Legal Basics For Startup And Small Business Setup In Uae

Yes, it takes a just about a week to start your get your small business or startup registered in the UAE, as long as you have followed all legal procedures that are necessary to get your business up and running.

Carefully follow these steps and you will be awarded your business license by the end of all the procedures:

1. Choose type of business: The license you require will depend on the type of business you plan to set-up. These licenses can either be commercial, professional or industrial and will largely characterize the line of your operation. Department of Economic Development (DED) lists out nearly 2100 activities to choose from. However, certain lines of businesses like jewellery, veterinary services, legal consulting and food trading require additional approvals from governmental bodies. It is also important to note that each Free Zone has its own set of rules and regulation for approvals

2. Choose legal form: Legal form implies the kind of business you intend to set up in Dubai; not a form that you need to complete. You need to take into consideration the type of business, activity and the number of owners and their nationality along with ownership formats. Companies in the UAE can take on various legal forms but there are some restrictions for certain businesses. You can read up in detail on the DED website.

3. Choose the name of your company: Your trade name is part of the legal procedure to setup a company in UAE. It should convey the nature of your business unless it’s a branch of another company. Read up all the rules and regulation about trade names on the official DED website.

4. Apply for the Initial Approval Certificate: An Initial Approval Certificate issued by the DED confirms that the Dubai DED does not have any objections with your business set-up and paves way to go through the next steps to get a business license.

You can apply through:

  • eServices – a user account is required to access eServices
  • Download the Business in Dubai App (iOS, Android)
  • Service centers
  • Happiness Lounge
  • Law firms

5. Prepare a Memorandum and LSA agreement: The legal form of your company will determine if you need to formulate and sign the Memorandum of Association (MOA). For local businesses, you will also need to sign a Local Service Agent (LSA) / Corporate Agent agreement with a UAE citizen who will represent your business for licenses and compliances.

Memorandum of Association is needed if the legal form of your business is:

  • Limited Liability Company
  • One Person Company
  • Private Shareholding Company (Private Joint Stock Co)
  • Public Shareholding Company
  • Simple Limited Partnership
  • Partnership Company
  • Civil Company

You will need to approach a legal consultancy or DED Legal Affairs or Notary Public to draft the MOA. If you intend to register a branch of your existing company, the existing MOA needs to be presented. However, you will not need a MOA if you are a Sole Establishment or Intelaq license holder

6. Select the location: Choosing the location to set-up your business in crucial. You need to choose the area as per your business type. Free Zones allow you to startup your business without a local partnership, with 100% ownership of your business. However it is absolutely essential that you study and understand the prerequisite and available office spaces within a Free Zone. Businesses like shops and restaurants cannot go this route as they need access to markets to bring in customers.

7. Get Licensing Approvals:
Certain business set-ups require special licenses from various governmental bodies. Businesses that come under DED control do not need any additional licensing but you can check if your company set-up falls under this purview. A hospital requires a DED approval along with a license from the Dubai Health Authority.

8. Collect Business License: Once you submit all your documents through the following agencies, you have completed the steps needed to your business license.
Application Channels Legal forms
DED eServices – an online user account should be available All legal forms

Service Centers
As per services offered in each center
Happiness Lounge
All legal forms

You will receive a transaction voucher with a reference number which needs to be quoted while making the payment at various approved channels. Please do note that you need to make the payment within 30 days of receiving the payment voucher. The transaction will stand annulled if the amount is not paid at the end of 6 months.

For foreign investors, it is best to approach a uae company formation expert to take you through all these legal basics of setting a company in the UAE. They smoothen out the rough patches and help you in dealing with government buecracy. Company registration experts can also help in planning and executing your every move to make sure that your business is set-up legally without any issues at the end of the day.

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