Corporate Establishment in the UAE Mainland – A Guide for Foreign Investors

Setting up a company in the UAE mainland offers numerous opportunities for investors. We discuss key corporate establishment procedures, options for streamlined bureaucracy, and approvals required.

By Arendse Huld

Setting up a business in the United Arab Emirates (UAE) mainland offers numerous opportunities for investors due to its strategic location, diverse economy, and investor-friendly policies. Whether you’re planning to establish a small enterprise or a large corporation, understanding the registration process is crucial.

This article provides a comprehensive guide on the various channels and steps involved in registering a business in the UAE mainland, ensuring you are well-prepared to navigate the regulatory landscape.

Channels for registering a business in the UAE

Investors can apply to register a business in person through a government services office or online through the electronic Basher platform.

Alternatively, investors can also apply online through the Department of Economic Development (DED) website of the emirate or municipality in which they are establishing their company. The websites are as follows:

• Department of Economic Development in Abu Dhabi
• Department of Economic Development in Dubai
• Department of Economic Development in Sharjah
• Department of Economic Development in Ajman
• Department of Economic Development in Umm Al Quwain
• Department of Economic Development in Ras Al Khaimah
• Fujairah Municipality

In-person application can be carried out at any of the following locations:

• Government service centers
• Tasheel offices
• Legal services offices
• Customer happiness centers affiliated with the departments of economic development in all emirates of the country

To apply online through the Basher platform or the DED websites, the applicant must have a UAE PASS account, the UAE’s national digital identity and signature mechanism. Investors can apply for a UAE PASS account here.

Steps for registering a business in the UAE mainland

Applying for a business license in the UAE requires several steps that include identifying the type of license needed, registering for a trade name, applying for initial approval, registering for industry licenses, and more.

Note that the order of these steps may vary depending on the emirate in which you are establishing the business. For instance, in Dubai, you can choose a trade name after receiving initial approval from the local authorities.

Below we outline the general step-by-step procedures to obtaining a business license based on the recommendations of the Ministry of Economy (MOEC).

Step 1: Identifying an economic license and business activities.

The UAE currently provides six main types of economic licenses: occupational, tourism, industrial, commercial, agricultural, and professional. These licenses can cover more than one type of business activity and the UAE recognizes over 2,000 types of economic activities.

The economic license must correspond to the chosen economic activity or activities.

Step 2: Choosing a company structure.

The company structure, or legal form of the company, will depend on the selected economic activity.

The types of company legal structures permitted in the UAE are:

• Sole proprietorship
• Branch of a Gulf Cooperation Council (GCC) company
• Branch of a foreign company
• Civil company
• Branch of a local company
• Limited liability company (LLC)
• Holding company
• Public joint-stock company
• Private joint-stock company
• Representative office of a foreign company
• A joint venture company

As of 2020, the UAE allows 100 percent foreign ownership of companies on the UAE mainland for most economic activities (some exceptions apply in fields of security and defense, banking, and telecommunications, among others).

Step 3: Reserving and registering a trade name

The chosen trade name must adhere to the following criteria:

• Must be followed by an abbreviation of the legal form (such as LLC)
• Cannot include improper words and must not violate public sensibilities
• Must be consistent with the economic activity performed
• Must not include the names of Allah, the names of government authorities, or the names or logos of third parties
• Must be available and not registered by another company (you can check which names are already in use here)

Trade names must be approved by the DED, while any trademarks are approved by the Ministry of Economy (MOE).

Application to register a trade name can be conducted through the Department of Economic Development in the emirate in which the company will be established. This can be done online through the emirate’s DED website (for instance, Abu Dhabi or Dubai). Requirements and fees for registering a trade name differ between the emirates.

Reserving a trade name will incur a fee which varies depending on the location. Trade names are usually reserved for a set period of time, which varies from

Step 4: Application for initial approval

Companies must receive initial approval from the MOE before they can apply for an economic license. Initial approval means that the MOE has no objection to the business being established in the country, but does not permit a company to start operations.

Initial approval procedures vary depending on the emirate and the type of entity being established.

In Dubai, for instance, applying for initial approval can be done through the Invest in Dubai portal or in person through a service center.

The following documents are required to apply for initial approval in Dubai:

• Copy of the licensee’s passport/ID
• Copy of the applicant’s residence permit/ visa (for non-GCC nationals)
• The company’s articles of association (AoA)
• Feasibility study of the project
• The parent company’s board resolution to open a branch in Dubai
• Letter of authorization of the managing director
• Copy of the parent company’s commercial registration certificate
• Copy of the parent company’s Memorandum of Association (MOA)
• Copy of the parent company’s license

Foreign companies must also obtain approval from the General Directorate of Residency and Foreigners Affairs (GDRFA) before obtaining the initial approval.

Step 5: Choosing a company address

Companies must have a legal address in which their commercial activity takes place. This address must adhere to the specific zoning laws in the emirate in which it is located.

Companies must have a lease contract for their business. Specific requirements for the vary differ between the different emirates. In Dubai, it must be registered through the EJARI online tenancy registration system.

Step 6: Formulating a Memorandum of Association or Local Service Agreement

Certain types of company structures must make a Memorandum of Association (MoA) in order to register. These are:

• Partnerships
• Limited partnerships
• LLCs
• Private joint stock companies
• Public joint stock companies

The MoA must be signed by the company’s founding members or partners. It must also include information such as the business address, the intended business activities, shareholder details, the company’s proposed trade name, authorized share capital, the liability of the shareholders, as well as other information.

Meanwhile, sole proprietorships are required to have a local service agent agreement (LSA) to register.

Step 7: Applying for additional government approvals

Depending on the type of business activity, companies may be required to receive additional licensing from different government departments. These include:

• A telecommunications license obtained from the Telecommunications and Digital Government Regulatory Authority (TDRA) for telecom activities;
• A healthcare facility license from the Emirates’ healthcare department (such as the Dubai Health Authority) for health-related activities;
• An Industrial Production License from the Ministry of Industry and Advanced Technology (MOIAT) for manufacturing activities
• Tourism and hospitality licenses from the Department of Culture and Tourism

Step 8: Submission of required documents and payment of fees

After the company has gathered all the necessary documents, it can apply for the corresponding economic license by submitting the documents through the chosen channel.

Note that the documents required may differ depending on the emirate or municipality through which you are applying.

After the documents have been submitted, you will be required to pay the fees within a certain time limit (usually 30 days). Fees vary depending on the type of company and the location.

The license processing time also differs, but normally takes between a few days to a few weeks.

Step 9: Registration with the chamber of commerce

Companies may be required to register with the chamber of commerce in the emirate or municipality they are in before they can start operations.

Takeaway

Navigating the business registration process in the UAE mainland requires careful attention to detail and adherence to specific procedures, which differs from Free Zones. Foreign investors and enterprises are advised to consultant local professional experts to ensure their businesses are seamlessly integrated into this thriving economic environment and are able to tap into key advantages and qualify for relevant incentives.

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