Steps to start a business on the mainland – Starting a business regularly
Initiating a business through conventional methods involves a systematic process with the following stages:
- Identifying the business activity
- Selecting a suitable legal structure
- Registering the trade name
- Obtaining initial approval
- Drafting a Memorandum of Association and a local service agent agreement
- Deciding on a business location
- Obtaining further government approvals
- Submitting necessary documents and fulfilling fee payments
Identify business activity
The basis for determining the legal structure and the type of license, whether commercial, industrial, or professional, is the nature of the identified business activity. There are six license categories available, including industrial, commercial, professional, tourism, agricultural, and occupational.
Notes:
- An investment or business can involve a variety of business activities.
- There is a choice of more than 2,000 business activities available in the UAE.
Select the legal form
The selection of a legal form is primarily dictated by business needs, serving as the basis for identifying relevant laws and regulations. In the UAE, investors have the flexibility to choose from a variety of legal forms, including but not limited to:
- General partnership
- Limited partnership
- Limited liability company (LLC)
- Public joint stock company (PJSC)
- Private joint stock company (PrJSC)
- Civil company
- Local company branch
- GCC company branch
- Foreign company branch
- Free zone company branch
- Sole establishment
- Holding companies.
Note: The legal framework of the business should be in harmony with the specific nature of the business activity. For comprehensive details on the requirements for each business activity and legal structure, consult the following resources:
- Dubai Economy: Guide to Starting Your Business in Dubai
- Sharjah Investment and Development Authority: Procedures and Requirements
- Ajman Department of Economic Development: Issuance of Business Licenses
- RAK Department of Economic Development: Licensing Procedures
- Fujairah Government: Conducting Business Operations in Fujairah.
Register the trade name
A trade name plays a crucial role in distinguishing one business from another, offering insights into the nature and structure of the business. Investors can initiate the application for a trade name through the economic department in each emirate, utilizing its website or mobile application.
Guidelines for choosing a trade name:
- The trade name should incorporate the acronym denoting the business structure (legal form of the company), such as LLC, EST, PJSC, PrJSC.
- It must comply with the ethical and societal standards of the country.
- The trade name should align with the required type of activity and the legal status of the company or business entity.
- It should not include names related to any religion, governing authority, or external bodies, and must not violate public morals or order.
- The chosen trade name should not have been previously registered.
Throughout the application process, you will receive a payment voucher or transaction number, serving as a reference when making the necessary payment.
Notes
The local Department of Economic Development is responsible for registering trade names, while the Ministry of Economy oversees the registration of trademarks.
- Trade name certificates require periodic renewal.
- For additional information, refer to the following areas:
- Verify business name availability: Ministry of Economy
- Request to reserve a trade name: Department of Economy & Tourism – Dubai
- Perform a trade names search: TAMM – Abu Dhabi
- Check trade name availability: Economic Development Department – Sharjah.
Initial approval
The issuance of an initial approval indicates that the UAE Government has no objections to the establishment of the business within the country. It allows the investor to proceed with the subsequent steps in the business setup process, although it does not grant the authority to operate or engage in the business activity.
Foreign investors are required to obtain approval from the General Directorate of Residency and Foreigners’ Affairs before securing the initial approval.
MOA and LSA
The requirement for a fully completed and signed Memorandum of Association (MoA) or a Local Service Agent Agreement (LSA) for a business depends on its legal form. Specifically, the Memorandum of Association is mandatory for the following business legal structures:
- Limited Partnership
- Limited Liability Company (LLC)
- Public Joint Stock Company (PJSC)
- Private Joint Stock Company (PrJSC).
Notes:
- Memorandums of Association (MoAs) and agreements are drafted and officially verified by law firms, courts, and notary publics based in the UAE.
- Businesses that are entirely owned by non-GCC residents require the designation of a local service agent from the UAE. This appointment is formalized through an agreement verified by either the notary public or the court.
Select a business location
Every business operating in the UAE must have a physical address for its operations. The selected business premises and location must comply with the regulations specified by the respective emirate’s Department of Economic Development and conform to the land planning regulations set by local municipalities.
Documentation, including office and warehouse rental agreements, is obligatory. In some emirates, these agreements may require attestation. Notably, in Dubai, the agreement must be registered with Ejari.
Get additional government approvals
Ministry of Interior:
In certain instances, obtaining additional approvals from government entities responsible for overseeing specific business activities may be necessary. Here are examples of such activities categorized by the respective ministry:
Ministry of Interior:
Approvals are required for activities associated with general transport, encompassing driving schools, fire equipment, alarm and safety systems, used-car dealers, used auto-parts, and car rental.
