The Strategic Importance of Dubai's Department of Economic Development for New Businesses

Dubai’s economic development is happening at an unprecedented rate and the business-friendly landscape of the region is what makes that possible. Every economic policy in the region is aimed at facilitating entrepreneurship as well as direct foreign investment.

A significant part of these policies is dedicated to assisting newer and small to medium-sized businesses in setting up and running their operations with ease.

Dubai’s Department of Economic Development (DED) is an important entity that aims to regulate the region’s economic planning and business sector by facilitating the creation of effective development plans and projects.

This blog throws some light on the importance of Dubai’s DED for new businesses who are looking to set up their operations. So, keep on reading to learn more.

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• An Introduction to Dubai’s Department of Economic Development (DED)
• Goals of DED
• Services Offered by DED
• The Role of DED in Business Setup
• Types of Licenses Issued by DED
• Business Activities Permitted by DED
• The Importance of DED for New Businesses
• Ease of Business Setup
• Multiple Licenses
• Easy Visa Policies
• Greater Flexibility in Business Activities
• Other Additional Benefits

An Introduction to Dubai’s Department of Economic Development (DED)

The Department of Economic Development is a regulatory government body in Dubai that is responsible for setting and driving the region’s economic policies within the broader governance system of the UAE.

The DED develops economic plans, identifies strategic sectors, and provides a wide range of services to new businesses and investors.

The DED came into existence in 1992 and in 2008, the ruler of Dubai i.e., Sheikh Mohammed bin Rashid Al Maktoum issued a royal Decree No.5 giving DED the power and responsibility to regulate the economic performance of the region.

DED is also responsible for new business setups in Mainland Dubai. This is a license-issuing authority that regulates all activities related to business setup in the region. New businesses must register with DED if they are to start operations in Dubai Mainland.

The DED licenses otherwise known as the LLC, Mainland, or onshore licenses have become increasingly popular ever since the lowering of traditional regulations. The main reason is that it allows 100% ownership by the expats. There are several other benefits of setting up a DED business and we will discuss these in detail shortly.

1. Goals of DED

The Dubai’s DED has the following main goals.

• It aims to advance the vision of the Dubai Government when it comes to economic growth, especially for SMEs, FDIs, trade, industrial, and export sectors.
• It plans to create an investment-friendly landscape that attracts both local and major foreign players.
• It aims to create a business environment that prioritizes creativity, innovation, and business satisfaction. It does so by simplifying processes, regulating business activities, and creating future-forward policies.

DED is responsible for controlling economic activities taking place outside free zones i.e., in Dubai Mainland. It governs the corporate strategy sector, business registration sector, commercial compliance, and consumer protection to name just a few.

2. Services Offered by DED

Following are the main services existing and new business owners registered with DED can get

• Instant License
• Reserve Trade Name
• Renew Trade Name
• Renew License
• Issue Initial Approval
• Issue Branch Initial Approval
• Print License
• License Activities' Terms and Conditions
• Manage License Contact
• Pay Inspection Fines
• Update Mobile Number
• Issue Legal Contract for License
• Issue Legal Contract
• Approve Legal Contract
• Print Legal Contract

3. The Role of DED in Business Setup

The DED of Dubai oversees every activity and process related to business setup on the mainland. DED is the legal body that issues licenses in these areas and oversees trade practices as well as commercial enterprises.

DED’s main objective is to create conditions suitable for all new and existing businesses so that they can achieve long-term economic success through their investments and innovation.

To establish a business in Dubai mainland, every entity must acquire a DED license. This gives them the go-ahead to trade locally within the market or directly with the consumer.

4. Types of Licenses Issued by DED

The licenses that DED issues depend on the type of business you wish to start. Following are the main categories of these licenses

• Industrial License

This license is a must for companies that deal in industrial activities or factory operations like processing, production, assembling, etc.

• Professional License

This license is a must for entities that provide professional services like accounting and bookkeeping services, education, legal consultancy, marketing, etc.

• Commercial License

This is the most commonly acquired license that is a must for businesses that deal in buying/selling of products, import/export, and other merchant-like operations.

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5. Business Activities Permitted by DED

To ensure the commercial activities align with the UAE’s economic vision, DED divides these activities into various sectors. This makes it easier to regulate these sectors and ensure compliance.

Some of the key sectors or permitted business activities include

Manufacturing: Activities related to textile, machinery, chemical, and other industries that deal with manufacturing, assembly, or refining of commodities.

Professional Services: These activities include consultancy, legal services, education, training, healthcare, insurance, marketing, public relations, etc.

Real Estate: Activities involving real estate include buying/selling, development, management, and real estate agency operations.  

Tourism and Hospitality: These include activities related to travel agencies, hotel business, tourism, event management, etc.

Trading: This includes activities related to Fashion retail and wholesale, technological equipment/gadgets, food, construction materials, etc.

The Importance of DED for New Businesses

Following are a few points that highlight the importance of DED for new businesses in Dubai

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• Ease of Business Setup

DED licenses ease the business setup process by giving you an easy administrative and legal registration procedure. The department facilitates new businesses with fewer restrictions, flexible regulatory procedures, easy approval processes, and quick timelines.

• Multiple Licenses

Another benefit is the permission to acquire multiple licenses for new businesses provided they have the space for offices. In the case of commercial as well as professional licenses, there are no restrictions on the scope of business which facilitates growth for newer businesses.

• Easy Visa Policies

With a DED license, you get relaxed visa policies which enhance business scalability. As a rule of thumb, businesses can get one visa per 100 sq ft of office space. DED-licensed companies also get to start an office in a location of their choice. This allows such businesses to open offices in locations with easy access to the local market.

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• Greater Flexibility in Business Activities

DED covers a wide range of business activities and it can even add new activities to its list by working together with various stakeholders. This gives DED-licensed companies the freedom to go forward with diversified ventures and new business activities.

Initially, a DED company was required to have a 51% shareholding from a local partner/sponsor. But the latest legislation has given 100% foreign ownership to certain business activities.

DED also offers a flexible profit-sharing mechanism between the foreign investor and the local sponsor. Investors can pay the sponsor a fixed annual fee while retaining 100% control of their business activities as well as profits.

• Other Additional Benefits

1. DED companies are free to trade with other mainland entities in Dubai.
2. There are fewer nationality restrictions for visas and ownership.
3. These entities can conduct business with local and government offices.
4. There is no minimum capital requirement to set up a DED-licensed mainland company.
5. There are no restrictions in terms of recruitment processes or employment visas.
6. These businesses are exempt from personal or corporate tax.
7. They get low import duty as well as no annual audits.
8. Businesses can get 100% repatriation of capital and profits.
9. They get easy corporate bank account setup procedures.
10. They enjoy a much better local and international standing or reputation.

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Conclusion

Dubai’s Department of Economic Development plays a very significant part in shaping the region’s business and economic landscape. New businesses looking to create their mark in their respective industries can register with DED to get several incentives from relaxed visa policies to enhanced flexibility in business activities and from tax exemptions to convenient business setups.

DED is the main authority that governs business registration and licensing which means every business must adhere to the policies and business setup guidelines that it puts forward.

This can ensure long-term stability of your operations as well as countless business expansion opportunities making you a key player in Dubai’s rapidly growing economy.

You can visit us at Alpha Pro Partners to get the best business setup, bookkeeping, accounting, Xero, and VAT registration services for your new business in Dubai, UAE.  

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