Starting Your Software Company in Dubai
Written by Roman on May 20, 2007 – 10:47 pm
It is actually pretty easy to start your own IT company in Dubai. There are basically two options:
1). If you want to start your own company in Dubai or any other Emirate in UAE, you would need to have a local sponsor. This is a guy, who is citizen of United Arab Emirates and who, by law, will own 51% of your company. Normally, there are legal regulations that restrict this person from making any decision or affecting your company daily work. You simply pay this guy a certain amount like $3’000-4’000 per year for the sponsorship. As we knew later, this way to start might have very large advantages if your sponsor is an active guy with contacts and he can open many doors for your business. But as a standard case, you will see your sponsor once a year to pay him his money. I heard scary stories about dishonest sponsors, who had cheated the real company owners taking all their money, but I am not sure if it is true or just rumors.
At the moment we started the company this option was not considered seriously – giving somebody 51% of our company sounded just wrong.
2). Option 2 is to open the company in one of the Free Zones in UAE. This is the only way to open a company in UAE and own it 100% for the foreigners. Since we wanted to open IT company, the logical choice was Dubai Internet City. The procedure of getting the Trade License was pretty formal: they asked us for the business plan, certificate about our education etc. I guess they could deny our application at any step, but fortunately we finally got the license. Maybe later I can tell in more details how the whole procedure of license issuing looked like.
Another interesting opportunity opening the company might be to go to Ras Al Khaimah Free Zone. It is much cheaper to open the company there, and if you plan working alone you can easily do it from home as your virtual office will be in the Free Zone anyway. This way you might save some cash on your office space.
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November 6th, 2007 at 9:16 pm
Can I work from France and register my company in Dubai ?
November 6th, 2007 at 10:08 pm
To start company in Dubai or UAE you would need to stay here at least until you get a license. It might take you some weeks. As citizen of France you get 60-days visit visa automatically on arrival, so it would not be a problem.
After you have our license, nobody really cares where you are located as you can send cheques for your license extension by post. In this case Ras Al Khaimah Free Zone is better option than Dubai.
November 17th, 2007 at 2:23 am
Hi there, very interesting read your blog.
I had a question, when you register your business in RAK, I read on their site you are only allowed to carry out business within the zone. Outside, ie. in Dubai you will have to work through an agent.
How does that work for you? Which license did you exactly register?
Many thanks
Robert
November 17th, 2007 at 9:00 am
Robert - I think you may carry your business outside the zone, depending on what you do. If you are in software, and you do not need to have a proper office in Dubai, then you can simply work from home, nobody cares as you have an official office desk in RAK. I have several friends who work like this.
If you need to have an office in Dubai, then you have two options:
1). Get branch license in Dubai - it will allow you to rent an office in Dubai.
2). Close your license in RAK and open in Dubai Internet City, if you are in software too. This is where we have a license now.
January 19th, 2008 at 12:03 pm
Hi gud to see all the infromation in here,,,iam thinking my ways to initaite something in dubai at the moment,i have was working out couple fo things but not into a final stage so just thought of seeking some infromation from the net,and happy to see some useful stuff,i want to start something small to get a feel of how it goes and then proceed further,letsee how it goes…
January 19th, 2008 at 12:51 pm
Lishoy, good luck with your new venture!
March 12th, 2008 at 7:16 am
Hi ,
I have a customer from abu dhabi who needs a website created. My business is registered in India.
They have an association of some sort and need a website like a forum. Do I need a trade license to accept this project ?
They will own the website, i will only be maintaining it.
thanks !
poornima
March 13th, 2008 at 2:01 pm
Any company in UAE may purchase a service from another company in any other country. If your customer from Abu Dhabi purchases the web site development to the company in India, then you just do your job in India paying all your taxes over there. Your customer may have transferred your payment from UAE to India then.
Btw, double check how they will pay you as it is pretty common that companies have difficulties making bank transfers abroad for some reasons.
March 30th, 2008 at 5:35 pm
Dear Sir,
We are a Textile Mnaufacturing unit in India and we want to open our office in Dubai/ Free Zone to sell our products globally. We intend to sell to European and other Asian countries from there. Can you advise what would be BEST option available to us? Also, please help us with how can proceed and who can help us get all the licence?
