The Foreigner's Guide for Starting a Business in the United Arab Emirates

The Foreigner's Guide for Starting a Business in the United Arab Emirates

October 03, 2023

The Foreigner's Guide

So you have a brilliant business idea and the drive to make it happen. The only thing missing is an ideal location to set up shop. Have you considered the United Arab Emirates? This dazzling country of skyscrapers, luxury resorts, and year-round sun may seem like an unlikely place for a startup. The UAE actively courts foreign businesses and entrepreneurs. With world-class infrastructure, competitive costs of living, and a range of visa options for company owners and employees, the Emirates could be the perfect place to turn your vision into a reality.

From choosing a location and company formation to securing financing and hiring staff, this blueprint includes all you need to hit the ground running. The path to success in the Emirates is clear if you have the motivation to make it happen. 

Understanding UAE's Business Landscape as a Foreigner

As a foreigner, the UAE offers exciting opportunities to start a business. Some of the key benefits of establishing a company here include:

Tax incentives: The UAE has no corporate tax for most businesses. As an expat, your personal income is also tax-free. This can significantly lower your costs and boost profit margins.

Strategic location:
The UAE is a transportation and logistics hub connecting East and West. Its ports and airports make it easy to import, export, and distribute goods across the region.

Supportive government: The government actively encourages foreign investment and entrepreneurship. Free trade zones offer logistical assistance, funding, and fast-track visas to help you get up and running quickly.

Cosmopolitan environment: The UAE's diversity and openness to multiculturalism means you'll find talent from all over the world. Over 200 nationalities call the UAE home, so there are opportunities to network and partner with people from a range of backgrounds.

World-class infrastructure: From state-of-the-art office space to advanced telecommunications networks, the UAE's infrastructure supports business growth and success. Things like obtaining utilities, permits, or business licences are also efficient and streamlined.

Key Requirements and Permits for Setting Up a Business in the UAE as a Foreigner

To set up a business in the UAE as a foreigner, there are a few key requirements and permits you'll need to obtain.

First, you'll need to secure a business licence, which allows you to legally operate. The specific licence you need depends on the type of business. Many foreign investors opt for professional,commercial,l or industrial licences. To obtain a licence, you must register a local company, have a UAE national partner who owns 51% of the business, and meet the minimum capital requirement, which varies by licence type.

Office space: You'll need to rent office space, as you must provide an address in your licence application. Coworking spaces are popular and budget-friendly options for new businesses.

Visas: As a non-resident, you'll need a work visa to start and operate your business in the UAE. An investor visa allows you to own and run a company. Most investors hire a local 'sponsor' to help obtain proper visas and permits.

Business bank account: You'll need a local business account to conduct financial transactions. Most major banks in the UAE offer accounts for foreign-owned companies.

Additional permits: Some industries require special permits or certifications. Check with the relevant government department to determine if your business needs any additional permits.

Choosing the Right Business Structure for Your Company

When starting a business in the UAE, one of the first big decisions you’ll make is which business structure to establish. The options open to foreigners include:

Free Zone Company: If you want 100% ownership, look into setting up in one of the UAE’s free trade zones. Free Zone companies can only conduct business within the free zone but offer tax-free status for up to 50 years. 

Limited Liability Company (LLC): An LLC requires a UAE partner who holds 51% of the shares. However, they are actively involved in day-to-day operations. LLCs can trade anywhere in the UAE. This structure suits businesses wanting an active local partner.

Representative Office: If you want to explore the UAE market before establishing a full branch or subsidiary, consider a representative office. It cannot engage in commercial activities but can research the market, promote products and services, and act as a liaison. Representative offices require a UAE service agent.

Branch Office: If your company is registered in another jurisdiction, you can open a branch office in the UAE. The parent company is fully responsible for the branch. Branch offices also require a UAE service agent.

Hiring Employees as a Non-Resident Business Owner

As a non-resident business owner in the UAE, hiring employees requires some extra steps. You’ll need to understand the UAE’s labour laws and visa requirements to legally hire workers.

Sponsoring Work Visas: To hire foreign employees in the UAE, you must sponsor their work visas and residence permits. This requires applying for a work permit quota and paying various government fees. The process can take 4 to 6 weeks. You’ll need to provide details like the employee’s job title, salary, academic credentials, and an employment contract.

Emiratization Requirements: The UAE’s Emiratization programme requires companies to hire UAE nationals. The Emiratization percentage depends on your company’s size and industry. To meet requirements, you may need to create job roles specifically for UAE nationals, provide training, and offer attractive compensation and benefits. Failing to comply can result in penalties.

Labour Law Compliance: UAE labour law protects employees’ rights regarding working hours, leave, termination, and more. As an employer, you must provide things like paid time off, end-of-service gratuity, health insurance, and a safe work environment. Maximum working hours are 8 hours per day or 48 hours per week. Overtime pay may apply. Familiarise yourself with all requirements to avoid legal issues.

Tips for Managing Your UAE Business Remotely

Managing a business remotely in the UAE definitely has its challenges, but with some key tips, you can effectively oversee your company’s operations from afar.

Set up a solid local team: Having trusted individuals on the ground to handle day-to-day activities is essential. Hire an experienced general manager and administrative staff to oversee operations. Provide clear roles and responsibilities, as well as regular guidance and feedback.

