Dubai’s vibrant business-ready environment, strategic positioning, and tax-friendly policies have made it a prime destination for entrepreneurs globally and also made it easy to set up a business in Dubai. The UAE provides UK citizens with business opportunities like no other, its markets are vast, its economy stable, and it plays host to numerous lucrative opportunities.
To start a business in Dubai as a United Kingdom national, you’ll need a residence visa and a trade license and to have registered with government bodies depending on your specific business activities.
Dubai is an influencers’ paradise, a playground of lavish lifestyles and Instagram-able locales. British influencers are beginning to capitalize on the city’s sparkling social media scenery and global appeal to raise their own profile and follower count.
In this article, we will discuss how UK citizens can start a business in Dubai, things to know before you start, and how Reflex Accounting will help you in all. For those interested, here’s a deep guide to help you move through the process as efficiently as possible.
Why Choose Dubai for Your Business?
Dubai is a global business hub for an amazing combination of reasons:
1. Zero Corporate and Personal Income Tax:
One of the top benefits of establishing a company in Dubai is no corporate and personal income tax. This policy is designed for entrepreneurs to maximize profits.
2. Strategic Global Location:
Strategically positioned at the intersection of Europe, Asia, and Africa, Dubai offers access to more than 2 billion consumers.
3. Business-Friendly Ecosystem:
Attracting foreign direct investment is a priority for the government of Dubai as well with grants, initiatives, and modern governance structures designed to suit the entrepreneur.
4. World-Class Infrastructure:
The headquarters and satellite offices can scale quickly, and well-equipped facilities are available to support distribution, logistics, and transportation operations.
What to keep on your mind before opening up a business in Dubai?
You have to consider several important things before setting up a business in Dubai. These core elements will help ensure you remain on the right track and will help you establish demand for your product or service. Dubai’s economy does not only depend on one industry. It has a variety of sectors from tourism to hospitality, technology, logistics, and e-commerce. Grasping the demand in the market will enable you to pinpoint the most suitable business activity and sector for investment.
It would be best to decide your business’s legal structure. You could operate as a partnership or an LLC, among others. Each structure has its pros and cons, depending on your business goals.
Then you need to know the cost involved with setting up a business in Dubai including the rent, the utilities, and the salaries. It is important to plan for these expenses so your business can run smoothly.
What is a free zone?
Choosing the appropriate business location while establishing in Dubai is quite a crucial consideration. Several other “free zones” have been established to attract certain economic activities, like technology and media or logistics.
Companies located in free zones can benefit from advantages such as complete foreign ownership, tax breaks, and streamlined registration procedures.
Thus, if you want to enjoy the advantages of cutting down on bureaucracy, streamlined processes, and a talented labor force, then finding out which free zone is suitable for your kind of business activities will prove to be essential research you have to conduct.
Do you require a visa to set up a business in Dubai?
If you are a business owner in the UK and a resident of the UK, you will require a residence visa for your Dubai business setup. This could be a business visa, an investor visa, or an employment visa.
Depending on your case, each visa has its conditions and benefits. Be sure to speak with a legal advisor to determine the best visa for your business.
Key Steps to Set Up a Business in Dubai as a UK Citizen
1. Decide on a Business Activity
Before you start, go ahead and define your business activity. Dubai is heavily regulated, so your activity must fit one of the categories recognized by the Department of Economic Development (DED):
- Commerce: Trading activities.
- Industrial: Manufacturing and Production
- Professional: Consultancy or service-based businesses.
Each activity has specific regulations, so choosing the right category is crucial.
2. Choose the Right Business Structure
Deciding on the business structure impacts ownership rights and operational regulations. Options include:
a. Free Zone Company:
- 100% foreign ownership.
- No local sponsor is required.
- Set up for re-exporting companies or organizations that are international.
b. Mainland Company:
- Perfect for retail shops, restaurants, or consultancies.
- Local Sponsor Owning 51% Shares Is MustIt provides the ability to trade in the UAE market.
- Set up for re-exporting companies or organizations that are international.
c. Offshore Company
- Also good for holding companies and international trade
- May not carry on business in the UAE mainland.
3. Select the Right Location to Set Up Your Business
More than 30 free zones in Dubai cater to specific sectors, including media, technology or trade. Alternatively, mainland Dubai is a gateway to the local UAE market.
Free Zones for UK Entrepreneurs
- Dubai Multi Commodities Centre (DMCC): Ideal for trading and commodities
- Dubai Internet City (DIC): Ideal for tech startups.
- Dubai Silicon Oasis (DSO): Best for tech-focused manufacturing.
