Dubai’s business hub attracts entrepreneurs worldwide, and they always wonder if a non-citizen can start a business in Dubai. If you need a quick answer to that question, it’s YES- a non-citizen or foreigner can start a business in Dubai. 

At Prospr, we help expats set up their business and life in Dubai. Our expert business consultants offer guidance regarding crucial aspects of setting up a company in Dubai, while our lifestyle experts assist you and your family in settling in Dubai. 

We have created a comprehensive guide for foreigners and non-citizens interested in opening a new company in Dubai. This guide will answer all your queries and help you make informed decisions. 

Are you ready to dive in? Let’s get to it.

Can a non-citizen start a business in Dubai?

Yes, you can start a business in Dubai as a non-resident. But you may or may not have to find a local sponsor. Dubai has two common jurisdictions: Mainland and Freezone.

Foreigners planning to start a business on the Mainland may have to find a local sponsor who holds a 51 per cent share of their company. This local sponsor can be a UAE citizen or Emirati. Check out our comprehensive guide about local sponsors to learn more.

On the other hand, if you set up a Free Zone company, you don’t need a local sponsor and will enjoy 100 percent foreign ownership of your business. Besides, there is low corporate tax and no personal income tax.

The UAE government always encourages foreign startups, entrepreneurs, and businessmen to invest in Dubai or start their own businesses. They offer favorable policies to attract investors and businesspeople who want to save money. 

If you don’t want to move to Dubai but are still interested in starting a business in Dubai, then an offshore company setup is what you need to do. 

Understand Dubai trade license and business structure.

Before you start working on starting a business in Dubai, you must be familiar with the standard trade licenses and legal structure in Dubai, which you can follow for your own company.

Here are common types of trade licenses in Dubai:

• Commercial license: In case you want to get involved in trading, buying/selling of goods and import/export operations, then you need to acquire a commercial trade license in the UAE
• Industrial license: If you plan to engage in suitable manufacturing activities, you need an industrial license.
• Tourism license: If you plan to start a business in the tourism sector, you will get this specific trade license.

Please check the detailed guide on different types of trade licenses in Dubai.

Here are the most common legal structures for companies in Dubai:

Sole Proprietorship

When a single individual manages the whole business operation, you can opt for a sole proprietorship business structure. In that scenario, the owner is personally liable for all profit and loss; in case of bankruptcy, your personal assets will be used to pay the liabilities of your business.  

LLC

Opening an LLC is your best bet if you want to safeguard your assets in Dubai. You can start an LLC with two and up to 50 shareholders. Your assets won’t be used to pay liabilities in case of default.

Partnership

It’s another business structure in which two or more people can set up a partnership. Each partner can participate in the business and share profit and loss. 

How to start a business in Dubai as a non-citizen or foreigner

Here are some steps you need to follow to start a business in Dubai:

Step 1-Define business activity

First, you need to identify what kind of business activities you plan to conduct in Dubai. You will get a specific trade license based on those activities.

Step 2-Pick a business name.

As a foreigner, you usually don’t know the rules and regulations you must follow for a complete business setup. Let’s take an example of selecting a business name in Dubai. You can’t choose any name; there are specific rules and customs that you need to comply with. 

Therefore, we always suggest foreigners get help from our business name consultants at Prospr. If you handle this matter all alone, you will find it quite challenging to get your business name approved since there are tons of guidelines and rules. 

But with us, this whole process becomes simple and convenient. We will help you select the best business name without hassle. Call now!

Step 3-Choose legal structure

Now, once you have registered your business name, the next important decision to make is regarding your company’s legal structure. It would help if you chose from LLC, Sole Proprietorship, partners, or others.

Step 4-Business registration

You will provide essential documents for your business registration, such as a business plan, passport copies, etc. Here is how to register a company online. 

Step 5-Apply for a trade license.

You will apply for a license after registering your name and getting initial approval from authorities relevant to your business industry. The Dubai Economic Development (DED) is an authority that issues trade licenses in Dubai’s Mainland areas. If you plan to start a business in Dubai, you will get approval and a permit from the FZA—Free Zone Authority.

Step 6-Open bank account

Since you have all the required documents for your business, it’s time to open your corporate bank account. 

Read how to set up an offshore bank account in Dubai?

Step 7-Apply for visa

You will get an entry permit as a non-citizen of the UAE, and once you have your license in hand, you can apply for a residence visa. You can even issue an employee visa on this license.

Document required to set up a business in Dubai as a non-citizen

• Passport copy of business shareholders.
• Non-UAE residents need to submit a copy of their visa.
• A business plan provides details of your business strategies, objectives, and financial projections.
• Letter of intent from local sponsor- if you need a sponsor
• Certificate of Good Conduct

Benefits of starting a business in Dubai as a non-citizen

Here are some advantages you can get through company formation in UAE:

• First of all, there is no financial uncertainty. The stable economy of Dubai provides a safety net for your business assets and room for growth.
• There is no income tax and low corporate tax, which is another attraction for foreigners. There is also no VAT for free zone companies. Tax efficiency is another plus of setting up a company in Dubai.
• Dubai’s strategic location makes it simple for non-citizens to start an international trade company and do business with Asia, Africa, and Europe.
• When it comes to amenities for your business, you can take advantage of world-class public spaces, healthcare, and infrastructure.
• Business-friendly government policies are another advantage. 

Prosper made company formation simple for  non-citizens and foreigners 

Properly understands how difficult it is to navigate all the aspects of business setup in Dubai for non-citizens. Therefore, we offer you a helping hand. Whether you plan to move to Dubai with your family or are considering making a living through a new company setup, we can offer guidance and assistance for both. Send us inquiries to hello@prospr.