Establishing a business is a strategic process that requires careful planning and extensive knowledge of business and local and international laws. Aspiring entrepreneurs must adopt a clear vision and a strong strategy that will allow them to achieve success and continuity in the competitive business market. Through this article, we will explore the process of starting a business, from initial planning to launching the business. We will highlight the main and essential steps that need to be taken, as well as explore potential challenges and how to overcome them. This article is expected to provide valuable guidance and practical advice for those seeking to successfully establish a business . We will also cover the importance of building social networks and collaborating with financial and legal experts and advisors on this journey.

Conditions for establishing commercial companies

Establishing a commercial company in the UAE requires compliance with a number of conditions and requirements. These conditions vary slightly depending on the type of company and its location, but there are general conditions that must be followed:

• Select the type of company you wish to establish, such as a limited liability company (LLC), joint stock company, sole proprietorship, or free zone company.
• Choose a trade name that complies with UAE laws and does not conflict with other trade names. The name must not violate laws and ethical principles.
• Obtain the necessary licenses from the competent authorities. You will need a business license, and may need additional permits depending on the type of business.
• Specify an official address for the company office. If you are a founder of a company in a free zone, the free zone will provide the required office and space.
• There may be minimum capital requirements, depending on the type of company and the region in which it is established.
• Open a business bank account for the company. You may need to provide documents proving the incorporation of the company and proof of identity of the founders.
• Submit the incorporation documents, which include the articles of incorporation and articles of association, and ensure that they are certified by official authorities if necessary.
• Register the company with the relevant government authorities, such as the Department of Economic Development in the relevant emirate.
• Ensure compliance with local tax laws, including registering the company for VAT purposes if necessary.
• You may need workers’ and property’s insurance. Make sure all necessary aspects are covered with appropriate insurance.

Make sure to consult a consulting company like Itqan to ensure that all legal requirements are met and the incorporation procedures are simplified.

Steps for establishing commercial companies

Establishing a business requires following specific and precise steps to ensure the success of the process and compliance with local and international laws and regulations. Here are general steps for establishing commercial companies:

Develop a business plan

• Define the business idea and describe it clearly.
• Analyze the market and competitors and determine the target audience.
• Determine the company’s organizational structure, marketing plan, and financing.
• Decide whether to create a sole proprietorship, partnership, limited liability company (LLC), or corporation, depending on your business needs and financial and legal goals.

Choose a trade name and register

• Choose a unique and catchy name for the company and ensure it is available.
• Register the trade name with the competent authorities and follow the legal procedures for registration.
• Check local and international requirements and obtain the necessary licenses and permits to operate the business legally.

Identifying locations and infrastructure

Determine the business location and infrastructure needs, such as office space, storage space, and equipment needed. Identify appropriate funding sources to cover start-up and daily operating costs, whether from your personal resources, bank loans, or external investors. Ensure registration with local tax authorities and compliance with local tax controls and laws regulating companies.

Getting Started and Marketing

Start implementing the marketing plan, expanding the network of customers and partners, and implementing the daily operations of the company. Maintain compliance and continuous improvement in terms of continuing to monitor and evaluate the company’s performance and compliance with laws and regulations, and make the necessary improvements to ensure the success and continuity of the company.

Fees for establishing commercial companies

Business incorporation fees vary based on several factors such as company type, geographic location, and local laws. It is worth noting that these fees are subject to change and may vary from one country to another and even within the same country. However, the main fees for setting up a business can be summarized as follows:

1. Registration and incorporation fees: These fees include costs related to submitting applications and documents necessary to establish and officially register the company in local commercial registries.
2. Government services fees: These fees may include fees for permits and licenses necessary from local authorities to conduct commercial activities.
3. Advisory Services Fees: If assistance is required from experts or professionals in the field of law, finance or management, these services may incur additional fees.
4. Rental and Operating Costs: There may be costs to rent the office or commercial space and the costs of operating the business in the chosen location.
5. Banking services fees: If there is a need to open a bank account for the company, these fees may include fees for opening the account and other banking services.
6. Tax and other legal fees: These fees may include taxes on profits and other legal fees related to the company’s operations.

