The moment a Crunchmom has her ‘a-ha’ moment for a business, there are some essentials she needs to know and consider before reaching out to the Department of Economic Development (DED) for a UAE business license.
We asked Marianna Bulbuc, CEO of Bizzmosis, UAE’s leading experts in government affairs, for a 101 guide on how to get started.
What are the pros and cons of getting a business license in the UAE?
The biggest red flag is obviously operating within the UAE, as a resident, without a business license. The laws oblige all means of commercial income to be legally registered. It is costly to license and operate a business in the UAE (compared to other countries) however, in the last few years, fees have gone as low as AED580 to 1,250 per annual license for professional and services industries which, in my opinion, is much more accessible.
Having a business licensed in the UAE irrespective of size, allows firstly to build a brand, credibility and increase the value of product/fees. Most importantly, you'll be able to access funding, partnerships, B2B collaborations that go on to open many more doors and growth opportunities. Another benefit, depending on the license chosen, is the possibility to have independent residency for women entrepreneurs and families with flexibility to travel in and out of the UAE, even if you don't plan on residing here.
How long can the process typically take and how much should one be prepared to pay?
As there are in excess of 70 jurisdictions and 100s of license types, depending on the choice entrepreneurs take, it could be anywhere from one hour to three to four weeks. Most common free zone professional or commercial licenses require seven to 10 working days and a mainland license can take one to 15 days, depending on the complexity of the license.
While prices can vary drastically, an average estimate is that a free zone license would cost in the area of AED9,000 and upwards, and a mainland license from AED18,000 and upwards.
What license would you recommend for a new startup?
The nature of business, industry chosen, planned operations location (inside or outside UAE), nationality and number of partners, and residency required or not are just a few factors that dictate the licensing type, jurisdiction, and respectively, cost.
My first advice is to not just search for the cheapest option, but understand the description of the activity chosen on the license, choose the correct licensing jurisdiction and speaking to professionals who can advise on all aspects of the business registration, operations requirements and liquidation process. Major fines and penalties affect business owners at a later stage, so cheapest is not always the best.
Can I have a passion project or Instagram business without a license?
As per the commercial companies law, any goods or services sold, in any quantity, need to be licensed. Handicrafts, handyman, artwork producers, marketing/design online services categories now have licenses for under AED1,500 per year, so there is no excuse not to have one.
Can I do business across the GCC or even internationally with my UAE business license?
Yes, a UAE license can operate internationally, but it depends on the nature of services or goods, and if those are regulated by the receiving country.
In some instances, a license with a relevant activity in that country might be required. For example, doctor’s advice or trading with goods that require registration in the country of origin, etc.
What made you want to start Bizzmosis?
I've been in the business and diplomatic environment since school, so it has been a lifetime goal to start a business of my own. However, Bizzmosis came from the plans of firstly having more time with my family and baby (so I had hoped!) – 9am to 9pm employment work was not suitable. Secondly, because I had seen a major gap for a government affairs agency in the UAE – a communicator for and on behalf of businesses and entrepreneurs to the very receptive government authorities, as nobody else does it!
What are your tips for Crunchmoms who want to become entrepreneurs?
From my personal experience, having a child and running a business has been the most awesomely crazy experience! It’s very rewarding in regards to the time flexibility I set for myself, financial benefit and admiration I receive from loved ones for the success I have built and am building.
I initially struggled a lot with guilt for missing out on play dates, time with friends, baby milestones...now, I look back at those days, and I am beyond proud that I kept hustling. I had built in my head that I was missing out but, without realizing it then, I was setting a great example to my daughter, which is exactly what I dream of as a mom.
There is nothing wrong in NOT running your own business, too. We are all unique in who we are, and our family and children will love us unconditionally irrespective of the choices we make in our career. However, if building your own business or turning a passion into a steady income is your dream and has been over the years, then don’t let it go! You have nothing to lose and only growth to gain in experience and the opportunity to create new memories.