Invest in top-notch communication technology: High-quality video conferencing software, project management platforms, and business phone systems will keep you connected to your team. Schedule regular calls to stay up-to-speed and address any issues quickly.

Create detailed processes and procedures: Document how to handle all parts of your business so that your team has clear instructions and you have visibility into operations when you’re away. Review and update these on an ongoing basis.

Travel to the UAE frequently: While technology is useful, face-to-face interaction cannot be replaced. Aim to travel to your UAE office at least quarterly to meet with your team, check in on progress, and make important business connections. Use your time on the ground wisely.

Stay up-to-date with compliance and legal requirements: Rules and regulations change often in the UAE, so monitor updates to ensure your business remains compliant even when you’re not in the country. Work with a trusted legal counsel and audit firm to avoid penalties or legal trouble.

Types of business licences in the UAE

The business licence you need depends entirely on your business objectives and activities. Make sure you understand all the options fully so you can choose the right one. The wrong licence could prevent your business from operating legally and incur hefty fines. When in doubt, consider hiring a business consultant to walk you through the options and application process.

With the proper licence in hand, you'll be ready to launch your business in the dynamic UAE market. But always keep the licence terms and conditions in mind to stay compliant in this highly regulated business hub.

When starting a business in the UAE, you'll need to obtain the proper business licence. There are several types of licences available, depending on your business activity and ownership structure.

Professional Licences: Professional licences are for regulated professions that require certain qualifications, experience or memberships like healthcare, education, banking, insurance, etc. The exact requirements depend on your specific profession.

Commercial Licences: For most businesses, you'll apply for a commercial licence. This allows you to conduct commercial activities like importing, exporting, storing, distributing, and selling products or services. 

Trade Licence: For trading companies importing, exporting, and re-exporting goods.

General Trading Licence: Allows a wider range of trading activities including exporting, importing, and local trading of products.

Service Licence: For service-based companies like consultants, accountants, doctors, restaurants, hotels, etc.

Industrial Licence: For companies involved in manufacturing or industrial activities.

Freelance Permit: For freelancers working in fields like writing, design, tutoring, photography, etc. Freelancers can only sponsor themselves and immediate family members.

UAQ FTZ: A great business hub for Company formation in the UAE

The UAQ (Umm Al Quwain) Free Trade Zone offers several advantages including access to global markets, state-of-the-art infrastructure, and investor-friendly environment for foreigners looking to set up a business in the UAE:

100% Foreign Ownership: One of the most significant advantages is that UAQ FTZ allows for 100% foreign ownership of businesses. This means you have full control and ownership of your enterprise without the need for a local sponsor or partner.

Tax Benefits: Businesses operating within UAQ FTZ enjoy tax exemptions, including zero corporate and income taxes for a significant number of years. This helps businesses maximise their profits and reinvest in growth.

Flexible Business Structures: UAQ FTZ offers a range of business structures to suit various needs, including free zone companies, branch offices, and offshore companies. This flexibility allows entrepreneurs to choose the setup that aligns best with their business goals.

Fast and Efficient Setup: The free zone is known for its streamlined and efficient business setup process. It typically involves minimal bureaucratic hurdles, reducing the time and effort required to establish a business.

Cost-Effective Solutions: UAQ FTZ offers competitive pricing for its services and facilities, making it an economical choice for startups and small to medium-sized enterprises (SMEs).


Can foreigners own businesses in the UAE?
Yes, foreigners can own businesses in the UAE by choosing appropriate business structures like free zone companies or establishing a mainland business with a local partner.

Is 100% foreign ownership possible in the UAE?
Yes, 100% foreign ownership is allowed in UAE free zones, making it an attractive option for many entrepreneurs.

As a foreigner, do I need a local sponsor for business setup in the UAE?
It depends on the chosen business structure. Free zone companies, like UAQ FTZ, do not require a local sponsor, but mainland businesses typically do.


So there you have it—a step-by-step blueprint for building your startup dreams in the UAE as a non-resident. It may seem complicated, but by following the key steps around business licencing, visas, office space, and banking, you'll be up and running in no time. The UAE offers an attractive base for any entrepreneur looking to tap into new markets and opportunities. With world-class infrastructure, business-friendly regulations, and a diverse, cosmopolitan population, the potential for success is huge. What are you waiting for? Take the plunge, pack your bags, and get ready to join the ranks of entrepreneurs living the Dubai dream. The UAE is open for business!

UAQFTZ is a free zone located in the UAE, and there’s no better place in the region to set up a company. You can opt for whichever licensing fast-track suits your business .Options include a Free Zone Establishment licence if you’re setting up alone, a Free Zone Company licence for up to 50 individuals and shareholders, or a licence to establish a branch of an existing company.

Business setup in UAE is easy, and in UAQFTZ it’s the simplest of all. When we say ‘simple’, we’re talking about cutting out the red tape. For example, there is no requirement for capital proof, bank letters or audit reports. You and your shareholders will not have to be physically present during the application and setup process, and the Establishment Card is free of charge.

As the company owner, you can use your existing visa, and as a visa holder you can sponsor your family. What’s more, no NOC is required to set up a company with UAQFTZ, no matter what your business is.

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