A handy guide to setting up a business in Fujairah
As UAE continues to establish its position as a leading trading and business hub in the Middle East, many corporations and small businesses have opted to establish their presence in the smaller emirates. This shift has been brought about partly due to the government’s investment in infrastructure and social development. Businesses today see great value in having operations in emirates like Fujairah. So, if you are a new ventures manager at a big company or an SME owner, here is how you can go about setting up a business in Fujairah.
ALL ABOUT SETTING UP A BUSINESS IN FUJAIRAH
In the past decade or so, the UAE government has made various business-friendly policies to attract top talent from across the globe. Exciting incentives are offered in response to foreign and local investment. Not to mention, the business environment has been cultivated to ensure high returns. For these reasons, a growing number of businesses are choosing to establish themselves or expand their operations in Fujairah.
Corporations often prefer the northern emirate of Fujairah because of its location. Being a vital shipping route, it potentially opens up opportunities beyond the UAE border. Presently, the emirate has two free zones: Fujairah Free Zone Authority (FFZA) and Fujairah Creative City (FCC). Since businesses can enjoy all the perks of a free zone, setting up a strong foundation is easier.
If you plan to open up operations in the emirate, read on as we present a step-by-step guide to opening a business in Fujairah.
STEP BY STEP GUIDE: OPENING A BUSINESS IN FUJAIRAH
You have to follow specific steps when setting up a business in Fujairah. Luckily, the process has been simplified as the UAE government facilitates enterprises running in the country.
BUSINESS ACTIVITY
As you can guess, the first step is identifying your business area. Remember that the licence you apply for depends on the nature of your business operations. There are six types of licences in Fujairah:
- Industrial
- Commercial
- Professional
- Tourism
- Agricultural
- Occupational
While these are broad classifications, you can find further differentiation within them. In fact, business licences in Dubai classifications are the same as in Fujairah and the rest of the UAE.
Over 2,000 registered business activities are registered in the UAE, which clearly shows the government encourages innovation and invention. Moreover, a business can have a licence to operate in more than one area. So, you have plenty of choices when setting up a business in Fujairah.
LEGAL ENTITY
You can choose from several potential legal entities when starting a business in Fujairah. The decision generally depends on the type of business you want to run. Different legal entities have different laws and regulations.
Investors can choose from the following legal entities to open a business in Fujairah:
- General partnership
- Limited partnership
- Limited liability company (LLC)
- Public joint-stock company (PJSC)
- Private joint-stock company (PrJSC)
- Civil company
- Local company branch
- GCC company branch
- Foreign company branch
- Free zone company branch
- Sole establishment
- Holding companies
The ownership models are subject to varying rules and restrictions. For instance, 100% foreign investment is allowed in the limited sectors for mainland businesses.
REGISTERING YOUR TRADE NAME
This is another critical step in opening a business in Fujairah. The local economic development department is responsible for the primary business name approval. And here’s what you need to keep in mind when registering a trade name:
- The trade name is followed by the business structure acronym, i.e. LLC, EST, PJSC, PrJSC.
- The trade name must not violate public morals or the public order of the UAE.
- The trade name must be compatible with the planned business activity.
- The trade name must not include names of external bodies (governmental or otherwise) or religions.
- The name must be unique – not registered previously.
You get a 30-day window to pay the fee for name registration. If the date passes without payment, your application will be cancelled.
After initial approval, you can register your trademark with the Ministry of Economy. Read our guide on registering trademarks in UAE.
Clearing these requirements means that the UAE government has no objection to you registering your business. However, at this step, you don’t have permission to start operations just yet.
All foreign nationals must seek approval from the General Directorate of Residency and Foreigners Affairs. Depending upon your business activity, you may need permission from other governmental institutions before setting up a business in Fujairah.
