your vision, your success.
•  Keep profits intact with zero corporate and personal taxes, and bid farewell to import/export duties.
• From Asia to Africa and beyond, the UAE opens doors to diverse markets, putting the world at your fingertips
• Cutting-edge offices, advanced technology, and robust logistics become your allies, not obstacles.
• Attract the best and brightest from a global pool of skilled professionals.
• Invest, stay, and thrive with long-term residency for you and your family.
• Build your future in a safe and secure environment with a strong legal framework.

Types of Business Licenses Available for Foreigner

When it comes to starting a business in the UAE as a foreigner, understanding the different types of business licenses available is crucial for ensuring compliance with local regulations.

Three main types of licenses cater to various business activities: trading, professional, and industrial licenses.

Trading License

Trading licenses are required for businesses involved in buying, selling, or trading goods, whether it be wholesale or retail. This type of license is suitable for companies engaged in import and export activities, distribution, and general trading.

Professional License

A professional license is granted to businesses offering professional services, such as consultancy, legal services, or educational services. This type of license allows skilled professionals and experts to provide their services and operate within the UAE market.

Industrial License

Industrial licenses are issued to businesses involved in manufacturing, processing, or assembly of goods. Companies operating in sectors such as construction, food production, or chemical processing typically require an industrial license to operate in the UAE.

For each type of license, specific requirements and application processes must be followed to ensure compliance with local regulations. These procedures may include submitting relevant documentation, obtaining approvals from relevant authorities, and meeting specific criteria depending on the business activity.

Partnering with a professional business setup service provider like Novus can simplify this process, ensuring that all requirements are met and helping foreign investors navigate the complexities of the UAE business landscape.

Company Formation Options in UAE for Foreigners

Foreign investors have various options when it comes to setting up a business in the UAE. Each option offers unique advantages, requirements, and processes. Understanding these options can help investors make informed decisions and select the most suitable setup for their business needs.

Mainland Company

A mainland company is established in the UAE’s mainland, operating under the jurisdiction of the Department of Economic Development (DED). These companies can conduct business throughout the UAE and are not restricted to specific zones. The main advantage of a mainland company is its ability to trade freely within the local market, preferential VAT treatment, and with other countries.

However, setting up a mainland company requires a local sponsor or partner who must hold at least 51% ownership, with the remaining 49% owned by the foreign investor. The process for setting up a mainland company includes obtaining a trade license, registering the company, and fulfilling all relevant requirements set by the DED and other government authorities.

Free Zone Company

Free zones are designated areas within the UAE that offer 100% foreign ownership, allowing non-residents to establish and control their businesses without the need for a local sponsor or partner.

Free zones offer various benefits, such as tax exemptions, simplified registration processes, and access to world-class infrastructure. Each free zone caters to specific industries, and businesses operating within these zones must align with the activities permitted by the respective free zone authority.

The process for setting up a free zone company involves selecting the appropriate free zone, obtaining a business license, and fulfilling the requirements set by the free zone authority.

Offshore Company

Offshore companies are registered in the UAE but operate outside the country. These companies offer several advantages, such as tax benefits, asset protection, and confidentiality. Offshore companies are ideal for investors looking to establish a holding company or conduct international business activities without a physical presence in the UAE. The process for setting up an offshore company includes registering with the relevant offshore authority, obtaining the necessary approvals, and fulfilling the requirements set by the authority.

Choosing the right company setup option is crucial for achieving success in the UAE market. Partnering with a professional business setup service provider like Novus can guide foreign investors through these options and help them navigate the complexities of the UAE business landscape.

