Are you a UK national who wants to start a company in the UAE? This article is your complete guide to register a company in the UAE from the UK. Read on to get started today.
What are the benefits of starting a business in the UAE?
The UAE is increasingly becoming a top choice to start and run a business. Benefits you can leverage by starting your business in the UAE are:
- Pro-business legislation
The UAE government has a pro-business approach to policy making. It has allowed 100% foreign ownership in all business areas except those of national importance, making the UAE an attractive destination for foreign investment.
- Macroeconomic stability
The UAE dirham is pegged against the US dollar at a fixed rate (1 AED = 0.27 USD). This reduces exchange rate risks for foreign businesses.
- Tax incentives
UAE offers direct and indirect tax incentives like:
- 0% personal income tax
- 5% VAT standardized across Gulf Cooperation Council (GCC)
- 0% corporate tax in free zones and income below AED 375,000 ($102,103)
- Access to global and local markets
The UAE is strategically located to provide access to global markets in Asia, Europe, and Africa. In the Middle East, local access is improved through a free trade agreement the UAE has with its neighbours. This offers businesses opportunities for growth through market expansion.
Which is better for incorporating – Dubai or Abu Dhabi?
Abu Dhabi is the capital of the United Arab Emirates. The city is home to many businesses and industries by private players. It boasts of a wide and diverse talent pool.
Abu Dhabi is ideal for incorporating your business if you engage in industrial activities. An understanding of business setup in Abu Dhabi can help you make a choice.
Dubai is the most populous city in the United Arab Emirates. Dubai has developed an entrepreneurial culture by attracting businesses across the globe. It is becoming a global financial hub and prime destination for private capital.
An understanding of mainland company formation in Dubai can help you make a better choice.
Pick a name for your business
As you plan to start your business in the UAE, you must decide a trade name for your business. You can register your trade name with the Department of Economic Development of the respective emirate.
Before you choose your trade name, there are some key points you must keep in your mind:
- Trade name must be followed by abbreviation of business structure
- Trade name should be consistent with economic activity and must be unique
- Trade name must not include inappropriate words
There is no need to apply for a trademark separately. Along with a trade name, you can apply for a trade mark. The trade name is approved by the Department of Economic Development, while the trademark is approved by the Ministry of Economy. A trademark helps protect your brand. These are renewable periodically.
Apply for an economic license
To start a business in the UAE, you must apply for an economic license with the Department of Economic Development of the emirate you have chosen for business.
You can choose from more than 2000 economic activities permitted in the UAE for businesses by foreign nationals. These fall under six main types of economic licenses:
- Occupational license
- Industrial license
- Commercial license
- Professional license
- Tourism license
- Agricultural license
Obtaining a license provides you permission to conduct the corresponding business activity.
Types of business structures in the UAE
Business structures legally permitted for businesses in the UAE from the UK are:
- UAE-incorporated company
You can incorporate your business as a corporation in the UAE. It creates a separate legal entity with limited liability. Options include civil company, limited liability company, holding company, and public or private joint stock company.
- Branch of foreign company
If you already have a company in the UK, you can start a branch of the company in the UAE.
- Sole proprietorship
You can start a business independently as a sole proprietorship, but liability is often unlimited due to absence of a separate legal entity.
Factors to consider before choosing a business structure
The choice of a business structure depends on your business activity, capital, and extent of liability you wish to take. Besides these, there are some factors specific to foreign business in the UAE that you must consider.
- The UAE Government amended their Commercial Companies Law to permit 100% foreign ownership in businesses, excluding sectors of national importance.
- UK nationals with a sole proprietorship in the UAE can only obtain a professional license (out of six types of license). This would restrict your business operations.
Besides the business structure, you need to decide a suitable location for conducting your businesses. The seven emirates in the UAE are predominantly divided into mainland and free zone areas, each offering different benefits.
Make an informed decision by consulting incorporation experts.
Register your company with the UAE government
After making a decision about the business activity, business structure, and jurisdiction, you need to register your company with the UAE government.
The steps involved in the registration process are:
- Choose a trade name
- Get initial approval through ‘No Objection Certificate’
- Submit required documents
- Get final approval and license
- Open a bank account
A look at our detailed guide on business setup in the UAE can help you understand the registration process.
Starting a business bank account for your UAE company
Now, it is time to open a bank account for your company in the UAE. A bank account helps you make and track business transactions. Choose an account type that suits your business needs – the most suitable one is usually the current account that allows frequent withdrawal and deposit flexibility.
We help you open a bank account in the UAE, along with the rest of the incorporation process.
Apply for Emirates ID and residency visa
You may decide to apply for a residency visa in the UAE, to help in smooth conduct of offline business operations. The UAE government has introduced the Green Visa as a long-term residency visa for a 5 year period. Freelancers, self-employed, skilled employees, and investors are eligible for the Green Visa.
Check out our article on UAE Green Visa to find out the required documents, costs, and application process.
What does it cost to register a company in the UAE from the UK?
Initially, as you set up your company in the UAE, you will need to incur one-time costs like license fees, registration fees, and bank account opening charges.
Later, as you start running your business, you incur recurring operating costs like visa fees, salaries, and lease/rental fees.
These costs vary with business jurisdiction (emirate and mainland vs free zone) and business requirements. Some locations offer business packages of license, visa, and workspace, to ease the business setup.
Understand compliance and tax obligations in the UAE
You need to comply with the UAE regulations and meet tax obligations to run your business in the UAE. The major areas of compliance and tax obligations are:
- Filing corporate tax returns (if taxable income exceeds a set threshold)
- Filing VAT returns
- Conducting financial audits
- Renewing economic license
- Renewing residency/ employment visa
What are the requirements to start a business in the UAE from the UK?
UK nationals can start businesses with 100% ownership in the UAE in a wide range of business areas, excluding those of strategic and national significance.
To obtain a license and start a corporation in the UAE, as a UK national, you must submit:
- A business plan (area of business, jurisdiction, etc)
- A letter of intent on the investment proposal
- Passport copies of company’s shareholders and managers
- 2 year audited financial reports or reference certificate from a bank
- Original and notarized Registry Identification Code (RIC) form for managers
How to overcome the challenges of company incorporation in the UAE from the UK?
Starting a business in the UAE from the UK can be challenging due to unfamiliar regulations and cultural differences. Instead of spending time navigating these complexities, you can focus on growing your business by partnering with consultants like Commenda, who specialize in incorporation and compliance in the UAE.
How does Commenda help with the UAE incorporation and compliance?
Commenda helps business-minded individuals like you to help with incorporation and compliance of a business in the UAE. You can focus on just the core businesses. You can relax as we take care of:
- End-to-end incorporation
We help you do all things related to incorporation – reserve a company name, lease office space, apply for business license, visa, register your business, and open your corporate bank account. All this is done in a matter of days starting from $3,800.
- VAT return filing
We help you fill your VAT returns in a timely and accurate manner with the Federal Tax Authority (FTA). We help you with determining taxability of items, tax credit, and VAT amount payable.
- License renewal
Your business license must be renewed periodically. We help you renew your business license for all jurisdictions by submitting the required documentation and paying the license renewal fees.
- Annual financial audit
Companies must submit audited financial statements to the relevant authority. Commenda’s Service Marketplace helps you find verified accounting professionals who have expertise in the UAE environment. You can avail tax, legal, and secretarial services through this marketplace.
We just do not stop there, we help you with ESR reporting and Ultimate Beneficial Owner (UBO) declaration as well. Still having questions about incorporating your business in the UAE? Book a free consultation with our experts.
