May 19, 2024

Starting a New Business in the UAE

Mini guide to starting a business in the UAE

Starting a New Business in the UAE

This article has been provided by Sirius, a private office for entrepreneurs.

Setting up a business in the United Arab Emirates (UAE) can be an exciting venture. The UAE offers a thriving economy, strategic location, and a competitive environment that can be conducive for business growth.However, starting a new business in the UAE requires careful planning, understanding of the local market, and compliance with legal requirements. This guide will provide you with a comprehensive understanding of the process involved.


Understanding the UAE Business Environment

The UAE is a federation of seven emirates, each with its own ruler. The federal government controls foreign affairs, security and defence, while each emirate has jurisdiction over regulatory and administrative matters. This unique structure influences the business environment and should be considered when planning your business.

With its strategic location between Asia, Europe, and Africa, the UAE serves as a global trading hub. The country boasts world-class infrastructure, a robust economy, and a high standard of living. These factors make it an attractive destination for entrepreneurs and investors.


Business Culture in the UAE

Understanding the business culture in the UAE is crucial for success. The UAE business environment is heavily influenced by Islamic traditions and Arab customs. Relationships and trust play a significant role in business dealings. Therefore, investing time in building relationships can be beneficial.

Moreover, the UAE is a highly competitive market with businesses from around the world. To succeed, businesses need to offer high-quality products or services, competitive prices, and excellent customer service.


Legal Framework for Starting a Business in the UAE

The UAE offers various legal structures for setting up a business. These include Sole Proprietorship, Partnership, Limited LiabilityCompany (LLC), and Free Zone Company. The choice of legal structure depends on factors such as the nature of the business, ownership, and capital requirements.

Foreign investors can own 100% of their business in Free Zones, which offer tax benefits and customs duty exemptions. However, outside Free Zones, a local sponsor, who owns 51% of the business, may still be required depending on the type of business e.g. a bank.

Business Licensing in the UAE

Obtaining a business license is a key step in starting a business in the UAE. The type of license depends on the nature of the business. The three main types of licenses are Commercial, Professional, and Industrial.

The licensing process involves submitting the required documents, paying the fees, and obtaining approvals from relevant authorities. It's advisable to seek advice to ensure compliance with licensing requirements.


Steps to Start a New Business in the UAE 

Starting a new business in the UAE involves several steps.These include business planning, choosing a legal structure, obtaining a business license, and setting up your business premises.

It's important to conduct thorough market research to understand the demand for your product or service, competition, and target audience. This will help you develop a solid business plan that outlines your business goals, strategies, and financial projections.


Choosing a Location for Your Business

The location of your business can significantly impact its success. Factors to consider include proximity to customers, suppliers, and competitors, accessibility, and cost. Free Zones can be an attractive option for foreign businesses due to their benefits.

Once you've chosen a location, you can proceed with setting up your business premises. This involves leasing or purchasing property, setting up utilities, and obtaining necessary permits.


Recruiting and Managing Staff

Recruiting the right staff is crucial for your business success. The UAE offers a diverse workforce from around the world. However, employment laws and regulations should be followed when recruiting and managing staff.

Once your business is set up, it's important to manage it effectively. This involves managing finances, marketing your products or services, providing excellent customer service, and continuously improving your business processes.



Starting a new business in the UAE can be a rewarding experience. However, it requires careful planning, understanding of the local market, and compliance with legal requirements. With its favourable business environment, strategic location, and competitive market, the UAE offers ample opportunities for entrepreneurs and investors.