Top Questions We Get — Answered by Our Team at Quick Track Documents

Q: How long does it typically take to set up a business in Dubai?

A: The timeline for setting up a business in Dubai can vary significantly depending on the chosen legal entity and jurisdiction (Mainland vs. Free Zone).

• Free Zones: Generally offer faster incorporation times, with Limited Liability Companies (LLCs) potentially established in as little as 1 to 2 weeks. Some Free Zones aim for even quicker processing, with everything potentially done within one week to one and a half weeks if all medical and biometrics are completed efficiently.
• Mainland: The onboarding process for Mainland LLCs can take 4 to 8 weeks. This longer timeframe is often due to more extensive government approvals.

It’s important to note that these timelines are for the company formation itself. Additional steps like opening a corporate bank account can add a few weeks, especially for complex corporate structures. Working with an expert like Quick Track Documents can significantly expedite the process, often completing everything within one and a half to two weeks for Free Zones, ensuring it’s done correctly the first time.

Q: What are the ongoing compliance requirements for businesses in Dubai after setup?

A: Business registration is just the beginning; maintaining compliance is crucial for uninterrupted operations in Dubai. Key post-incorporation compliance requirements include:

• Obtaining an Establishment Card: This card, issued by the General Directorate of Residency and Foreigners Affairs (GDRFA), is mandatory for sponsoring employees and applying for work visas.
• MOHRE Registration & WPS: Your company must register with the Ministry of Human Resources and Emiratisation (MOHRE) to legally hire employees and manage labor contracts. Setting up a Wages Protection System (WPS) account for salary payments is also mandatory in most cases.
• Corporate Bank Account: Opening and maintaining a corporate bank account is essential for all financial transactions, including salary payments.
• Additional Approvals & Licenses: Depending on your specific business activity, you may need ongoing approvals from authorities like Dubai Municipality, Dubai Health Authority (DHA), or the Roads and Transport Authority (RTA).
• Ejari Registration: For most businesses with a physical office, registering your tenancy contract with Ejari is mandatory and a prerequisite for many other processes, including trade license renewal.
• VAT Registration & Filing: If your taxable turnover exceeds AED 375,000 annually, VAT registration with the Federal Tax Authority (FTA) is mandatory, along with regular VAT return filings.
• Corporate Tax Filing: All Free Zone entities and most Mainland businesses are required to file an annual Corporate Tax (CT) return, even if subject to a 0% rate.  
• Accounting & Audit Records: Dubai law requires businesses to maintain accurate accounting records for at least five years. Some Free Zones and sectors also mandate annual audit reports by approved firms.
• Employment Contracts & Health Insurance: All employees must have MOHRE-approved labor contracts, and providing health insurance is mandatory.

Q: How do I open a corporate bank account for my new business in Dubai?

A: Opening a corporate bank account in Dubai is a crucial step after company formation, but it can be time-consuming due to stringent regulatory and compliance requirements. Here’s a general overview:

• 1. Choose a Bank: Research banks that cater to new businesses and your specific corporate structure. Some banks offer online application initiation.
• 2. Prepare Documents: You’ll need a valid Trade License or Certificate of Incorporation, passports and Emirates IDs of all partners and authorized signatories, Memorandum of Association (MOA), proof of company address, and often a 6-month bank statement (of the parent company if applicable, or the partner if new).
• 3. Outline Corporate Structure: Clearly define your business’s corporate structure, including shareholders, directors, and managers, as this impacts documentation.
• 4. Meet Minimum Deposit Requirements: Banks in the UAE have varying minimum deposit requirements for corporate accounts.
• 5. Application & Verification: Submit your application online or in person. The bank will then verify your application and documents, often through OTP verification to registered mobile numbers.
• 6. Account Activation: Once verified, your account will be activated, and you’ll receive your banking details.

Professional assistance can streamline documentation preparation and minimize bureaucratic delays, as the process can take several weeks or even months, especially for complex structures.

Q: What are the requirements for hiring foreign employees in Dubai?