Await your kind reply!!
Kirttee Khaitan
March 30th, 2008 at 5:56 pm
Kirttee Khaitan - there are several options in Dubai and UAE for companies like yours to open an office. It depends on your ambition and how much you plan to invest. In Dubai it is more expensive, but more presticious for your customers in the Middle East. In other areas of UAE it is cheaper, but sometimes customers have concerns if you hold a license from “the middle of desert”.
Send me e-mail to roman dot konovalov at gmail dot com, I will update you with more details.
April 14th, 2008 at 2:19 pm
Hi Roman,
I trade in the stock and forex markets and am looking to buy a property in dubai to get a resident visa. i can open a bank account and trade online.. do i need to get a license ??
Thanks in advance..
April 15th, 2008 at 11:36 am
If you stay in Dubai living in your house and trading online on behalf of your personal name, then probably you wouldn’t need any license.
If you want to trade as a company, then you need to have a license to get a company registered and get company bank account.
In any case, it is better to ask for more details the lawyer here in Dubai, or consult with the Business Council of your home country in UAE.
April 23rd, 2008 at 4:41 pm
Hi roman ,
first of all thank you for the info published here.well we r a software co in india and planning to market our products in dubai and other areas.we have almost finalised to open a virtual office in RAK freezone i have the foll doubts
1) using this license we can market our products anywhere in UAE ?
2) Market for IT in dubai ?
3) If we intend to sell our products to local clients,then do we need to appoint local agents ?
April 23rd, 2008 at 4:58 pm
Hi parag,
1 - yes, you can market and sell your products in UAE as long as it is allowed by your license. Normally you get a license for certain activities.
2 - didn’t get the question. Market for IT in Dubai what?
3 - you can sell yourselves as long as you have somebody on place to meet with the customers, provide the support and company bank account in UAE. It’s up to you if it agent, partner or your branch office in UAE.
April 24th, 2008 at 1:08 pm
Thanks a lot for the reply.. i meant the software market potential in UAE ?…
April 24th, 2008 at 5:42 pm
parag, you are asking questions that are too general. It depends on your niche. As an example, if you are working on IT consulting and custom software development, I would really think twice before stating this business. Also I think that you would learn the market potential for your niche much longer before you even started spending money for opening a company here.
Otherwise the software market potential in UAE is OK
May 10th, 2008 at 2:57 am
Hi, maybe you can help me…
I own a company of air conditioning and climatization in Portugal and i would like to open one of the same kind in Dubai, but i don’t know where should i go to get the information of how to do it!
Should i speak to a embassy or any other place?!
Do you think that is viable to open in Dubai a company like mine?!
Thank you…
May 10th, 2008 at 10:10 am
Nuno - embassy is definitely the right place to start from.
Otherwise, if you want to own 100% of your company in UAE, you might think about Ras Al-Khaimah Free Zone (http://www.rakftz.com/) or Jebel Ali Free Zone (http://www.jafza.ae/).
UAE is pretty warm place, so I guess that air conditioning business would work fine here. But you understand that competition would be tough and you would make a proper market research before you start here.
As an option, you might probably think about local partners and distributors on the market to avoid the headache with opening your own office in UAE.
May 11th, 2008 at 3:32 am
Thanks for the quick reply.
Now i have onether question!
I own these company but i can open in UAE another kind of business diferent of that i own.
In your opinion what are the best business we can open there whitout a large quantity of money?
May 11th, 2008 at 8:41 am
Nuno - do you mean business other than air conditioning? Any kind then. It is like in any part of the world, you can open any company here. Required investments depend on what exactly you want to do, so it is difficult for me to answer such very general question.
May 19th, 2008 at 4:57 am
Hi there,
We are looking at setting up on a free zone in Sharjah.
would you know if we can trade freely between other free zones since the free zones are not part of the UAE?
May 19th, 2008 at 9:57 am
Hi Steve,
Yes, you can freely trade between other free zones as well as within entire UAE. The only thing is that you might need to pay 5% tax on goods you import into the country.
May 22nd, 2008 at 11:07 pm
Hi Roman,
Good blog, I’m glad I found it.
