Setting up a business in the United Arab Emirates (UAE) is an enticing prospect, given its favorable business environment and strategic location. However, one of the initial and critical steps in this journey is obtaining the right business license. This information provides valuable insights into the key aspects you need to understand about business setup UAE.

Types of business licenses:

UAE offers a variety of business licenses, each tailored to different types of business activities. These can include commercial, professional, industrial, and agricultural licenses. Selecting the appropriate license is the first crucial decision.

Location matters:

The location of your business will have a substantial impact on the licensing process. Depending on whether you choose to establish your business on the mainland or in a free zone, you’ll be subject to different regulations and licensing procedures.

You may need a local Emirati sponsor or partner:

In mainland business setups, you may need a local Emirati sponsor or partner. In many cases, the local sponsor holds a minority share of the business, while the foreign investor retains the majority. Understanding the role and obligations of the local sponsor is crucial.

License fees and costs:

Obtaining a business license in the UAE involves various fees, including application fees, registration fees, and annual renewal fees. These costs can vary depending on the type of business, legal structure, and location.

Activity and trade name approval:

UAE government regulates business activities through a specific list of approved activities. Your business activity should align with this list. Additionally, you’ll need to choose a trade name that adheres to the UAE’s naming conventions and is not already in use.

Licensing authorities:

UAE is divided into multiple Emirates, each with its licensing authorities. Dubai, for instance, has the Department of Economic Development (DED), while free zones have their own authorities. Understanding the relevant authority for your location is vital for a smooth licensing process.

Visa requirements:

If you plan to hire employees, partners, or investors from abroad, you’ll need to consider visa requirements and associated costs. Business licenses can often be linked to visa quotas, affecting the number of visas you can sponsor.