Can You Start a Business While Being Employed in Dubai?
Monday May 31, 2021
Dubai has been making immense efforts to promote and support start-ups and SMEs as they bring better products and services, generate more employment, and drive innovation in society. Dubai has more than thirty free zones that allow 100% ownership of the company to foreigners, making it the most favoured city to set up a new business. Even if you are a full-time working employee in a company, you can start your own business in the region. Let us understand the requirements for setting up your business while being employed in a company.
Obtaining a No Objection Certificate (NOC)
The most critical requirement for working employees to set up their businesses in Dubai is obtaining a NOC from their employer and applying for a trade license under their visa.
According to the UAE labour laws, an employed person can start his own business while working full-time by obtaining a No Objection certificate from the company where he is currently working. However, it is the employer’s discretion whether to accept or reject the NOC application made by its employee. So, this is the trickiest part as most companies deny giving a NOC due to compliance and security policies.
The following is a step-by-step process for employees to get the NOC:
File a request for NOC via Dubai Trade Portal
Submit the documents required for NOC
Pay AED 500 towards the NOC issuance fees
Get NOC approval from the Department of Economic Development (DED)
Once obtained, save the NOC document in the company’s record.
Documents Required for NOC:
The following documents need to be submitted by an employee to its company to obtain a NOC:
The copies of passport of all partners in the new company
A copy of the new company’s name reservation
A copy of the new company’s Memorandum of Association (MOA) and Articles of Association (AOA)
Bank or cash guarantee of AED 50,000
An Undertaking Letter signed by the UAE partner
Action when you Obtain the NOC Successfully:
Once the employee has obtained the NOC, he/she has the flexibility to set up the new business in any part of the UAE.
Options when the NOC is Denied:
If the company denies issuing a NOC to the employee, then he/she can exercise one of the following options:
Choosing an Appropriate Free Zone: The employee can choose to set up his/her business in any of the UAE’s free trade zones which do not require an NOC from the employee’s company.
Using Spouse’s Visa: Working employees can form their new company in the name of their spouse or a relative and appointing them as a partner cum Managing Director. While you do so, you may keep all the control of the business under you.
Obtaining a DED Instant Licence: An employed person can apply for a DED instant licence to carry out your business activities under the special guidelines maintained by the UAE government. For this licence, you don’t need to submit any physical documents. Here is the step-by-step process:
Visit a DED counter to get an instant licence. To apply yourself, you need to get the UAE pass.
For the UAE pass, you need to register on the official DED portal using your Emirates ID. Once done, you need to visit DED’s website and update your business profile.
Create your account on DED’s website by providing the necessary details.
Follow the step-by-step process on the DED website to obtain your instant licence. You will have to provide your company’s trading name, the list of stakeholders, planned business activities, and the details of your UAE sponsor. You can do this step manually also.
Sign the electronic MOA and submit it for DED’s approval.
Provide the approval of your business partners. For this, an automatic message of consent is sent to all the partners.
Lastly, generate the payment voucher for your licence. Once the voucher is active, you need to make the necessary payment, and then you are all done.
Obtaining a DED Instant Licence is not so easy. Therefore, it is best to seek professional help from experienced business setup consultants in Dubai like Creative Zone.
Starting a business in Dubai is possible for working employees, whether you get a NOC or not. Some employees may find the process to obtain the NOC complex and challenging. That is where a professional business setup consultant can help.
If you are a working employee looking to start a business in Dubai, our legal expert at Creative Zone can help you. We provide all the help and support you need to obtain the NOC from your employer or obtain an instant licence from DED so that you can start your business in Dubai in no time. Call us at 800 LICENSE (5423673) to consult with one of our business setup advisors today!