Do I need a physical office to start my business in the UAE?

Businesses that provide online services, web-based support, consultation, and product sales do not require a physical office in the free zone jurisdiction. At the same time, the visa quota for these businesses would be zero or minimal. A flexi-desk or virtual office can be leased for operating in the UAE. This would provide a business address for correspondence. 

The businesses that can operate without a physical office in the UAE include:

• Online businesses
• E-commerce
• Freelance professional services
• Home-based professional businesses
• Consultancies

Businesses that could operate primarily through online interactions can be set up in any of the free zones in the UAE without leasing a physical office space. Online tuition, digital marketing, product sales through social media platforms, and business consultations are a few examples of businesses that can operate without an office.

Operating from a virtual office or a remote business operation cannot be done straightaway. The regulators have laid down specific guidelines and rules for remote business setup in the UAE. It must have a meticulous structure and must adhere to business regulations.

The license structures for a business without a physical office in the UAE include:

• Remote/Virtual Office: The company under the remote office set-up will hold an official address in the UAE. All correspondence would be delivered to the subject address. A business that requires physical meetings with its clients will not be able to function productively under this set-up. Consultancy services, digital marketing firms, web design services, professionals such as graphic designers and software developers, and advisory services can consider opting for a remote or virtual office in the UAE instead of a physical office.
• Flexi-desk: Flexi-desk is the most budget-friendly business option. It provides a space at a shared workspace centre. The entity can use shared facilities and common amenities. This helps in controlling budget overheads and provides a physical space for business operations. Flexi-desk is suitable for consultancies, start-ups, service providers, and professionals.
• E-commerce License: Finalise the company structure and business model that suits an e-commerce or digital license. Digital firms and e-commerce businesses can opt for remote operations, abiding by the extant regulations.

Here are the three license options for company formation in the UAE without leasing a physical office space:

• Dubai Virtual Company License: Global investors and entrepreneurs located outside the UAE can choose the Dubai Virtual Company License. Introduced by the Dubai Economy, this license permits global entrepreneurs from more than 100 countries to establish digital businesses in Dubai. The license does not offer a residency visa or a local corporate bank account. Those planning to set up a remote business in Dubai may opt for this license. Consult us to confirm whether you are eligible for this license.
• Abu Dhabi Virtual License: Similar to the Dubai Virtual Company License discussed above, the Abu Dhabi Department of Economic Development issues the Abu Dhabi Virtual License. This license allows 100% foreign investment. Business activities in fields including tech, consulting, and retail are permitted under the license. Foreign investors who do not want to relocate to Abu Dhabi, UAE, can opt for this license. A residence visa is not authorized under this license.
• Abu Dhabi Tajer eCommerce License: Emiratis, GCC nationals, and UAE residents can pick the Abu Dhabi Tajer eCommerce License for the business setup in Abu Dhabi. Skilled professionals, consultants, home-based businesses, online sellers, and professional services can commence operations from the virtual office after obtaining the license. The license is linked to the Emirates ID. Hence, global investors outside the UAE cannot choose this license. Businesses under this license needn’t lease commercial space or set up a shop for the first 03 years.

Every company operating in the UAE, whether it operates from a physical or a virtual office, should comply with regulatory requirements. The business must be registered in the jurisdiction. It must adhere to the business rules. The company operating from a virtual office must have:

• A valid trade license
• A registered business address in the UAE
• Compliance certifications (wherever applicable)
• VAT/corporate tax registration (if revenues are above the specified threshold)
• Company incorporation documents

A visa is not authorized for a business functioning from a virtual office outside the UAE. The visa quota generally depends on the office size. The Department of Economy and Tourism (DET) has specific regulations concerning the number of visas eligible for different office sizes. The visa quota increases with the increase in office space.

The DET determines the office size-visa quota ratio and is subject to change with policy changes. Remote business is not possible in normal conditions if you need visas for the company you are setting up in the UAE. Feel free to discuss with Kiltons’ specialists to confirm the visa quota.

Plans may change. You may choose to relocate to the UAE and commence business operations from a physical office. Identifying the right jurisdiction and finding the best office space might become a herculean task for you. Expert guidance would help in such a situation. In that case, Kiltons’ team can help you find cost-effective office space in the right location suitable to your business sector.

Office, warehouse, and commercial space specifications are extremely important, especially if you are setting up a regulated business in the UAE. The space should meet the standards laid down by the DET or the Freezone Authority.

The common issues faced by investors during leasing of office space include:

• Office space not meeting the stipulated specifications
• Location of the office/commercial space not suitable to the business sector
• Exorbitantly priced office and commercial spaces
• Lack of adequate facilities for the smooth operation of the company
• Disagreement with the property owner concerning the terms and conditions
• Anomalies in the lease agreement
• Incomplete documentation that may delay Ejari registration

Professional support is essential whether you are looking to set up a remote business or planning a physical office in the UAE. Kiltons Business Setup Services understands entrepreneurs and their varying requirements. Accordingly, we assure the right support and customized services.

A massive upfront investment for a physical office is no longer required for company formation in the UAE. The expenditure on leasing office space can be allocated for branding, promotions, procurement, or any other activities. By leveraging a virtual office/flexi-desk, you can start your business affordably. Explore advantageous free zones and make the right move.

Become a winner by establishing your business in one of the world’s most vibrant and thriving markets.

Let’s start today. Call us now.