4. Register Your Business Name
Next, you will need to register your business name. Dubai’s naming regulations are strict:
- Stay away from names with foul or religious connotations.
- The name should indicate your business activity.
- Avoid acronyms or abbreviations unless they are part of your brand.
Once you have decided on a name, submit it to the DED or the free zone authority for receipt of approval.
5. Obtain a Trade License
Your business activity determines the type of trade license you’ll need:
- Trade license: A trade license is an authorization allowing you to execute specific business within the trade itself — ranging from construction to retail to tourism. It’s issued by the Department of Economic Development and lasts for one year.
- Business license: A business license, in contrast, permits you to conduct business in a certain area. It’s issued by the Dubai Municipality and is good for three years. A trade license and a business license may be required depending on the type of business you are running.
- Commercial license: A commercial license allows companies to conduct other activities related to manufacturing, wholesaling, management, importing, and exporting throughout the UAE.
Obtaining a license through the DED for mainland businesses or visiting the relevant free zone authority.
6. Prepare the Required Documentation
When applying for approvals you must submit certain documents:
- A copy of your passport.
- Application forms filled in.
- Business name reservation letter.
- Memorandum of Association (MOA).
- Business plan (for free zone applications)
7. Finalize Visa Requirements
If you are a British citizen, you will need a valid UAE residence visa to set up and run a business in Dubai. The visa process involves:
- Entry permit application.
- Medical fitness test.
- Emirates ID registration.
Depending on what structure you choose, you may also sponsor visas for your family and employees.
8. Open a Corporate Bank Account
All dealings need to be made through a UAE-based bank account. To open the account, you may need to provide your trade license, proof of residence, and other business documents to banks.
Costs Involved in Setting up a Business in Dubai
The business formation cost in Dubai varies according to the type of business set up, the licenses needed, and the area of the business. Key expenses include:
- Trade License Fees: From AED 25,000 to AED 29,000
- Office Space Rent: The price depends on the free zone or mainland needs.
- Visa Fees: The processing fees for the residence visa vary from AED 3,500 to AED 4,000
- Registration Fees: Free zone registrations begin at approximately AED 10,000.
You need to budget for these costs to avoid surprises.
Legal and Regulatory Compliance
To successfully set up your business, compliance with Dubai’s laws is mandatory:
- Audit Requirement: Most free zones require you to have an annual financial audit.
- VAT Registration: Where businesses record over AED 375,000 in annual sales
- Employment Laws: Familiarize yourself with UAE labor laws when hiring your staff.
Engage Professional Assistance
For newcomers, the business setup process in Dubai can be quite daunting. Using professional business consultants can help simplify this process:
- License applications.
- Visa processing.
- Document approvals.
How to Market Your Business in Dubai
Once your business is established, marketing becomes the most vital aspect of your success:
- Use the Internet: Input on social media and search engine optimized websites creating a brand.
- Attend Trade Fairs: One of the most common aspects of Dubai, it is home to innumerable exhibitions and events to promote your business.
- Network Locally: Get involved in business forums/groups—meet local business owners
Is it advisable to register your company’s bank account in Dubai?
Yes, opening corporate bank accounts is a part of the business setup for UK citizens in Dubai. It’s easier to manage your finances and pay your suppliers and employees with a business bank account for your new company.
And some banks will require you to open a company trade license before you can open a company bank account, and will also require a minimum deposit.
In the case of a free zone company, it is necessary to note that the relationship with banks differs from one free zone to another. You are also taught to abide by the rules of central banking.
On average it can take you between 2 days to 2 weeks to get the account set up depending on which bank you go to (again here we can help you make a decision on which bank would suit you best as per your business activities and requirements).
Am I obliged to live in Dubai to run my business?
If you are a UK resident, you will also have to suffer the tax disadvantages of residency in that jurisdiction, over and above any adjustments to the way your company is structured. This is typical you will be taxed where you are resident for tax purposes. However, if you plan to be a resident in another country that is a lower tax jurisdiction, or a non-income-tax-charging foreign country like Bali, you can still get the tax reductions that Dubai provides.
This is a complex territory and the ‘tax law’ of other countries along with double tax treaties between countries that govern which country has ‘taxing rights’ over any individual must considered.
Final Thoughts
Starting a business in Dubai as a UK citizen is an awesome chance to access a growing economy and international market. Learn about the processes, pick a structure, and comply with the rules, and you can make your dream of being an entrepreneur a reality.
Ready to leap? Start today to turn your business into a vision, the doors of Dubai are open!
Armed with this guide, you should be well able to set up your business in Dubai if you wish to do so in a compliant and efficient manner.
