Location isn’t simply about where you would like to set up an office,
shop, or factory but more about licensing jurisdiction. There are a
number options available, from onshore, licensed by the Department of
Economic Development (DED) in each emirate, to a growing number of
free zones, often themed around particular industries or segments.
Some licensing authorities allow you to set up as a freelancer or
professional services provider. Others will limit your scope of
activities so if you plan to expand your services in the future, make
sure you are licensed in a zone or authority that allows you to do so.
• Onshore Licensing
Onshore licensing means you are licensed in
(Department of Economic Development) and is best suited to all types
of commercial enterprises that would benefit from being set up as a
liability company (LLC). Examples of this might be a
trading company, a logistics company, or a manufacturing company.
Local laws require that a minimum of 51 per cent of the shares in such
companies must be held by a UAE national. The company must also take
up physical office space, and may be subject to further requirements
or approvals from government departments that regulate specific
industries. Offshore means you are licensed in a free zone.
• Free Zones
can offer a suitable alternative to start-ups within specific sectors.
A start-up looking to set up a manufacturing facility and export their
products may consider Jebel Ali Free Zone. Other options include
Hamriyah and Ras Al Khaimah free zones. Themed free zones such as
Dubai internet City, Dubai Media City, or Dubai Design District can
help start-ups within those sectors become part of the business
• Local partner vs local service agent
If you decide to license onshore, everyone will tell you to find a
local partner. This is not necessarily the case. Onshore
professional licenses are available for activities such as
consulting and other services, and may be owned 100 per cent by a
suitably qualified foreign national, although he or she must appoint a
Local Service Agent (LSA). The LSA provides government registration
services for a fixed annual fee and has no shareholding or involvement
in the business. Such licensing also requires a physical office
• Office space
Because you must have office space, research rents in your chosen
location and ensure it is right for your needs. Start-up media
entrepreneurs, for example, don’t realise they can’t rent an office in
Dubai Media City if their licensing is with the DED. Media City is a
free zone and you must be licensed to operate in that specific free
zone to rent space there. This works the other way round too: if you
are licensed in the Media City free zone, then you are required by law
to rent an office space in Media City, it is illegal for you to rent
an onshore office.