Dubai Fact-File Part 1:
Business Formation for Individuals
1.5 Dubai Foreigners in Business
Limitations on foreigners in business: A
foreign sole proprietor may set up in business in Dubai but
will require a Residence Visa and an Employment Visa (work
permit).
The situation with regard to obtaining residence and work
permits is a great deal more complicated for the self-employed
entrepreneur in Dubai than it is elsewhere (or indeed for
someone coming to work in Dubai on an employed basis), on
account of the Emirate’s rules on foreign business ownership
outside of the free zones (generally 51% local ownership is
required; certain types of ‘professional’ or ‘artisan’ companies
may be foreign controlled - a local ‘service agent’ must be
appointed, but there is no requirement for said agent to have
any involvement in the running of the business, although they
will still require paying for their services!)
Foreigners can own 100% of a business in Dubai provided that
it is located in one of the country’s ‘free zones’. Relaxation
of the aforementioned 51% local participation rule to permit
majority foreign ownership of companies located outside of
the free zones is much anticipated, but as yet unconfirmed.
The process for obtaining such permits is fairly tough, and
most businesses choose to employ someone to guide their expatriate
workers through the process. For the ‘one man band’, seeking
to come to Dubai to work for himself, the situation is obviously
slightly different, although presumably such a ‘fixer’ could
be employed by an individual, or the local partner may be
able to provide assistance. Either way, a degree of local
involvement is likely to be necessary.
It is also worth noting that the rules governing the granting
and duration of visas, and the fees payable (where applicable)
have been subject to fairly frequent change; it is advisable
therefore to check the situation with the embassy in your
country of residence, or with the Department of Naturalisation
and Residency (DNRD) before coming to Dubai.
Residents of countries belonging to the Gulf Cooperation
Council (the United Arab Emirates, Bahrain, Saudi Arabia,
Oman, Qatar and Kuwait) will not require a visa to enter Dubai.
Residents of certain other countries, including Andorra,
Australia, Austria, Belgium, Brunei, Canada, Cyprus, Denmark,
Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland,
Italy, Japan, Liechtenstein, Luxembourg, Malaysia, Malta,
Monaco, the Netherlands, New Zealand, Norway, Portugal, San
Marino, Singapore, Spain, Switzerland, Sweden, the United
States, and the Vatican are usually able to obtain 30 day
non-renewable visas for free from the airport.
UK residents are also not required to obtain visas until
they reach Dubai, where they can obtain a 60 day visit visa,
extendable (for a fee) by a further 30 days.
Residents of all other countries can obtain 30 day short
stay visas, or 90 day long term visas from a branch of the
Directorate of Residency and Foreigners Affairs; details of
the required documents and fees, and the submission locations
for visa applications can be found here. Applications must
generally be made by a local sponsor or agent.
Those hoping to stay and work in Dubai for a longer period
must seek a residence permit, and labour card, and a health
card.
Before any of the above can be obtained, a medical examination
and blood test are necessary. Following the completion of
said examination, it is advisable (unless you are covered
by a private medical policy) to obtain a health card, allowing
access to low cost healthcare at public hospitals and medical
facilities.
At the time of writing, health cards cost between AED100
and AED200 for children up to the age of 17, and AED300 for
adults.
A work permit (or labour card) is the next step, although
this must usually be applied for by the employer, a situation
made somewhat more complicated when the intended holder is
self-employed. As previously stated, the local partner may
or may not be able to assist here.
The work permit should be sought as soon as possible after
entering Dubai (ideally within the first 30 days, although
up to 60 days is permitted). Documents likely to be required
include: a photograph of the applicant, a copy of the business’
licence, a copy of the entry visa, the health certificate,
a copy of the Ministry of Labour signature card, and 3 copies
of the employment contract.
Labour cards are generally valid for up to three years, and
are renewable for a similar period.
Residence permits are generally granted for three years,
and renewable for the same period thereafter, and new applications
are not generally granted to those over 50, although exceptions
are sometimes made.
Wives, children, and dependent parents can be included on
an individual’s residence permit, but they must meet the minimum
income requirement for the number of dependents that they
have.
Documents required for the granting of a residence permit
are likely to include: the applicant’s passport, their employment
visa (with a Dubai entry stamp), their medical test results,
education certificates (verified by an official or solicitor
authorized to attest to such things in the previous country
of residence), a copy of the employing establishment’s immigration
card (where there is one), a copy of the establishment’s trade
licence, passport photos of the applicant, and the processing
fee.
The residence permit, once granted, is stamped on the applicant’s
passport, and allows them undertake a number of activities
forbidden to those without such a permit, including renting
property, opening a bank account, and driving their own vehicle.
The length of time between the granting of the employment
permit and the residence permit is likely to vary according
to the efficiency of the employing company or local agent’s
human resources department; 3-4 weeks is a low estimate.
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