• How to start a business in a Dubai free zone

    18 Jul 2022

    So, you want to start a business in a Dubai free zone – but how?

    First things first, you need to decide on the type of business you wish to run. Will you set up as a freelancer? Or set up a free zone company and employ others?

    Setting up as a freelancer can be a cheaper option; however, not all of Dubai’s free zones issue freelance permits, so you are slightly restricted in your choices. Meanwhile, for the free zone company option, there’s plenty of choice with both sector-specific and all-encompassing zones on offer.

    If you think opening your company in a free zone is the best option for you, here’s how to get started.

    1. Choose a business activity (or activities)

    The first step in getting your Dubai free zone business set up is deciding on the business activities you wish to carry out, as this will impact where you can register your company. The type of licence you apply for will also depend on the activities you wish to carry out – such as professional services, commercial, trading, etc.

    What to do next?

    While outlining every activity you wish to undertake may seem daunting, keep in mind that there is no need to limit yourself too much here – many Dubai free zones allow for multiple business activities under one licence.

    Dubai does have some rather particular requirements about what activities are permitted under what licence, though, so the best advice is to work with a company formation specialist at this stage to ensure a smooth process.

    2. Find a free zone

    Once you’ve decided on your business activities, the next step is determining which free zone is right for you.

    What to do next?

    There are several factors you must consider when making this decision – starting with whether you wish to set up in a sector-specific free zone. Healthcare, ICT, production, design, outsourcing, media, maritime, science and finance are just some of the industries catered to by Dubai’s industry-specific free zones.

    Alternatively, there are also many broader free zone options available. For example, free zones such as Dubai South and DMCC are open to a wide range of activities.

    You also need to consider the location of your chosen free zone. As well as taking into account considerations such as access to main highways, if you rely on international trade or travel you should also be mindful of proximity to both ports and airports.

    3. Choose a company name

    Deciding on a name for your business is difficult no matter where in the world you choose to set up.

    There are plenty of factors to consider, from the emotional to the practical. Does your name evoke an emotional response, for example? And if so, what does it say? Reliable? High class? In addition, here in the UAE, there are other naming conventions to consider.

    What to do next?

    When choosing your UAE company name, the first step is to ensure your business name is available to be registered – a company setup specialist can easily check this for you. There are also certain standards that the name must adhere to, including avoiding any blasphemous language or references to religious or political organisations.

    Finally, if you decide to name your business after a person, there are more considerations: That person must be a partner and shareholder in your business, and only full personal names are permitted rather than initials or abbreviations.

    4. Make your license application

    Now that you’ve decided what you’re planning to do, where you wish to do it and under which name you’ll trade, it’s time to make your Dubai free zone company formation official by submitting your application.

    What to do next?

    The exact documents required for Dubai free zone company formation will depend on the type of licence you are applying for and which free zone you have selected. As a general rule of thumb, you can expect to be asked for some or all of the following:

    • Colour copy of shareholder(s) passport and visa if applicable
    • Application form
    • Business plan
    • Board resolution
    • Memorandum and articles of association

    When setting up as a freelancer, you may also be required to provide proof of invoices or work orders.

    5. Applying for visas

    You can also start your visa application at this stage. You can apply for your own visa as well as those of your employees and any domestic staff you may have.

    What to do next?

    Whether applying for your own visa or sponsoring someone else’s, the process is the same: entry permit, status adjustment, medical fitness test, then Emirates ID registration and visa stamping.

    Once again, a company formation specialist can guide you through this stage.

    6. Opening your corporate bank account

    You will, of course, need a bank account in order to trade. Opening a corporate bank account in the UAE is not always easy and there are several considerations to keep in mind – not least each bank’s eligibility criteria.

    What to do next?

    Firstly, you’ll need to make sure you have the correct documentation in place. As well as your business licence, you’re likely to need:

    • A corporate account opening form
    • A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account
    • A copy of your company’s certificate of incorporation
    • A copy of your share certificates
    • A copy of the company’s memorandum and articles of association
    • Copies of passports for all partners in the company

    Next, you’ll need to choose a financial institution. A company formation specialist can help here, and advise you on the best bank to suit your specific needs.

    Dubai free zone company formation made easy

    And that’s it. It really is that simple. Just six steps to get your Dubai free zone business set up. Of course, just like any business decision, there are potential pitfalls along the way. But provided you go in with your eyes open and seek out the right guidance and advice, in most cases, you’ll have your business set up in just a matter of weeks.