I’m interested in exploring your reply to parag in which you stated “…if you are working on IT consulting and custom software development, I would really think twice before stating this business”.
My plan was to start operating as a free-lance high end IT strategy consultant in Dubai and eventually develop that into a business following a particular consulting business model I’m working on. I would be a UK registered consultant to begin with whilst I established the company / acquired the licence.
My query is two-fold:
1. Am I correct in assuming I can work from the UK whilst I set up the company?
2. Why do you warn about setting up a consultancy - is the market saturated or is the licence difficult to acquire?
Thanks
May 24th, 2008 at 9:32 am
Hi Simon,
Thank you. Answering your questions:
1). Yes, you can. In this case your customers from UAE would pay you as you were a normal foreign company from abroad. In our practice it’s might be difficult sometimes though. As an example, we recently got a customer in Saudi Arabia, and they refused to pay as bank transfer to our account in Dubai. Instead, they preferred to pay to a local company that was our agent in the country, and then the agent transferred money to Dubai.
Another issue is how you would find your customers if you stay in UK? It might probably work if you, for instance, have good relationships with any UK company based in Dubai.
You actually can stay in UK and set up the company here if you get somebody in UAE who will do all the setup work. There are many companies that can help with that. The best option for you is probably to ask British Business Council in Dubai to help you with it. If they can’t, they would at least point to the right firm that could help.
2). I mean that market is saturated, especially by cheap guys from the Subcontinent. Unfortunately, people in this part of the world do not always understand they get what they pay for, but I hope it will be changed in the future.
Although it is not easy to get IT consultant job here, sometimes it might work very well. I know a guy from Germany here in Dubai, who didn’t even think about starting up his own company until he got asked to help with some IT stuff to another German company. Now he works with German companies only setting the German rates for his work, and business seems to go very well.
I believe you will not get any difficulties with getting license with your consultancy; it would be ok to acquire.
May 26th, 2008 at 8:05 am
Hi Roman,
Real cool blog! Well, I have a question.
I recently started a Manpower Consultancy Service here in Bangalore, India. We basically place specialized Beauticians and Hairdressers in some of the top saloons here in India.
We plan to come to the Free Zone there and set up a branch office so that we could place beauty professionals working not only here from India but globally. I need to contact the Beauty saloons there and find out the requirements though.
1. How can I find out the requirements first? Should I come on a visit visa and explore and then make my decision?
2. Which free zone would you recommend I set up my branch office?
Any suggestions???
Warm Regards,
Arun Matt
May 27th, 2008 at 2:51 pm
Hi Arun,
I am in software business, so I don’t want advising your for the area I have no knowledge about. Definitely, visit to UAE will answer many of your questions. As an options for setting up a company you might consider Ras Al Khaimah Free Zone or Jebel Ali Free Zone.
Good luck,
Roman
May 29th, 2008 at 3:10 pm
Roman, first of all..As I read this page I could not stop but admire your patience and genuine responses.
I am shiv..into organisational behavior..
I want international exposure..so I want to come and live in Dubai..
Does budying a property in Duabi, lets say a studio, atumoatically qualify me to a residence visa..?
If yes, is the process easy and quick?
Or should I approach any agents/lawyers for the same..?
Please do answer..and thanks roman
May 30th, 2008 at 10:36 am
Hi Shiv,
Yes, if you buy an apartment in Dubai, you will get residency automatically. As far as I know this process is not much different than getting visa from your employer. Any real estate agency you chose to buy an apartment from would be able to explain you details of the process.
June 10th, 2008 at 9:41 am
Dear Roman,
I want to open Software Company in UAE, as you suggested RAK Free Zone is the right option. However I need few clarification from you.
1. Local sponsorer required or not.
2. How much I need to pay to open the company (virtual office)
3. What will be the renewal cost . What will be the renewal period.
4. Will I get work permit VISA.
5. Shall I sponsor for my employee. If Yes how many.
Advance thanks and regards
Perumal.G
June 10th, 2008 at 12:12 pm
Perumal,
My answers are below:
1. No - RAK FZ will be your sponsor in case you open your company there.
2. Last year it was arong 30,000 AED including the first year license and all your visa fees.
3. About 15,000 per year for your license.
4. Yes, you will get work permit in UAE.
5. Yes, you shall sponsor my employees. Opening a company in Free Zone will give you couple more visas for your employees. The exact number of visas you request will depend on how large office space you will need. In case you ask for a virtual table I doubt if you get more than one extra visa. It’s logical - where your employees will work if you have only one table that is even virtual?