A: Hiring foreign employees in Dubai involves strict adherence to UAE labor and immigration laws. Key requirements include:

• Valid Work Visa & Emirates ID: All foreign nationals must obtain a valid work visa and Emirates ID before starting employment. The visa must be sponsored either by the employer (if licensed to do so) or through an authorized partner.
• Fixed-Term Contracts: Under the New Labor Law (effective August 31, 2024), all employment relationships must be governed by written fixed-term contracts, with unlimited contracts no longer being valid. Existing unlimited contracts must be converted.  
• MOHRE Registration: Employers must register their company with the Ministry of Human Resources and Emiratisation (MOHRE) to legally manage labor contracts and process work permits.
• Medical Examinations: Foreign workers are required to undergo a medical exam for screening of certain statutory-prescribed diseases to qualify for a residency/work permit.
• Police Clearance Certificate: Foreign workers from certain countries may need to provide a police clearance certificate from their home country.
• Health and Safety Policy: Employers must put in place a health and safety policy. Companies with more than 50 employees also need internal policies for work regulations, disciplinary measures, and grievances.
• Unemployment Insurance Scheme: A mandatory Unemployment Insurance Scheme was introduced in 2024 for all private and federal sector workers, requiring monthly contributions.  

Q: What is the process for renewing my trade license in Dubai?

A: Renewing your trade license annually is a mandatory regulatory requirement for uninterrupted business operations in Dubai. The Department of Economic Development (DED) mandates this for Mainland companies, while Free Zones have their own procedures.

Key steps typically include:

• 1. Confirm Valid Ejari Registration: For businesses operating from a commercial location, a valid Ejari certificate is essential and a prerequisite for DED license renewal.
• 2. Gather Necessary Documents: This includes a copy of your current trade license, valid Ejari certificate, tenancy contract (with at least 30 days validity from renewal date), passport and Emirates ID copies of all partners, and Memorandum of Association (if applicable).
• 3. Online Renewal: Utilize the online renewal portal provided by the relevant government authority (e.g., DED portal) to initiate the process.
• 4. Pay Fees: Pay the applicable trade license renewal fees, which typically range from AED 5,000 to AED 15,000 for Dubai Mainland, varying by license type and business activity.
• 5. Submission & Approval: Submit the completed application with all required documents. The government authority will review and, upon approval, issue your renewed trade license.

It’s advisable to renew a few weeks before expiration, as delayed renewal can lead to fines (between AED 200 and AED 5,000) and business suspension. Professional services can assist with end-to-end renewal, ensuring accuracy and avoiding delays.

Q: How do I close or liquidate a company in Dubai?

A: Closing or liquidating a company in Dubai is a multi-step legal process that varies slightly between Mainland and Free Zone entities. It involves dissolving the firm, settling debts, and distributing any remaining assets.

General steps include:

• 1. Board Resolution & Liquidator Appointment: Pass a Board Resolution or shareholder resolution to initiate liquidation and appoint an official liquidator (usually an audit firm). The liquidator must provide a letter of acceptance.  
• 2. Notify Authorities: Submit a notice of intention to close to the relevant authorities, such as the Department of Economy and Tourism (DET) for Mainland companies or the specific Free Zone Authority.  
• 3. Cancel Visas & Establishment Card: All employee visas and the company’s establishment card must be cancelled before liquidation.  
• 4. Bank Account Closure: Close the company’s active bank account and obtain a closure letter from the bank.  
• 5. Obtain Clearances & Settle Debts: Secure No Objection Certificates (NOCs) from various government agencies (e.g., Dubai Customs, DEWA, Etisalat/Du) and settle all outstanding financial obligations, including debts to suppliers, taxes (VAT, Corporate Tax), and employee benefits (end-of-service gratuity, notice period compensation).  
• 6. Publish Advertisement (Mainland): For Mainland companies, publish a closing announcement in two local newspapers to inform creditors, followed by a 45-day grace period for claims.  
• 7. Submit Liquidation Report & Deregistration: The liquidator prepares a final liquidation report, which is submitted along with other required documents to the relevant authority for final deregistration. Upon approval, a  
• Certificate of De-Registration is issued.  

The process can take several months, and costs vary depending on the complexity and jurisdiction.  

Q: What is the difference between a Local Partner and a Local Service Agent for Mainland companies?

