Business Opportunities in Dubai
What are the main features of establishing an import business in Dubai?
Dubai is a haven for import businesses. For anybody who wants to establish a business, or start a business venture on their own or in partnership, there are a couple of issues one should take note of:
- Dubai’s import revenue is humongous. It exceeds $14 billion annually.
- Dubai’s non-oil imports have risen sharply and there is a lot of scope for greater expansion. Dubai is becoming a hub for trading and is in turn becoming a major supplier for neighboring countries.
- With a growing number of expatriates, there is an increasing demand for ‘foreign’ food products, latest electronic goods and other high-end products. So Dubai is definitely a great market and there are plenty of opportunities for greater export trading and establishing export businesses.
- There are no stringent foreign exchange rules, quotas or conditions. The import duties are low, and many products are exempt from taxation.
- The transportation facilities from the port to warehouses are unmatched in terms of efficiency and operations. So it is easy to transport and store goods in less time thus increasing profit margins.
What are the different categories of business organizations in Dubai?
There are 7 categories of business organizations in Dubai and they are:
- General partnership company
- Joint venture company
- Public shareholding company
- Private shareholding company
- Limited liability company
- Share partnership company
Applications of Business Categories
- Partnership companies apply only to UAE citizens.
- Currently, the Dubai government does not encourage the partnership-en-commendam and share partnership companies to be established.
- Joint venture is an agreement between a foreign company/person and a local company to engage in a business. But the local equity participation in the joint venture should be at least 51%. The profit and loss sharing is decided earlier. No license is required for the joint venture. While the foreign partner deals with third parties in the name of the local partner, the local partner has to bear all liabilities until the agreement is formalized.
- A Public shareholding company is one that is engaged in banking, insurance, or financial sectors.
- Insurance and financial services firms and foreign banks can open their branch or representative offices to establish their presence in Dubai.
- A limited liability company can be launched by as less as 2 members and as much as 50 members whose liability is limited to their shares in the firm’s capital. Responsibility for the management of such company is handled by the foreign or local partners or a third party.
Setting Up Business in Dubai
Dubai is one of the best places to set up business operations. The conditions, rules and laws for the same are very liberal and attractive as compared to many other countries. Thus Dubai has established itself as a great economic force, attracting more and more organizations, entrepreneurs and investors to set up their businesses here.
There are many options for foreign or international corporations wanting to start operations or initiate new businesses in Dubai. They can start by creating a trading relationship. For many companies, there are advantages if they have a presence in Dubai to research market conditions, establish contacts, meet prospective customers, and finalize transactions and orders.
Licenses for Setting up Business in Dubai To establish any business in Dubai, a license is the most important thing. The licenses are issued by the Dubai Economic Department depending upon the nature of business. They are of three types:
- Commercial licenses - that are required for any kind of trading.
- Professional licenses - that are required by professional service providers such as, craftsmen and skilled labor etc.
- Industrial licenses – that are needed for establishing any industrial or manufacturing operation.
There are more detailed laws that apply to businesses engaged in oil or gas production. Jewelry and insurance businesses require financial guarantee issued by a bank based in Dubai.
Requisites for Business Ownership in Dubai
According to the laws established by Dubai government, at least 51% participation of UAE citizens is the basic requirement for setting up any business in Dubai.
But there are exceptions in cases if or where:
- 100% local ownership is mandatory as per laws.
- The business is being established in Jebel Ali Free Zone
- 100% AGCC ownership activities are open
- Fully owned AGCC companies enter into partnership with UAE nationals.
- Foreign companies open their branches or an office in Dubai.
- Professional or artisan companies set up their business as they are permitted 100% foreign ownership.