I believe that sales guys at RAK FZ will be able to answer your questions in more details.
June 12th, 2008 at 5:08 pm
Dear Roman,
Thanks a lot for your response.
Regards
Perumal.G
June 14th, 2008 at 11:39 pm
Hi Roman,
I am from India I have a doubt on some Queries, If i started an IT firm or something else. in RAK
1) Is it compulsory to have I hold Graduation.
2) Is it need correct business take part in there I mean i have business in India so can I do virtual business for Accounting purpose I hope u got it.
3) Is it more complicated Law and regulation to setup a company and have more complicated things to use that company for Accounting purpose in India.
Please reply me
June 15th, 2008 at 8:10 am
Hi Ramu,
These are my answers:
1). I am not sure if you have to have certain education. They ask for your CV, but as far as I know they do not ask for a copy of your diploma.
2). Sorry, I am not sure I understand what you mean
3). I am nor familiar with rules and regulations in India, so it is difficult for me to compare. What I can say that it is more difficult than in Sweden where you can open your own company over the Internet. But still it is not very complicated in UAE either, the whole process is pretty straight forward.
Good luck!
June 15th, 2008 at 10:36 am
Hi Roman,
I mean is it need to perform actual business in the company when I starts a company in UAE. Or else can I make fault business i mean cash flow by writing down some bills by my own so i can use it for my business purpose. By that way can I show business turnover in UAE ?
Thanking you
June 15th, 2008 at 11:32 am
Hi All,
Am planning to start up as a freelance recruitment consultant.Need to know the following:
1.Should i get a license?
2.Do i need to register somewhr??
Please provide me with the complete details.
Regards,
Ezhil.
June 15th, 2008 at 12:31 pm
Ramu - theoretically, nobody cares if you do any real business in UAE or not. I know that Free Zone might ask you about your financial statements but I’ve never heard it ever happened in reality.
The reason why they do not care much about your business is that you have to pay your license fee and rent (even for virtual table) early. Also, you must keep a certain amount cash on your bank account, unless you do not want paying certain charges to the bank.
If you don’t pay those fees and charges, then - as everywhere else - your company might get closed and your visa might get cancelled.
June 15th, 2008 at 12:33 pm
Ezhil - are you talking about UAE? If yes, then you must have a license, and I guess Free Zones might be an option too. I am in software business, so sorry that I have no idea how it works with recruitment.
June 26th, 2008 at 8:39 pm
hello sorry i wanted to know whats the procedure of setting up a new company in dubai. i currently have a business of premium audiotext setup under my personal name . i wanted to setup a company in these freezones and have my payment recieved from eu usa canada and south america to a company bank account in dubai from where i can tranfer to various account globally. how much will it cost me to setup this kind of company . i dont need an office there or any employees . just need a company name and bank account to recieve my revenu and make payment to the businesses i work with. i currently live in pakistan and the situation here is kind bleek business wise so any tip will help. thank you
June 26th, 2008 at 8:45 pm
As I wrote above, to setup a company in RAK Free Zone (about 100 km from Dubai), it will cost near 30,000 AED the first year, and near 15,000 every following year.
But I believe you would need to visit UAE to setup this company, or ask somebody here to arrange it for you.
July 15th, 2008 at 6:52 am
Hi mr.Roman! As for the start, I would like to thank your generosity in helping to answer these question!
There goes some more:
I´m an manager in a software company here in Brazil, and we were thinking about opening an office overseas at UAE for the purpose of avoiding the excessive taxation in our country (27% +).
The company would mainly act as a “interface” between the company in Brazil and our clients troughout the world.
Quetions:
1) Is the only tax i would pay that 30k + 15k /year? Not any other tax “embedded”?
2)How much money you estimate to be needed, if i ask for 4/5 employee visas?
3)the offices NEED to be out of residential areas, AKA, in the specified zones, or could i use a house (or part of it) as a office?
