Business Laws in Dubai: A Guide for Foreign Entrepreneurs
Dubai is a top startup location for business, and its promising business opportunities attract foreign entrepreneurs. Access to marketplaces all across the Middle East and beyond is among its benefits. You can make better decisions right from the start if you know the fundamental business law.
Non-UAE citizens may find the legal system unfamiliar. So, legal guidance from attorneys in Dubai is crucial. They know local regulations and can help you start properly. This guide covers Dubai’s essential laws you need to start a business.
Choosing the Right Business Structure
Your business structure affects your legal rights and operations in Dubai. See the different business structures in Dubai below:
Mainland Companies
A mainland company lets you do business anywhere in Dubai and the UAE. You can work with government departments and local customers. In most business operations, foreign owners can own 100% of mainland enterprises.
To register, you must obtain approval from the Department of Economic Development. Also, there needs to be an actual office space in Dubai. Once registered, mainland enterprises can employ an unlimited number of workers.
Free Zone Businesses
Special economic zones known as “free zones” have their own regulations. Without a local partner, you can acquire complete control of your business.
A free zone can facilitate the hiring of foreign workers and provide tax advantages. But you can only do business with other free zone companies or outside the UAE. Compared to mainland registration, setting up is typically quicker.
Offshore Companies
Doing business inside the UAE is completely off-limits to offshore corporations. They are solely for use in international affairs. This structure facilitates foreign asset holding and international trade. Using an offshore corporation to obtain a visa is not an option. Offshore companies pay no corporate income tax.
Business Licenses and Ownership
Understanding ownership limits and license types protects your legal rights. Here’s what you must know:
Foreign Ownership Regulations
In most sectors, foreign entrepreneurs can now own 100% of mainland companies. It is still necessary to have a local partner who owns 51% of the mainland business. Foreign ownership has been fully permitted in free zones since their inception. Getting legal guidance helps you understand which ownership structure applies to your industry.
Getting a Trade License
Start by choosing a business type and structure. Choose a business name and get permits next. Make a passport copy and a business plan. You must apply to the Department of Economic Development. You can also submit to your chosen free zone. After reviewing everything, the agency may request additional details. You can legally begin operations after receiving your trade license.
License Categories and Requirements
For various business activities, Dubai provides three primary trade licenses. Business licenses are needed to buy and sell goods and run retail stores. Professional licenses cover consulting, design, and technical work. Companies that make or process materials need industrial licenses. Office space and minimum capital requirements vary by license type.
Visa and Employment Laws
Here are the Visa and employment laws that apply to foreign entrepreneurs:
Investor and Partner Visa Options
Dubai offers business owners the opportunity to obtain a resident visa through their firm. Investor visas for owners and partners can be immediately sponsored by mainland enterprises. Your visa length depends on your investment and business structure. Large investments can qualify for 10-year visas offered by some free zones.
Hiring Foreign Employees
Trade licenses allow companies to sponsor employee visas. Each visa needs the UAE Ministry of Human Resources and Emiratisation approval. Staff medical records, passport copies, and job contracts are required. Depending on office size, the government limits the visas a company can sponsor.
Labor Laws and Employee Rights
With its well-defined regulations, the UAE’s labor law protects businesses and their employees. Every employee must have a written contract that states salary, working hours, and benefits. The standard work week consists of 40-48 hours of work. Employees are also entitled to rest days and paid leave. The employer is obligated to provide end-of-service benefits to leaving employees.
Conclusion
Starting a business in Dubai requires knowledge of local laws and procedures. Choose the correct business form for where you sell and operate. Follow ownership rules and secure the right trade license for your business. To follow the right procedures, find a lawyer for legal advice. They can assist you with the complex registration steps and legal paperwork. Hiring a lawyer guarantees that you will fulfill all obligations right away.
