The UAE has been able to gain the confidence of investors and those interested in starting their businesses from all over the world, thanks to its factors of attraction including the political, social, and economic stability, the highly developed legislative and institutional system, and infrastructure and the incentives and benefits it continues to provide to investors.
The UAE has been able to gain the confidence of investors and those interested in starting their businesses from all over the world, thanks to its factors of attraction including the political, social, and economic stability, the highly developed legislative and institutional system, and infrastructure and the incentives and benefits it continues to provide to investors. All this has rendered the UAE an attractive destination for investors from everywhere.
The UAE ranks 25th among the most competitive economies worldwide, according to the Global Competitiveness Report 2019 (English version), and 1st in the Middle East region. It is striving to strengthen this position by diversifying its sources of national income.
Distinguished for its vibrant, prosperous economic business environment that attracts foreign direct investment, the UAE is one of the world’s most successful countries in attracting foreign investments and has modern and distinctive infrastructures. It also adopts an effective economic policy and has enacted modern economic legislation.
On the other hand, the UAE is a strategic commercial center that offers foreign investors the opportunity to enter the regional markets as well as the freedom to transfer money and profits. Also, it has effective legal systems and legislation, impartial courts and laws, and legislation to protect foreign capital.
Civil companies and establishments wholly owned by non-GCC residents require an Emirati local service agent. This is done under a service agent contract attested by the notary public or court.
(You can view and download the ‘Foreign Direct Investment Decree-Law’ file) Through this content, we will provide a detailed analysis of the types of investment, legal requirements, and all that is needed to start a business in the UAE in addition to the available investment opportunities.
Starting businesses in the UAE the regular way:
Starting any business in the UAE passes through a series of steps that include the following:
Determining the nature of the activity
Determining the legal form
Registering the trade name
Request for initial approval
Memorandum of association and local service agent agreement
Choosing the location or address of the business
Obtaining the additional government approvals
Submitting the documents and paying the fees
‘Bashr’ for doing business
The ‘Bashr’ for doing business is a service provided by the federal government. It is an integrated service that enables investors to start their businesses in the UAE electronically through a unified online platform. This platform is connected with the federal and local government entities concerned with licensing economic activities within a few minutes, using an easy, fast and secure procedure without the need for investors to visit any government entity. Read more about ‘Bashr’ service.
In Abu Dhabi, the Abu Dhabi Business Center provides an ‘Instant Licence’ service, which enables investors to start their businesses online and get a commercial license instantly without the need to visit the service centers. For more information: https://u.ae/en/information-and-services/business/steps-to-start-a-business-on-the-mainland
A business visa is part of the Golden Residency System, under which entrepreneurs can obtain a permanent residence and unprecedented advantages for themselves and their families, thereby promoting the environment that attracts growing and successful businesses. Entrepreneurs with entrepreneurship experience from all over the world can apply for a business visa. Any entrepreneur who has previously started a business can apply for a visa to set up a business in the UAE.
To obtain a business visa, an entrepreneur must meet the following conditions:
He must be able to demonstrate his experience as an entrepreneur
He must be a major shareholder or a board member
He must be ready to live in the UAE and start a business in one of the emirates legally
He must have a business idea or a business plan that he wants to create in the country
Free zones are one of the most important strengths of the UAE economy
As one of the most important strengths of the UAE economy, free zones offer 100 percent tax exemptions and have no restrictions on trade exchange. Also, they experience low inflation rates and can easily obtain financing from international banks.
Steps to start a business in free zones
Determining the type of activity is the first step to obtain a business license. Through the activity, the parties associated with this activity and the permitted legal forms are identified.
Free zone facilities in the UAE belong legally to one of the following two types:
Free Zone limited liability Company
Free zone establishment
The two types differ in terms of the number of shareholders and the nature of each shareholder, whether he is a natural or legal person. Not all free zones are obligated to register these two types of facilities.
There are more than 40 free zones across the UAE, which allow 100 percent foreign ownership for local investment. The departments of economic development across the UAE also allow investors full ownership (100 percent) for investing in 122 activities and 13 economic sectors.
Obtaining initial approvals, registering the activity, and obtaining the license
Establishments set up in free zones are subject to the laws and regulations governing each specific free zone authority.
To be able to obtain the necessary approvals, you must apply for the necessary documents. The list of documents varies according to the type of activity and requirements of the free zone authority.
The legislative system that supports investment in the UAE
Rules and regulations in the UAE are divided into various sections:
Federal rules and regulations where their provisions apply to the state as a whole and local rules and regulations, which are typical to one emirate and not the other. Rules and regulations are also divided in terms of jurisdiction into general laws such as the Anti-commercial concealment law; Anti-money laundering law; penal code; and commercial register law. There are also laws for regulating work in a specific sector such as the commercial companies law and the industry regulatory law etc.
Ministerial resolutions and executive regulations governing the set of issued laws. Such resolutions are issued to provide a detailed explanation of the provisions of laws.
Agreements concluded with other countries such as the double taxation avoidance agreements and investment promotion and protection agreements.
Legal forms of companies
Companies take one of the following legal forms:
Civil works company
One person company
Limited liability company
Public joint-stock company
Joint liability company
Private joint-stock company