Documents Required to Start a Business in UAE as a Foreigner

When setting up a business in the UAE as a foreigner or non-resident, it is essential to prepare and submit the necessary documents for company registration and licensing. These documents may vary depending on the type of business, the chosen company setup option, and the specific requirements of the relevant authorities. Some common documents required for starting a business in the UAE include:

• Passport copies of the shareholders and directors
• Proof of residency or visa status
• Business plan outlining the company’s objectives and activities
• Trade name reservation certificate
• Memorandum and Articles of Association for the company
• Approvals from relevant government authorities, depending on the business activity

In addition to submitting the required documents, it is essential to ensure that they are properly authenticated and, if needed, translated into Arabic. This process may involve obtaining attestations from the relevant authorities in the investor’s home country, such as the Ministry of Foreign Affairs, and the UAE embassy or consulate. Documents may also need to be notarized by a public notary in the UAE and translated by a legal translator registered with the UAE Ministry of Justice.

Preparing and submitting the necessary documentation can be a complex and time-consuming process. Partnering with a professional business setup service provider like Novus can provide valuable guidance and support, ensuring that all documents are correctly prepared, authenticated, and submitted to the relevant authorities, streamlining the process, and increasing the chances of a successful business setup in the UAE.

Things to Consider as a Foreigner Before Starting a Business in UAE

Embarking on a business venture in the UAE as a foreigner or non-resident requires careful planning and consideration of several factors that can impact the success and growth of the enterprise. This includes evaluating the market and competition, as well as understanding the legal and cultural aspects of doing business in the country.

Evaluating the Market and Competition

Before starting a business in the UAE, it is vital to conduct thorough market research and analyze the competition. This involves identifying the target audience, understanding their needs and preferences, and evaluating the level of demand for the proposed product or service.

Additionally, assessing the competition helps to identify potential gaps in the market, differentiate the business offering, and develop a competitive advantage. This process may also reveal crucial insights into the local business landscape, such as industry trends, regulatory requirements, and potential challenges, enabling foreign investors to make informed decisions and develop a viable business strategy.

Understanding the Legal and Cultural Aspects of Doing Business in UAE

Foreign investors must also consider the legal and cultural aspects of doing business in the UAE. This includes understanding the regulatory framework governing business operations, such as the requirements for company registration, licensing, and compliance with local laws. Familiarizing oneself with the UAE’s legal system can help to avoid potential issues and ensure smooth business operations.

Moreover, understanding the cultural nuances of doing business in the UAE is essential for building strong relationships with local partners, suppliers, and customers. This entails respecting local customs and traditions, observing proper business etiquette, and adapting to the local communication style. Demonstrating cultural awareness and sensitivity can go a long way in establishing trust and credibility with potential clients and partners, ultimately contributing to the success of the business.

Considering these factors and seeking the assistance of a professional business setup service provider can help foreign investors navigate the complexities of the UAE business landscape, ensuring a smooth and successful business setup experience.

Cost of Starting a Business as an Expat in UAE

Setting up a business in the UAE as a foreigner or non-resident involves various expenses that need to be considered for effective financial planning. This section provides a breakdown of the costs associated with establishing a business in the UAE and offers tips on how to minimize costs and manage finances efficiently.

Business Setup Cost Breakdown

Some of the common expenses involved in setting up a business in the UAE include:

• Company registration and licensing fees, which vary depending on the chosen company setup option (mainland, free zone, or offshore) and the type of business license required
• Office rental costs, which may differ based on location, size, and facilities
• Visa fees for the business owner and employees, including application, processing, and renewal charges
• Professional fees for legal, accounting, and consulting services
• Insurance premiums for mandatory coverage, such as workers’ compensation and health insurance
• Operational expenses, including utilities, telecommunications, and maintenance

Tips for Minimizing Costs and Managing Finances

To minimize costs and manage finances effectively while starting a business in the UAE, consider the following tips:

• Research and compare various company setup options to identify the most cost-effective solution that meets your business needs
• Choose an office space that aligns with your budget and operational requirements, considering factors such as location, accessibility, and amenities
• Seek professional advice from a trusted business setup service provider like Novus to guide you through the process and help you avoid potential pitfalls and unexpected expenses
• Keep track of all expenses and develop a realistic budget, considering both short-term and long-term financial requirements
• Explore financing options, such as loans, grants, or investment partnerships, to support your business setup and growth

By considering these expenses and following the tips provided, foreign investors can establish a successful business in the UAE while effectively managing their finances.

