4 Basic Steps for LLC Company Formation in Dubai

Author: Hend Galal

Dubai has been widely known and acknowledged as one of the most significant trading hubs for businesses of all kinds, thanks to its zero tax benefits. Also, the Department of Economic Development (DED) actively seeks to bring in more investments from entrepreneurs by easing the process of Company Formation in Dubai Mainland and Free Zones. Nonetheless, starting a new company in Dubai or any other part of the UAE is a huge step requiring many undertakings and a set of responsibilities. To make the process understanding easier for you, we have outlined the basic steps for your LLC Company Formation in Dubai below:

Step 1: Identifying Business Activity Type:

As a preliminary step, you must decide what kind of business activity you wish to pursue. It will ultimately translate into the type of business trade license (Mainland or Free Zone) you’ll need for your LLC Company Formation in Dubai. So, make sure your business activities align with those stated in the official list of around 200 business activities provided by the DED. These enlisted activities cover every type of activity one can think of, covering industrial, commercial, professional and tourism sectors.

One limitation of Free zones is that some only allow a certain set of activities like media, transport, medicine, etc. However, having more than one business activity is feasible under one trade license. So, you don’t need to worry and can opt for more than one activity without trouble.

But, before anything, else having your business activities approved from DED, in some cases the UAE government, is imperative for you to proceed with your Business Setup in Dubai.

Step 2: Choosing Unique Company Name:

When your business activity and trade license procedure get clear, subsequently, you must pick a trading name for your company. You must make sure it conforms to the naming conventions set by the DED or legal authorities of the Free Zone. Although it seems like a simple step, getting assistance for the legal aspects of this procedure is recommended to avoid unnecessary concerns.

You don’t want to use names or terms that could be offensive, include blasphemous language, or carry abbreviations instead of the complete names of the company’s owner or business partner. Also, using the already developed business names functioning well in their field is not a good idea. Business setup services by professionals like the Corporate Business Services (CBS) can guide you in choosing your company name so that you can file it for registration without any legal complications or delays.

Step 3: License Application:

The type of business activities you choose will define the type of business license you’ll need to start your business operations in the UAE. The three major categories of licensing include:

  • Industrial License: For businesses that engage in manufacturing or industrial activities
  • Commercial License: For business activities that involve buying and selling goods
  • Professional License: For professional services

    • Either you decide to operate in Mainland or Free Zone, you must provide the following documentation when applying for your Company Formation in Dubai:

  • License application form
  • Passport copies of owners or all partners involved
  • Two passports sized coloured photographs of the owners

    • After license approval and documentation submissions are done, DED issues a payment voucher to the business owner(s), and then an official trade license is given to the respective party. Once this step is completed, you are set to start your business operations in the UAE market.

    Step 4: Visa Application and Processing:

    Once you complete licensing procedure, you’ll need to start the process of visa application. It includes your staff’s as well as your own visa. As a company license owner, you’ll have the leverage of sponsoring a visa for others, including your family members or domestic workers. However, the number of visa applications is limited to the size and setup type of your business. Also, the limit of the sponsoring visas relies on your personal earnings.

    Summing up, when setting up a business, all legal documentation must be complete and steer clear of any errors. It is a simple process for people who have prior experience and in-depth knowledge of the local market. However, new investors may find this process of Company Formation in Dubai very intimidating without proper guidance or support. We recommend that whatsoever trade license and business activities you choose to pursue, getting help from the business setup consultants such as the Corporate Business Services is always a safer option for a quicker and smoother company formation process.