Thanks again, and keep up the good work ^^
Congrats
July 15th, 2008 at 10:41 am
Gavazzi,
30K + 15K is not actually taxes - they are expenses associated with company start up and licensing. 30K is for RAK FZ, in Dubai Internet City it will be more expensive.
If you plan having employees, then RAK FZ is not good option for you as it is pretty far away from Dubai. But if it is OK for you, then it probably might work fine.
Office rent is pretty expensive here. For example, 700 sq. ft. will cost you around 50K USD per year. Having your license from Free Zone, you must have an office there too.
Geographically, it is not much different from residential area and zone as they are very close to each other.
July 22nd, 2008 at 5:29 pm
Hi Roman
I saw your help forum here while searching about opening a company in Dubai. I’m intersted in opening a MEP (Mechanical, electrical , plumbing) company in Dubai. It involves Installation of MEP works in new buildings. Yes I do know about 51% sponsor that we need to find to register the company.
1) I wanted to ask that if we register our company in Dubai’s freezone , can we still work outside the freezone ? I mean can we work on Government contracts ?
2) Someone told me that if I dont want a sponsor as a partner in the company, then I will have to pay some amount of tax to Dubai Government. Is that right ? And if it is then how much is that percentage of tax ?
Thanks alot ..
July 23rd, 2008 at 7:49 am
1 - I don’t know much about mechanical work, but in case of software, you can work for any company inside or outside the Free Zone.
2 - not true: there is no taxes in Dubai at the moment. Maybe people call “taxes” the fees they pay for their license, office, high rent, etc. But these fees you pay whether you have a local sponsor or not. Maybe people mess the things with Saudi Arabia, where foreigners may start up their own business without having a local sponsor, but they have to pay something around 20% of their income as tax.
There are discussions at the moment to introduce VAT and income tax, but I am not sure when it will be implemented.
July 24th, 2008 at 8:09 pm
Hi
I have a software services company in India.
I want to open a representative office in UAE.
I am looking at RAK Free Zone.
What type of license do I need to take?
Branch, FZE, FZECo, Ltd, LLC ?
What are the main differences between these licenses?
July 24th, 2008 at 10:01 pm
Rao,
I guess the best option for you would be to give a call to RAK FZ sales office - they will give you all the details about different options.
July 30th, 2008 at 10:03 am
Dear Roman!
We are going to open a cement works in Dubai.
But unfortunately we did not know how it goes and where we can get full info.
Please, Can you help us in such situation???
Best Reards,
Daly
July 30th, 2008 at 10:10 am
Try calling Jebel Ali Free Zone or RAK Free Zone.
Sorry, this blog is about software business, not cement works.
August 6th, 2008 at 6:18 pm
Dear Roman,
Can a company be registered in UK or the Isle of Mann and run a slaes operation based in Dubai?
August 6th, 2008 at 7:18 pm
If you need to have a presence in UAE to sell your products then you must get a license for your company branch. Otherwise, if you can sell your products remotely then branch office is not needed - for example, shareware software.
Another option is to find a local distributor to sell your products.
August 18th, 2008 at 3:53 am
Dear Roman,
I have a registered company in India. I want to open a VoIP minutes reseller company (or basic branch or virtual branch) branch in any part of UAE. We purchase the minutes from UK. I want to resell that to across the world. Please give me a better solution.
August 18th, 2008 at 6:47 pm
I guess it is better to call any of FZs and talk to their sales people - some time back VoIP was not allowed in UAE, but I don’t know how the situation is now. Good luck!
September 10th, 2008 at 9:55 am
I applaud you for all your efforts. I actually got all my questions answered by going through all the text here. Thanks!
September 13th, 2008 at 8:34 pm
Impressive work and very informative me too as me plan to open a branch office for my software product marketing in dubai. Thanks a log Roman.
Roman can you specifically describe which business Apps are all time high these days in UAE. I really appriciate for this.
September 13th, 2008 at 10:02 pm
Knowing what software has high demand is one of the major questions you have to find a right answer for before coming to the market. Working with the specialized medical software, particularly with Clinical Decision Support, I am not much aware of any business applications. Probably CRM, ERP, but this is just my assumption.