Obtaining a Business Visa and Residency in UAE

For foreign entrepreneurs, obtaining a business visa and residency is an essential step. This process not only ensures legal compliance but also provides added benefits, such as ease of travel, access to local services, and the ability to sponsor family members for residency.

Business Visa Process and Requirements

The process for obtaining a business visa in the UAE involves several steps, including submitting an application, providing the required documentation, and fulfilling specific criteria. Some of the primary requirements for a business visa include:

• Valid passport with at least six months of validity
• Proof of business ownership or shareholding in the UAE company
• Clearance from the relevant authorities, such as the Department of Economic Development (DED) or free zone authority
• Health insurance coverage
• Payment of the applicable visa fees

Once the business visa is approved, the applicant may be required to undergo a medical examination and obtain a UAE Emirates ID card, which serves as a national identification card and provides access to various government services.

Options for Obtaining Residency in UAE

There are several options for obtaining residency in the UAE for business owners and their families. One of the most common methods is through the investor visa, which is granted to foreign entrepreneurs who have invested in a UAE company. This visa allows the investor and their family members to reside in the UAE for a specific period, usually two to three years, with the possibility of renewal.

Another option for obtaining residency is through the UAE Golden Visa program, which provides long-term residency for investors, entrepreneurs, and professionals who meet specific eligibility criteria. This program offers a range of benefits, such as a 10-year renewable residency visa, the ability to sponsor family members, and exemption from the requirement to have a local sponsor or partner in the business.

Regardless of the chosen residency option, it is crucial to ensure compliance with the UAE’s immigration laws and regulations. Partnering with professional business setup consultants can offer valuable guidance and support in navigating the complexities of the visa and residency process, ensuring a smooth and hassle-free experience for foreign investors and their families.

How Novus Can Help You Start a Business in UAE as a Foreigner or Non-Resident

Embarking on a business venture in the UAE as a foreigner or non-resident can be a complex and challenging process, especially when navigating the local business landscape and regulatory requirements. Partnering with Novus can make a significant difference in ensuring a smooth and successful setup experience.

Comprehensive Services Offered by Novus

Novus offers a wide range of services tailored to the unique needs of foreign investors and entrepreneurs looking to establish a business in the UAE. These services include:

• Company registration and licensing support in mainland, free zone, and offshore locations
• Assistance with document preparation, authentication, and submission
• Guidance on obtaining business visas and residency for entrepreneurs and their families
• Accounting and tax services, including VAT consultancy and corporate tax support
• Operational services, such as IT solutions, legal services, and audit support
• Support services, including PRO services, Golden Visa UAE assistance, and will preparation

Expertise in the UAE Business Landscape

Novus’s team of experts has extensive experience in helping clients navigate the complexities of the UAE business landscape. Their in-depth knowledge of local regulations, market trends, and cultural nuances ensures that clients receive tailored solutions and support, designed to maximize the chances of success for their businesses.

Whether it’s selecting the most suitable company setup option, obtaining the required licenses and approvals, or ensuring compliance with local laws, Novus’s expertise and guidance can provide invaluable support throughout the entire process.

Contact Novus for Tailored Solutions and Support

If you’re considering starting a business in the UAE as a foreigner or non-resident, don’t hesitate to reach out to Novus for professional guidance and support. Our team of experts is committed to simplifying the complexities of business setup and ensuring unparalleled success for their clients. Contact Novus to learn more about their comprehensive range of services and how they can help you achieve your business goals in the UAE.

Empower Your UAE Business Journey

Starting a business in the UAE as a foreigner or non-resident presents numerous benefits and opportunities, including a supportive business environment, strategic location, and various incentives. Navigating the local business landscape and regulatory requirements can be complex, but partnering with a trusted service provider like Novus can simplify the process.

Novus offers tailored solutions and support in various areas, including business setup options, accounting and tax services, and visa assistance. Embark on your successful UAE business journey with Novus by visiting their website at novuscsp.com or contact them directly to learn more about their comprehensive range of services.