Approving Authority Field | Fields |
|---|---|
Approving Authority Field Ministry of Interior | Fields General transport, fire equipment, alarm and safety systems, car rentals, used-car dealers, driving schools, used auto-parts |
Approving Authority Field Ministry of Justice | Fields Legal activities and consultancy |
Approving Authority Field Local Municipal Department | Fields Architectural and engineering affairs |
Approving Authority Field Telecommunications and Digital Government Regulatory Authority (TDRA) | Fields Telecommunication activities |
Approving Authority Field Executive Council | Fields Foreign company branches, general services, travel and tourism, ship and maritime agencies, charter trading, car clubs, charter air transport |
Approving Authority Field Ministry of Economy Insurance activities and insurance consultancy | Fields Insurance activities and insurance consultancy |
Approving Authority Field Local health departments | Fields Health-related activities |
Approving Authority Field Supreme Petroleum Council | Fields Onshore and offshore gas and oil-field services and oil drilling operations |
MEMORANDUM OF ASSOCIATION (MOA) OR A LOCAL SERVICE AGENT AGREEMENT (LSA)
The next step is to develop a Memorandum of Association (MoA) or a Local Service Agent Agreement (LSA).
MoA is necessary for the following legal entities:
- Limited partnership
- Limited liability company
- Public joint-stock company
- Private joint-stock company
The MoAs to set up a business in Fujairah can be prepared by courts, notary public or UAE-based law firms.
Businesses owned entirely by non-GCC residents need a local service agent from the UAE. An agreement is signed between the two parties and attested by the court or a notary public.
OFFICE ADDRESS
A physical address is compulsory to operate a business in the UAE. Fujairah’s Department of Economic Development and local municipalities provide approvals to businesses if they meet the set criteria of the type of business they plan to run. Also, rental agreements for offices or warehouses have to be signed.
BUSINESS LICENCE
Once all the requirements are met, a business licence is issued from the Fujairah economic department’s service centre.
The following documents are required to get the licence:
- All documents submitted earlier, along with the initial approval receipt.
- Lease contract for the office space.
- Attested MoA.
- Approvals from governmental bodies (where applicable).
- Attested service agents’ contracts (where applicable).
Once these processes are complete, you can apply for visas.
SETTING UP A BUSINESS IN CREATIVE CITY FUJAIRAH
Many people from the media industry prefer to open their businesses at Creative City Fujairah. The free zone provides all companies with the required infrastructure and multiple other benefits.
Here’s the process to step up a business in Creative City Fujairah.
DOCUMENTS
Here’s a list of documents you would need for this Fujairah free zone business setup.
- Duly filled application form
- Owner’s passport colour copies (residence page and UAE entry exam)
- Business-related commercial document
Other documents may be requested as per requirements.
INVOICING AND APPROVAL
After your documents are assessed, and your company’s name is approved, an invoice is generated. You have to pay this fee to start the licencing process.
DOCUMENT DISTRIBUTION
You can collect the following documents from the free zone office:
- Trade Licence
- Certificate of Incorporation
- Shares Certificate
- Articles of Incorporation/MOA
- Office Lease Agreement
With these documents, you can open a bank account and apply for an Establishment Card. Remember, you can only apply for visas after receiving an Establishment Card.
FREQUENTLY ASKED QUESTIONS
ARE THERE ANY FREE ZONES IN FUJAIRAH?
Yes, as mentioned earlier, there are two free zones in Fujairah.
Fujairah Free Zone Authority (FFZA) provides access to the Gulf of Oman and the Indian Ocean and is more suited for industrial sector companies. In contrast, Fujairah Creative City is suited to communication, media, IT or business services.
I HAVE A QUERY ABOUT OPENING A BUSINESS IN FUJAIRAH. WHO SHOULD I CONTACT?
Contact the relevant department for queries regarding setting up a business in Fujairah at +971-9-222-0555.
WHAT IS THE COST OF OPENING A BUSINESS IN FUJAIRAH?
The cost of opening a business in Fujairah depends on several factors, including rent, type of business, licence fees (which also vary depending upon the type of business) and other official fees.
That concludes our guide to opening a business in Fujairah. Due to the efforts of the UAE government, things have changed rapidly in the smaller emirates. Making an early move will give you an advantage that can hold your company in good stead for the long haul.
An alternative to opening a brick-and-mortar store or workplace is registering for a Dubai e-trader licence. E-business has grown tremendously in the last couple of years as our lifestyles have changed due to the pandemic.
If this is your field, it would be prudent to read about UAE oil and gas companies.
Follow MyBayut to learn more about setting up and running businesses in the UAE.
