cost to establish new license in dubai

Almost actual, yet approximate cost and Procedures to establish a new business in Dubai

When I speak about cost, I actually mean different elements of it

1. Licensing /operational permit cost of a business

 2. Cost of making physical office (rent, fit out, decoration)

 3. Cost of manpower (how many employees to be hired)

 4. Marketing cost to enter in local market.

Before providing you a cost estimate I would like to define all the procedures/steps for establishing new license

Procedures to establish a new business

Cost of making new license vary depending on the activity and legal form of the license to register. Detailed procedures/steps and costs related to them to establish/register a new license is as under:

Trade Name

Select a name of your license; keep different options for the name as you cannot just keep any name of any new license. You have to get it approved from department of economic development, department is the sole authority to give you approval for your decided business name. Name can be rejected due to following reasons:

Name already exist in the market under registration of department

Name is not sufficient to be allowed

Name does not match with the activity to be performed under it (a company in a business of trading products choose a name like products services is not appropriate and allowed. It must be something like products trading. Service means repairs maintenance e.t.c and trading means buying and selling)

Documents required to reserve a trade name

Passport copies of all the partners, their visa/residential status, emirates ids of resident partners, and some chosen names

Take all the papers and names list to tasheel  or ontime office and they will register your trade name under DED (department of economic development) . You can also reserve a trade name online if you have an online eservices id of DED

Initial Approval

initial yet very important step of registering a license, under which the capability to get in the license of all the partners is seen, their background checks if any, security checks if any, objections if any, NOCs if any.  This also is the step where a separate personal identification number is been allotted to every partner, which in future represent them everywhere. This is the process where legal form of the license is been defined (LLC, Sole Establishment, Civil Company)

Initial approval can be rejected due to following reasons:

One of the partner including local UAE National partner (which is a must for every mainland license) having any issue with government, any fine, any objection

One of the partners having any criminal record any pending case

Documents required for an initial approval

License Application typed and signed, Passport copies of all the partners, emirates ids if any, family book of local partner, visit visa copy if one partner is on visit visa, NOC letter from the company in which any partner already working as employee, stating that  company don’t have any objection if its employee get in the license as investor/partner/owner

Take all these documents to tasheel or ontime office anywhere in dubai and get done with your initial approval. Initial approval can also be issued before selecting any trade name of the company

Stamp

A company stamp can be made after trade name and initial approval, which is required at the time of issuing license and further on every transaction of license with departments. Copy of trade name, initial approval, and copy of local partner’s emirates id is enough to get a stamp. Not every typing center issue stamp, you can get it urgently in 30 minutes, from presto offices in tawar center, minutes shops in mirdif city center and deira city center malls. A P.O.Box number is also required on a stamp, which you can get from emirates post office by showing them copy of your initial approval paper and trade name

Court papers Typing

After trade name and initial approval, comes the step to make an agreement about the company, and between partners according to the legal form of the license to be register.

For LLC (Limited Liability Company) llc agreement is been made which defines all the information regarding company, details about the owners/partners/manager of company, profit and loss distribution in the license, ownership distribution of partners. A sample llc agreement is attached in the photos for a better idea about it.

For Sole Establishment (company owned by a single person), if the company is to be registered under 100% owner ship of UAE National than there is not any agreement needed to be signed or made, if the company is to be registered under 100% ownership of expatriate partner (partner who is not UAE National) than a Service Agent Agreement is to be made defining that local partner is only a service agent of the company and for it he will be paid a fixed amount annually.

For Civil Company (company owned by more than one expatriate partners) two agreements are to get typed, one agreement called partnership agreement which define ownership and profit & loss among all the expatriate partners and second agreement a service agent agreement between local partner and expatriate partners (same as under sole establishment case)

Documents for Agreement

Copy of trade name and initial approval, passport & id copies if any, take these papers to any of the typing centers in dubai and they will type and print it and furthermore will get it attest from a legal translator if the agreement is been typing in English and Arabic both. If agreement is only in Arabic language, it does not need to be attested from legal translators. Normally 4 sets of one agreement are made, as one original set is been kept by notary public department for records, one set is required for DED department at the time of issuing license, one set is to be with local partner and one set with all other partners.

