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Starting a business in Dubai is a dream for many ambitious entrepreneurs not just from Asian countries, but even from the West. Why is it so? From its earliest days, Dubai has been involved in trading. For over six centuries, its creek has provided a safe haven for the merchant vessels laden with goods from Dubai’s traditional trading partners in the Far East, the Indian subcontinent and Africa. In the past, these goods were sold to the camel caravan tribes in the vast desert hinterland. Today, the city is a major re-export centre and the world comes to shop in Dubai. Dubai was also once one of the world’s foremost pearling centers. The emergence of cultured pearls in the 1930’s could well have devastated the economy; however, Dubai with a reputation as a world centre for trading in gold and other precious metals continues to have a thriving economy. Dubai is the second largest of the seven Emirates. The Late Ruler of Dubai, His Highness Sheikh Rashid, together with late His Highness Sheikh Zayed, Former President of the UAE, both were instrumental in forming the federation, which has brought stability and prosperity to the region.
It is not surprising therefore, that entrepreneurs are flocking to setup business in Dubai. Each country has certain rules and regulations that are to be followed while starting a new organization. Company formation in Dubai is also subject to several rules and regulations. Morison Menon, as one of the top professional advisory companies in the UAE, assists clients to comply with such laws.
Procedure for Company Formation in Dubai
The Department of Economic Development, with the institutional support from the Dubai Chamber of Commerce & Industry, is the statutory body that regulates and controls the licensing procedures for company formation in Dubai; it also specifies the rules that need to be complied with during the entity’s lifetime. It was formed to organize and activate industry as well as internal and external trade in the Emirate and prepare studies relating to industrial and commercial activities. One of the first and most important steps for company registration in Dubai is applying for and procuring the required licences.
Types of Licenses issued in Dubai
A trade license is issued to a natural or juridical person to practice any trading activity for the purpose of profit making through buying and selling of goods. These licenses are issued for engaging wholesale or retail trade enterprises, contractors, hotels, transport and storing establishments etc., A Trading License can be a General Trading or Specific Trading. A specific trading license limits the scope of activities to trade in only closely related items. [For e.g. a company can not trade in building materials, if its licensed activity is trading in computer peripherals]
An industrial license is issued to a natural or juridical person to practice any investment activity, the object of which is to discover natural resources or transform raw materials in terms of its structure or appearance into manufactured products or to transform the semi-manufactured products into fully manufactured products by using mechanical power and segregate the products, filling, assembling or packing them.
A professional license is issued to a natural or juridical person to practice any profession in which he depends on his physical or mental efforts rather than depending on a cash capital. This license is issued to practice certain professions such as engineering consultancy, other consultancy services and studies, auditing and accounting, business set up, company formation, medical and educational services and similar services
|A) Engineering Consultancy (Dubai Municipality Requirements)
Expatriates may, pursuant to the stipulations and conditions provided for, apply for registration in the register of engineers subject to the following conditions:
Expatriate engineer must reside in UAE not less than 9 months in a year. One more expatriates may join the firm; provided they are entered in the Register of Practicing Engineers and the maximum shareholding in the capital allowed shall not exceed 49%. Engineering firm operating in Dubai shall adopt one of the following forms:
a) Local Engineering Firm
A local engineering firm is the firm owned by one or more UAE nationals who are entered in the Register. One or more expatriates may have share in the ownership of the firm, provided that they are entered in the Register and maximum such ownership allowed in 49%. A local engineering firm can be classified as follows:
Number of Years of Experience
| b) An Associate Engineering Firm A local engineering firm classified as First Category may associate with a Foreign Engineering Firm in establishing not more than one Associate Engineering Firm to carry out some specialized engineering works, provided that such firms should have previously practiced the engineering profession for a period not less than 10 years inside or outside the country in the field required to be licensed.c) An Expert Engineering Firm An Expert Engineering Firm is the firm carrying out some of the sophisticated specialized engineering works. Its work shall be limited to provide opinion to the local engineering firms, the associate engineering firms or any of the official bodies. The applicant of the Expert Engineering Firm license must hold a scientific degree in a sophisticated engineering specialization, have practiced the profession in his sophisticated specialization for a period of not less than 15 years and required to carry out the activity personally. It is conditional for an Expert Engineering Firm (if the licensee is an expatriate) to appoint a UAE national as Local Service Agent whose domicile is in Dubai.
d) A branch office of Foreign Engineering Firm Foreign Engineering firm Branch Office is defined as “the branch established in the Emirate by one of the foreign specialized engineering firms�?. Licensing of the same shall be limited to the fields of sophisticated specialization not commonly provided by local engineering firms.
