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An Easy Guide to Legal Requirements For A Business Setup

Sept. 7, 2020


Starting a business in Dubai has never been easier. Dubai is one of the many cities in the world where business start ups, investments, and trade have always been encouraged, and this is one of the major reasons for the huge expat population residing in the city. 

Dubai is immensely accommodating in terms of start ups and innovative business ideas. Infact, the recent market trends in Dubai suggest that there are plenty of opportunities for foreign investors to get involved in different kinds of business enterprises. The city has a rich tourist population creating a need for international setups and organizations as there is an unlimited number of potential clients and customers. However, even though Dubai is a convenient spot to start your business, the labour laws in the city ensure that customers and business personnel are equally protected. Hence, acquainting yourself with the laws and taking the help of a legal consultant should be the first step towards building your business. 


Legal Requirements Explained 


To best understand the legal requirements of a business setup in the UAE, it is highly recommended to take the help of a lawyer who can best explain what goes into starting a business. In addition, you also need to look out for some of the common legal concerns. These include:

Licensing: The business you are looking to set up will determine the license you need to acquire. Some of the available license types are commercial, professional, and industrial licenses. At the same time, it is also crucial to understand that certain activities such as food trading, jewellery trading, veterinary activities, and legal consultancy require further approval from other governmental departments.


Sponsorship and Ownership: Foreigners have the option to own their businesses entirely by opting for a license and location in one of the many free zones of the UAE. UAE has over 45 free zone areas making it easy to pick the space of your choice. If you are looking to operate locally, you have to get a license from the Department of Economic Development (DED). The DED license comes with certain restrictions on share of ownership for international residents. For DED licenses, it is obligatory to have a local agent, partner or sponsor.


Trade Name: Your trade name is another important component of the legal procedure as the company name should indicate the nature of your business. All the rules regarding trade names can be read on DED’s official website. 


Office Setup: Once all legal procedures and forms are completed, the next step is to narrow down some offices with costs and other details. The benefit of opting for a setup at a free zone is that you will get assistance to find premises suitable for your requirements as well as help with setting up electricity, internet, water, and other amenities.


Employees: In most legal forms of the DED, you will be required to hire a manager to oversee the operations and have them ready to be on board even before the registration is approved. However, there are some cases wherein you may not be allowed to hire at all. Pertaining to the free zones, each zone has its own specific regulations regarding the structure of a business.


Even after thoroughly studying all the legal procedures required to set up your business, it is always best to consult with a law firm  to block out any future troubles.

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