Papers and documents required to establish commercial companies

The papers and documents required to establish commercial companies vary based on the type of company and local laws in the country in question. However, here is a general list of documents that may generally be required:

• Incorporation Application Form: An official form of company incorporation application must be submitted in accordance with the procedures specified by local authorities.
• Constitution document or social contract: It is a document that contains basic information about the company, such as its name, purposes, address, type, distribution of capital, and the rights and obligations of the partners.
• Identity documents for founders and partners: Valid identity documents for founders and partners must be presented, such as a passport or national ID card.
• Legal authorization (if necessary): Legal authorization may be required from any founder who intends to represent the company in the incorporation proceedings.
• Work visa document (if required): If one of the founders or partners is not a citizen of the country in question, a valid work visa may be required.
• Financial reports or capital estimates (if required): Some countries may require financial reports or estimates of the company’s planned capital.
• Tax information (if required): Local authorities may require tax information for the company and its partners.

Commercial licenses necessary to establish commercial companies

The commercial licenses required to establish commercial companies vary depending on the type of company and the planned business activity, as well as the local laws and regulations in the country in question. It is worth noting that there may be additional licenses required based on the specific nature of the business. However, here are some common business licenses that may be required:

1. General Commercial Activity License: This license is issued to companies that intend to engage in general commercial activities such as retail or public services.
2. Construction and Civil Engineering License: Companies working in the field of construction and real estate development are required to obtain this license.
3. Liberal professions license: Issued to individuals who work in liberal professions such as medicine, law, and architecture.
4. Restaurant and café license: Issued to companies that provide dining and beverage services.
5. Tourism and Travel License: Companies operating in the field of tourism and travel are required to obtain this license.
6. Logistics and transportation services license: issued to companies that provide transportation, warehousing, and distribution services.
7. Industry and Manufacturing License: Issued to companies working in the field of manufacturing and manufacturing products.

What are the taxes applied to companies in Dubai?

In Dubai, several types of taxes apply to companies and individuals according to local legislation. Among the main taxes applied to companies in Dubai, the following can be mentioned:

• Value Added Tax (VAT): VAT was implemented in the UAE starting in 2018. The standard rate of VAT in the UAE is 5%, and is charged on most goods and services.
• Corporate Income Tax: Corporate income tax is levied on a specific percentage of the profits made by the company. The percentage varies between local companies and international companies, and some companies are subject to tax exemption.
• Real estate tax: A tax is imposed on real estate in Dubai at a certain percentage of the property value, and this percentage is determined in accordance with the laws of the emirate.
• Registration and License Fees: Businesses may be required to pay registration and licensing fees to obtain business and operating licenses and other necessary government permits.
• Contracts and Transactions Tax: In some cases, a tax may be imposed on contracts and commercial transactions that take place in the Emirate of Dubai.

Tips to start investing in the Emirates 

Investing in the UAE can be a successful strategic move due to its distinguished geographical location, strong economy and developed infrastructure. Here are some tips that may help you in this area:

1. Understanding the local market: It is necessary to carefully study the local market to understand current trends and available opportunities. This includes knowing the most promising sectors and the best times to enter the market.
2. Choosing the right free zone: The UAE contains a variety of free zones, each offering different benefits. Choose the area that suits your business and your specific needs.
3. Collaborate with local advisors: Use local experts in the investment field, such as legal and financial consulting firms. Consultants like “Itqan” can provide you with valuable information and ensure that legal and administrative procedures are facilitated.
4. Compliance with regulations and laws: Make sure to comply with all local laws and business regulations to ensure that you do not run into legal problems that may affect your investments.
5. Carefully evaluate costs: Calculate all costs associated with the investment, including licenses, taxes and fees, and their impact on investment returns.
6. Building a network: Establishing strong relationships with local companies and partners can contribute to the success of your investment. Attending trade events and participating in industry expos can help you build a useful network.
7. Risk assessment: Be prepared to analyze and evaluate potential risks and look for strategies to manage them effectively.
8. By following these tips, you can enhance the chances of your investment being successful in the UAE and make the most of the available opportunities.

Establishing commercial companies in the United Arab Emirates represents an important strategic step towards achieving success and growth in a business environment full of opportunities. Whether you are thinking about starting your own business through a limited liability company, or looking to expand your scope through a public or private joint stock company, the UAE provides you with a wide range of options that meet your business needs and support your ambitious goals. It is essential to be familiar with the legal and procedural requirements related to each type of company, as well as to understand the economic environment and opportunities available in each region. Hiring local experts or legal consultants can greatly contribute to accelerating the incorporation process and ensuring compliance with all regulations.

Frequently asked questions about establishing commercial companies in Dubai