Anyway, good luck with your business, Zahid.
September 17th, 2008 at 9:39 am
Hi Roman,
The messages have been very helpful. However I have a question regarding setting up an internet business. I would like to earn revenue from services offered on the site (subscription based) and also through advertisements placed on it. Please advise on legal procedures such as
1. setting up the company,
2. getting and depositing payments from clients,
3. marketing the website all over UAE (probably the Ministry of Information has a requirement regarding this),
4. selling the services to companies around UAE.
Please try to answer all that you can based on your experience or experience of other people at DIC.
Thanks in advance!
September 17th, 2008 at 10:18 am
1 - if you plan selling over the Internet, you can register your company in your home country, or in any of the offshore areas. If you need a physical presence, then RAK FZ is the cheapest option.
2 - I would assume that Internet based business would have Internet based payment. The problem is that people here seem to be afraid paying by credit cards over the Internet. Otherwise, you would need to collect cheques from your customers, or ask them paying to your bank account.
3 - not aware of anything like that. I know that Ministry of Health has certain requirements for healthcare related web sites, but I ‘m not sure there are any requirements for any other web site in UAE. You probably would ask any of web design compnaies to double check it.
4 - knowing how to sell your product is probably 75% of the successful business. It’s only you who is able to answer your question. The first thing you would ask yourself is “why my future customers would want to buy my products?” - answering this question honestly for yourself will help avoiding a lot of disappointments.
Good luck!
October 16th, 2008 at 7:02 pm
Hi Roman
We may get a small dredging contract in Dubai.
How quickly can i set this up as the project will start in January 2009?
Where do i find a sponsor?
Great blog!
October 16th, 2008 at 8:22 pm
In RAK FZ it might takes 2-3 weeks to get everything ready. In this case you do not need to have a sponsor.
October 22nd, 2008 at 2:03 pm
Hello Roman,
You have been doing awasome job by answering all the queries.
We have a IT company based in India and are now exploring opportunites to open a office in UAE purly to rip the benefits of a FZ they have on offer.
As I understand from your replies, the initial registartion in RAK FZ will cost around 30k AED and recurring annual fees of approx 15K AED for license renewal.
I have a few questions to ask you, will appreciate your advice:
1) Any other recuring expenses we should mke provision for when we cme to RAK FZ, eg: Annual Filings, Audits, Any other statutory complainces, etc.
2) How easy or difficult it is to have a bank a/c opened for companies registered in RAK FZ which only use table space or are virtualy located?
3) Does RAK FZ share the company ownership information with anyone, or is kept confidential?
4) Can you confirm if transfering funds into and out of the FZ registered companies is as easy as they claim it to be, ie. without any ristrictions?
5) Can you advice any good consultant who can help us in our registraton process and complainces later on?
Cheers!
October 22nd, 2008 at 7:38 pm
1) No, as far as I know. 15K AED includes license and flexi-desk per year. Of course, if you want to get more than one person employed, you would need to add here expenses for the office space.
2) No difficulties at all. Before starting a company, you would need to show at least 100K on your personal bank account anywhere in the world - it might be a letter from your bank that confirms you have this money. Otherwise I haven’t heard about any complications.
3) I don’t know, it is better to check with them.
4) It is your company, your bank account, and your money. Nobody cares what you do with them, as long as they do not assume it is money laundry, I guess.
5) You can to Ms. Elena, her e-mail address is e dot lazareva at rakftz dot com
When we started a process of setup for one of our branches, I was really impressed by how fast and professional way she replies and advices.
Frankly, all these questions would be answered by RAK FZ staff - there contact details are available on their web site.
October 23rd, 2008 at 10:49 am
Hi
I am working as a Freelance IT recuitment consultant and BPO too. Is any way to open an office at free zone(cheaper one like RAK) and operate at home ? As some of friends wish to join if feasible What would be hassels plz inform
thanks
kumar
India
October 23rd, 2008 at 6:30 pm
I guess 90% of the discussion above is about opening a company at free zone like RAK FZ, and then work from some other place - so answering your question, yes, you can.
In this case you get a flexi-desk and one visa. If you want to hire your friend, then you need another visa, and hence you must have a proper office.