A: This distinction is crucial for foreign investors setting up a Mainland company in Dubai:

• Local Partner (Sponsor): Historically, for many commercial licenses, a UAE national Local Partner was required to hold 51% ownership of the company, with the foreign investor owning 49%. This structure meant shared ownership and potential influence over company decisions. However, recent reforms (Federal Decree-Law No. 26 of 2020) now allow 100% foreign ownership in many business sectors, significantly reducing the need for a Local Partner for eligible activities.
• Local Service Agent: For professional licenses (e.g., consulting, services), a UAE national Local Service Agent is typically required. Crucially, the Local Service Agent does not hold any ownership stake or control over the business. Their role is purely administrative, facilitating government interactions and ensuring compliance, while the foreign investor retains 100% ownership and full control of the company’s operations and profits.

It’s vital to understand which applies to your specific business activity to ensure full ownership and control.

Q: What are the consequences of not renewing my trade license on time in Dubai?

A: Failing to renew your trade license on time in Dubai can lead to significant and costly consequences for your business:

• Fines and Penalties: The most immediate consequence is the imposition of fines, which can range from AED 200 to AED 5,000. These penalties can accumulate the longer the license remains expired.
• Business Suspension: Your business operations may be suspended, meaning you cannot legally conduct business activities. This can lead to significant operational disruptions and loss of revenue.
• Legal Issues: Operating with an expired license is a violation of UAE law and can lead to legal complications.
• Visa Cancellation: If your trade license is not renewed, it can impact the validity of your company’s establishment card and, consequently, the visas of your employees and even your own investor visa, potentially leading to visa cancellation.
• Loss of Credibility: An expired license can damage your business’s reputation and credibility with banks, suppliers, and clients. Banks may freeze your corporate account, and you may face difficulties securing new contracts.
• Increased Renewal Costs: Reinstating an expired license often involves paying accumulated fines in addition to the standard renewal fees, making the process more expensive than timely renewal.

It is always advisable to renew your trade license a few weeks before its expiration date to avoid these issues.

Q: What are the different types of business licenses available in Dubai?

A: Dubai offers a variety of business licenses, categorized primarily by the nature of your business activity. Understanding these categories is crucial for legal operation:

• 1. Commercial License: This is the most common type, issued for businesses engaged in trading activities, such as buying and selling goods, import/export, and retail.
• 2. Professional License: Required for service-oriented businesses and professionals. This includes consultancies (e.g., management, HR, marketing), accounting firms, legal services, educational services, and IT services.
• 3. Industrial License: Necessary for companies involved in manufacturing, industrial production, and processing activities.
• 4. Tourism License: For businesses operating in the tourism sector, such as tour operators, travel agencies, and hotel management.
• 5. E-Trader License: A specific license for freelancers and small-scale entrepreneurs operating online from home, allowing them to sell products and services via social media platforms.  
• 6. Dual License: Allows Free Zone companies to also operate on the Mainland, typically through a branch office, combining the benefits of both jurisdictions.

Each license type has specific prerequisites, approval processes, and associated costs, and may require additional approvals from relevant authorities depending on the specific activity.

Q: What are the key benefits of outsourcing PRO services for ongoing business operations?

A: Outsourcing PRO services offers significant advantages for businesses beyond just initial setup, contributing to long-term operational efficiency and peace of mind:

• Proactive Compliance Management: PRO firms provide timely reminders for all critical renewals (trade licenses, visas, establishment cards) and stay updated on evolving regulations (e.g., Corporate Tax, Labor Law changes), ensuring your business remains compliant and avoids penalties. This “zero risks” approach prevents unexpected complications.
• Time and Cost Efficiency: By handling complex, multi-step government procedures, PRO services save your internal team valuable time and reduce operational costs associated with in-house PRO staff, repeated trips to government offices, and potential fines from errors.
• Expert Liaison with Authorities: PRO firms maintain close relationships with various government departments (DED, GDRFA, MOHRE, Dubai Municipality), expediting processes and reducing wait times for approvals and clearances.
• Secure Document Management: They treat all your sensitive documents with the highest levels of confidentiality and care, ensuring secure handling throughout every stage of the clearance process and safeguarding against fraud or loss.
• Strategic Advisory: Beyond administrative tasks, PRO firms often act as consultants, offering valuable advice on optimal company structures, navigating activity changes, and efficiently engaging with government processes, contributing to your business’s strategic growth.