Dubai is one of the fastest growing business hubs in the world. Each year the Dubai Department of Economic Development issues approximately 50,000 new business licences to investors from around the world and despite the challenging economic conditions caused by the COVID-19 pandemic, the emirate continues to go from strength to strength with many entrepreneurs seeing the city as a prime location for growth and expansion into new markets.
The global pandemic has forced businesses to adapt to new ways of operating which has given rise to an increased reliance on technology and an increased use of remote working models. This has altered the way that many companies approach their use of office spaces.
A remote work report conducted by Owl Labs State in 2021, revealed that 56% of global companies allow some degree of remote work, while 16% of global companies have transitioned to a fully remote model.
Dubai has been quick to recognise this trend and respond to it, and now offers investors several business licences that waive the usual requirement of securing office space in order to register and operate a business in the emirate.
What are the benefits of setting up a business without physical office space?
The primary benefit is cost savings. On average businesses spend between 5% and 10% of their gross revenue on office space so the opportunity to avoid this expense can be very helpful, especially when businesses are just starting out and cash flow is low.
Another advantage is flexibility. Having more freedom with regard to working hours and location can increase productivity and allow for a much better work-life balance which in turn leads to improved employee and customer satisfaction.
Finally, establishing a business without physical office space can make market entry significantly easier and quicker. Not having to deal with administrative burdens such as leasing contracts, managing utility bills and office maintenance can free up more time for entrepreneurs to focus entirely on building their businesses.
Which business licences in Dubai don’t require physical office space?
There are now several types of business licences that can be obtained without physical office space. The following are some of the most popular:
- Freelance Permit
The Dubai freelance permit allows its holder to practice a wide range of activities including media and communication, education, consulting, fashion, design, architecture and ICT. There are a number of jurisdictions within Dubai that offer freelance permit such as Dubai Media City, Dubai Knowledge Park, Dubai Design District and Dubai Internet City.
Each free zone has its own rules and regulations for obtaining a freelance permit, so it is important to research the requirements before applying.
- E-commerce Licence
According to a report by Dubai Economy, the e-commerce market in Dubai was estimated to be worth AED 18.2 billion in 2020 and is expected to grow further in the coming years. This growing popularity reflects the increased consumer confidence and familiarity with e-commerce platforms and online shopping.
The Dubai e-commerce licence is now available in several prominent free zones such as Dubai Multi Commodities Centre, Dubai Silicon Oasis, Dubai Commercity and Dubai South, and can also be obtained in Dubai mainland from the Department of Economic Development (DED).
- DED Licence for home-based businesses
The DED provide licences which are suitable for businesses that can be run from home, such as consultancy, tutoring, or small-scale manufacturing. Options include the e-trader licence or the instant licence, both issued by the Dubai Economic Department.
It is worth noting that there are certain restrictions for home-based businesses on the mainland, so it is important to check with the DED on the types of home-based activities that can be conducted from residential premises before going down this route.
- Offshore Company Registration
This type of registration is ideal for businesses that operate outside of Dubai but want to establish a presence in the UAE. Benefits such as reduced tax liabilities, asset protection and ownership confidentiality make it a good choice for established businesses that want to explore international expansion with fewer requirements and restrictions than exist with a mainland setup.
The most prominent jurisdictions that offer offshore structures without a physical office requirement are Jebel Ali Free Zone and Ras Al Khaimah International Corporate Centre. Both offer lower setup costs when compared to mainland companies, but it is important to note that they only allow for business activities to be conducted outside the country, not within the UAE market.
Final Thoughts
All of these business licences offer a great deal of flexibility and cater to the evolving needs of modern, digitally based businesses. However, each jurisdiction has its own rules, regulations and operating requirements, so it’s important to consult with a reputable corporate services provider in Dubai to find the licence that best fits your business needs and ensure you’re fully compliant with all legal requirements.
How can Emirates Zone help?
We are the leading foreign investment consulting firm in UAE with over 10 years of professional experience offering investment consulting services to corporations, investors, start-ups, and small-medium enterprises across Abu Dhabi, Dubai, and other parts of the Middle East and North Africa.
We have unrivalled expertise and experience across a variety of services like regulatory compliance, tax structuring, operational and risk management, fund creation, and fund due diligence, and our team of experts are committed to helping you achieve your business and investment goals.
If you need help with business setup or any other investment matter in the UAE or wider GCC region, don’t hesitate to get in touch with us at +971 2 6666676 or +971 50 1346022, or email us at info@emirateszonecr.com and we will be happy to assist.