Conditions for Company Set up in Dubai:
a) Each of the licensed fields of activity to be practiced should be lead by an engineer whose experience is not less than 15 years in sophisticated specialization and it is permissible to appoint one of the specialization heads as a resident office general manager.
b) The specialization head should be assisted by a number of assistant engineers whose experience is not less than 7 years and that their number should be consistent with the volume of the current works assigned to the firm and that the head office should undertake to appoint the number necessary to reside in the Emirate throughout the period of carrying out the projects which require their presence.
B) Medical and Related Professions (Ministry of Health, Department of Health and Dubai Municipality Requirements)
Stage – I: Approval by Ministry Of Health
Stage – II – Approval by Department of Health (DOH)
Stage – III – Approval by Dubai Municipality and issue of License by Dept. of Economic Development
C) Legal Consultancy (Ruler’s Office Requirements)
1. A formal letter addressed to “H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai�? requesting for the approval to practice the activity “legal consultancy�? in Dubai.
2. A detailed profile of the applicant mentioning his/her experiences in the legal consultancy field, i.e., curriculum vitae.
3. A certificate duly authenticated by the concerned authority confirming the applicant is currently practicing as a lawyer/legal consultant in the country.
4. A letter of confirmation from the Law Firm stating the applicant is a partner or working with the firm and the number of years.
5. Passport Copy of the Applicant.
6. Two passport size photographs.
7. Qualification Certificate/s duly legalized from the UAE Embassy.
D) Management Consultancy (DED Requirements)
1. To be exclusively dedicated to the business of the consultancy firm
2. To be holder of Bachelor Degree in the field in which he requires obtaining a License.
3. To have experience in the specialization field for not less than 3 years after obtaining the University degree.
4. Not to be owner or a partner in any of the consultancy companies.
5. To submit copies of work experience certificates and academic qualifications
6. To obtain a certificate of good conduct and reputation from Dubai Police General H.Q.
Industrial Areas for Company Incorporation in Dubai
The Dubai Government has allocated a number of Industrial areas and provided them with all necessary facilities, such as internal roads, electric power, water, tele-communication services and other facilities. The local government offers various incentives to the businesses involved in industrial projects. These include exemption from customs duty on import of items for the use of industrial projects such as raw materials and machinery, in addition to a 10% price preference in government prices over imported goods. There are five basic requirements to be complied by an entrepreneur to start up an industrial project in Dubai.
1. No objection from Dubai Municipality
2. Obtain initial clearance from Ministry of Finance & Industry (Industrial Department)
3. Apply for industrial license with Department of Economic Development
4. Arrange the factory site (such as preparation of factory site, installation of machinery, import of raw materials etc.)
5. Register the project in the Industrial Register at the Ministry of Finance & Industry
Dubai Investments Park (DIP)
Dubai Industrial City
International Standards Activities in Dubai Industrial City will be governed under international safety, quality & environmental standards. Dubai Industrial City will introduce the Dubai Quality Mark (DQM) for products manufactured in the city.
Industrial Fund Dubai Industrial City is setting up a multi-million dollar fund to provide financial products tailored to the needs of the industrial sector. The fund is being set up in conjunction with leading banks, investment houses and prominent business groups in the region. The fund will be managed by globally renowned industrial fund managers.
Advanced Logistics: TransPARK – Dubai One of the major segments and attractions of the Dubai Industrial City will be a dedicated Logistics Park. This will be especially designed to meet the special logistic needs of the tenants. It has specialized facilities from warehousing, labeling and packaging to advanced transportation systems.
Education Academic zone will host the first Engineering University in Dubai. The Engineering University will be established in partnership with one of the leading globally branded schools. Several technical training centers will also be set up in partnership with prominent business houses to cater to skill needs of specific sectors Amenities The Dubai industrial city will be a complete city of its own, with a Downtown area that will have varied facilities such as hotels, entertainment, conferences, and residential complex areas Single Window Clearance Dubai Industrial City also offers a one stop shop providing a single window of clearance for government services, support services and access to labor from all over the world