Notary Public (Normally knows as Court)

After the typing of agreements all the partners need to get this attested by Notary Public Dubai Courts commercial section. All the partners are first required to personally get present in front of judge and sign the agreement, after sign the agreement is to get stamped from notary public section by paying the fee of notary public which the judge write on while taking signs from all the partners.

 

Ejari / Tenancy Contract of office

Partners can get an office space on rent after initial approval, going through court agreement is not necessary for getting an office. After taking office space, make the tenancy contract under the name of company and register its ejari with land department dubai. Ejari is a must to register every tenancy contract in order to further use it in your license; normally the landlords or their agents assist in making tenancy contracts and get them register for ejari

License

After trade name initial approval, court and ejari comes the step to get the license printed from Department of Economic development (DED). Take the application typed for initial approval, trade name, initial approval, one set of original notary public agreement and ejari to tasheel, ontime or directly to Economic department office. They will check in the system all the papers and after on if no objection, will issue payment voucher for issuance of license. This voucher can be paid in bank, post office tasheel department and even online using a credit card. After paying the fee they will issue you license

All above mentioned steps were to get the license, after the license every new company/license is to be registered with two main departments, immigration and labor department. This registration is done through establishment cards (immigration establishment card & labor establishment card)

Immigration establishment card

This card is a registration of every new company with immigration department to issue visas (investor, employment) under sponsorship of company.

Documents required for immigration establishment card

Application (available at every typing center), License copy, agreement copy, ejari copy, copy of passport, emirates id for all the partners who are to put their name in the card with their signs, so in future they can issue visas from immigration by signing any of the partner who are on the card, and location map (even a drawing by hand) of the company showing where your office is situated in dubai

Visit visa holders cannot add their name in immigration card; they first have to change their visa to investor/partner only than their name can be added to immigration card. This card is a must to get eligible to issue any visa from immigration on the license

After typing of card application stamp it using company stamp, take signature of all the partners who are to be in card on the back side of card under their names, local partner is to sign on both of the sides of application card (front with stamp, and back side under his/her name). Take all mentioned documents to immigration department jafliya, go to establishments section in section 2 of jafliya and they will issue your immigration card

If you need to get investor/partner visa of all or any partner you don’t have to go through labor establishment card (which is to open employment visas with labor department), after getting immigration card you can apply for partner visa (get entry permit application typed from any typing center, seal it with company stamp and get the signature of any of the partners among those who are in the immigration establishment card, attach license copy, immigration card copy, passport copy of partner who’s visa is to get, visit visa copy if the person is on visit visa, cancelation paper copy if the person canceled his old visa and transferring to partner visa, court agreement copy)

Labor Establishment Card

After being done with immigration card, comes the final step of company formation which is labor card to get your company register with labor department so in future you can hire employees.

Labor card in fact labor department is most critical element of every company established in dubai, there are many formalities and procedures for it. It is not as simple as immigration card to add names of every partner on the card so every partner gets the authority to represent the company with labor department, every partner who wishes to add his name in labor establishment card also called labor file of company, needs to go through an undertaking from local UAE National partner in court, this undertaking is called (iqrar tahood, taukeel iqrar) in English form 2 (a sample is attached for your reference in images)

Documents required getting labor establishment card

Application card typed from any typing center, license copy, passport copies, emirates id copies of all the partners who are to be in the card (form 2 from court is must for every expatriate partner to have authority to sign in labor department if only local’s name is to be in the labor card than there is not any need to go through the undertaking), agreement copy, location map issued by department of municipality (check the landlord or agent from whom you have taken office for a location map) or you can submit a hand drawn copy of location map, immigration establishment card copy, sign and stamp of company

Take all the documents to tasheel center, buy an e dirham card (in tasheel department almost every transaction of labor you need an e dirham card) deposit some money in it, go to any counter with token submit all the papers. Tasheel department will put your transaction by issuing personal number of local sponsor and all other partners who are in labor card, you will then have to take all these papers to labor main office in AL Qusais for the activation of your new labor file. Labor department will allot a number to your company which will represent you for all your transactions with labor.

These are almost all the basic procedures every new license goes through, obviously there are other complications as well according to the chosen activity of any license to start, there are some specific approvals required for specific businesses which we will clear in other posts. And I definitely cannot post all the concerned details in only one post, is why consider this a basic but detailed procedures summary to establish a new license in dubai U.A.E