7 Steps How To Open a Company in Dubai

Step 4: Hire Employees

One of the most important steps in setting up your business in Dubai is hiring employees. There are several key things you need to know when it comes to hiring in Dubai:

Labor Laws

The UAE has a set of labor laws that govern the employer-employee relationship. Some key aspects include:

• Minimum wages – There is a government-set minimum wage that must be paid to employees based on their qualifications. This varies but is around AED 2000 per month for unskilled laborers.

• Working hours – The maximum working hours are 8 hours per day, or 48 hours per week. Employees are entitled to breaks and time off.

• Leave – Employees are entitled to annual leave, sick leave, maternity leave, etc as per UAE labor laws. The number of leave days depends on factors like years of service.

• End-of-service benefits – Employers are required to provide end-of-service benefits (similar to severance pay) to employees when their employment ends. This is calculated based on duration of employment.

• Worker safety – Extensive health and safety rules govern worker safety and workplace conditions. Employers must comply with all requirements.

Visas

To legally work in Dubai, expats require an employment visa sponsored by their employer. Key aspects:

• The employer is responsible for visa costs, medical insurance, etc. This cannot be passed to the employee.

• Work permits must be obtained from the Ministry of Human Resources & Emiratisation.

• The visa process can take 2-4 weeks and requires extensive documentation, including educational certificates, medical tests, Emirates ID registration, etc.

• Visa rules differ for certain jobs and nationalities. Free zone companies have separate visa quota requirements.

Hiring Process

When hiring in Dubai, follow these best practices:

• Define the job role, qualifications, compensation, etc clearly.

• Advertise on relevant platforms to source candidates locally and globally.

• Screen applicants carefully based on credentials and conduct interviews.

• Be thorough in background verification before making offers.

• Ensure all paperwork (offer letter, contract, etc) complies with UAE Labor Law.

• Coordinate with PRO to complete visa formalities and paperwork.

• Conduct new employee orientation on policies, benefits, etc.

With the right hiring process, you can build an excellent team to drive your business success in Dubai.

Step 5: Open a Bank Account

Opening a business bank account is a crucial step when setting up a company in Dubai. The process can vary depending on the type of legal structure you choose and the requirements of each bank. Here are the key steps to open a business bank account in Dubai:

Choose a Bank

Research different banks in Dubai to compare account features, fees, and options. Popular choices include Emirates NBD, Mashreq Bank, HSBC, and Commercial Bank of Dubai. Consider a bank’s reputation, services, and branch locations when deciding.

Gather Required Documents

Banks will require documents such as your business license, Memorandum of Association, passport copies of owners/partners, proof of address, and more. Requirements can vary, so check with the bank first.

Complete Account Application

Fill out the business account application form either online or at a branch. You’ll need to provide details about your company, owners, expected transactions, and more.

Make a Minimum Deposit

Most banks require a minimum deposit to open the account. This can range from AED 10,000-50,000 depending on the bank. Ensure funds are available for the initial deposit.

Finish Account Set-Up

After submitting all documents and making the deposit, the bank will finalize the account opening. This may take a few days. You’ll receive account numbers, cards, checks, online banking credentials, etc.

Register for VAT

If your business exceeds the VAT registration threshold, register for VAT with the Federal Tax Authority and provide details to the bank.

Link with Payment Systems

Connect your account to payment services you plan to use like merchant accounts, PayPal, credit card processing, etc.

With the proper paperwork and preparation, opening a business bank account in Dubai can be straightforward. Choosing the right bank and account to suit your business needs is key.

Step 6: Finalize Legal Paperwork

Finalizing the legal paperwork is a crucial step in setting up your business in Dubai. This involves drafting key business contracts, establishing shareholder agreements, and other formal documents.

Some of the key legal documents you’ll need include:

• Shareholder Agreement – If you have business partners, a shareholder agreement is essential to define ownership stakes, voting rights, profit/loss distribution, roles and responsibilities. Make sure to work with a lawyer to ensure agreement meets all legal requirements in Dubai.

• Partnership Agreement – For partnerships and limited liability companies (LLCs), a partnership agreement is required. This will outline ownership percentages, distribution of profits/losses, partner roles, decision making, etc.

• Leases – If renting office space or equipment, be sure to have thorough lease agreements reviewed by legal counsel. Define terms like duration, rent fees/increases, security deposit, maintenance, etc.

• Employment Contracts – Even if hiring just one employee, have an employment contract template prepared. Outline compensation, benefits, policies, grounds for termination, confidentiality clause, and more.

• Vendor, Supplier, & Service Agreements – Draft agreements with vendors, suppliers, service providers and any external parties you’ll do business with. Detail payment timelines, service levels, quality control, and other expectations.

• Non-Disclosure & Confidentiality Agreements – For any partners, employees, or external parties privy to sensitive company information, have NDAs and confidentiality agreements signed. This protects your intellectual property and trade secrets.

Don’t forget ancillary documents like company bylaws, operating agreement, and articles of incorporation or formation. Be sure all paperwork complies with Dubai legal requirements. Work closely with a reputable attorney to finalize legal paperwork and protect your business interests in Dubai.

Step 7: Obtain Certificates & Permits

After securing your trade license and establishing a legal business entity in Dubai, there are a few additional certifications and permits you may need depending on your specific business activities.

• If you plan to import or export any goods, you’ll need to register for an Import/Export Code (IEC) from Dubai Customs. This allows you to import raw materials and export your finished products.

• For businesses in certain regulated sectors like healthcare, education, tourism, and transportation, you may need additional permits and qualifications. Make sure to check with your local Dubai authorities on any industry-specific requirements.

• If your business has a physical retail or office location that will host customers or employees, you must obtain a Public Health & Safety Certificate. This ensures your premise meets occupational health and safety standards.

• You may also need various other operational permits depending on your business activities, such as food handling permits if you’ll be preparing or serving food on-site. Your business setup consultants can advise you on any additional certificates needed.

The final step is obtaining all legally required permissions so your new company can operate fully compliant in its industry. With the proper certificates and permits in place, you’ll be ready for a successful commercial launch in Dubai!

Key Takeaways for the 7 Steps for Success

To open a company in Dubai, requires careful planning and preparation. Here are some of the key takeaways:

• Choose the right business structure for your needs – sole proprietorship, LLC, branch office, etc. Consider implications for ownership, liability, taxation, and setup processes.

• Obtaining a trade license and registering with DED is essential. Work with a setup company or consultant to navigate requirements.

• Secure office space before finalizing registration. Lease or purchase suitable premises for your business activities.

• Hiring employees requires sponsorship, visas, contracts, and more. Consult resources like the DED to ensure full compliance.

• Open a business bank account to keep your finances separate. Comparison shop to find an account with favorable terms.

• Finalize all legal paperwork for your business structure. Record articles of incorporation, memorandums, shareholder agreements, etc.

• Acquire certificates, permits, and memberships relevant for your industry and business activities. This may include municipal certificates, trade permits, chamber of commerce membership.

• Allow plenty of time for the multiple steps involved. Be prepared for back and forth with government departments. Seek expert guidance to avoid pitfalls.

With proper planning and preparation, the business setup process in Dubai can successfully position your company for the future. Partnering with an experienced consultant eases the journey.