20 May, 2022

Starting a Franchise in Dubai, UAE

franchise in dubai

Franchise in Dubai, UAE

Buying an existing company, setting up a company, and merging with other companies is the best way to start a business. However, franchise business in Dubai, UAE is one of the new ways to set up a business. Having a successful brand back a business is the perfect way to start a business. A franchise disclosure document (FDD) can be requested. It outlines rules, fees, responsibilities, and other information. A franchise agreement can also be requested for which is a legal contract with all the rules and regulations from the franchisor.

Requirements for Starting a Franchise Business in UAE

Carrying out a market survey is the first step if one is considering opening a franchise. This helps in getting an insight into the chances of the company succeeding. Even though a survey is not compulsory, it is recommended.

A foreign investor must take into account a few things to follow all the legally set rules:

If the franchise is being setup in DUBAI mainland then a local sponsor is required.

– When opening a franchise, the investor can register a company or a sole trader

– An agreement, known as a franchise agreement, needs to be made and signed by both parties when the franchise is opened.

The franchise agreement provides for the rights and obligations of both the franchisor and franchisee. Types of franchise companies in the UAE The investors can also set up this type of venture in the UAE’s free zones without the sponsorship requirement. However, the free zone franchise company will only operate in the free zone.

Two types of franchises are recognized by the UAE Trade Register:

1. Single-unit franchise – Here the franchisee will sell or distribute the products or services of the franchisors through a single company;

2. A multi-unit or developed franchise-In this case the franchisee is allowed to open several spaces that will be controlled by a single company.

These categories are decided by the Department of Economic Development. It is self-explanatory that why should one model should be followed instead of the other. Speaking to Business consultants in UAE at Radiantbiz can help you get solutions to all your business-related queries. A business in the free zone guarantees 100% ownership independent of the type of business that has been opened. A local partner or service agent is required to open a business in areas that are not covered under the free zone.

As a service business, you can retain 100% ownership but will be required to have a local service agent (LSA). A local service agent is a person who belongs to UAE and assists a foreigner in the licensing requirements in exchange for an annual fee. If selling or distributing products, a company is supposed to have a 51 percent share of the business with a UAE national. In case you don’t know about any of the UAE nationals, this is something a business consultant can help with. They will introduce you to an interested UAE national.

In UAE, an agreement was created to state that the economic benefit in shares of the company, which is legally held by the UAE shareholder, belongs to the foreign national. This puts the economic interest of the UAE national in the company, limited to an agreed annual fee. The license and setup type that’s right for you and your business type will depend on several factors.

Starting a Franchise in Dubai, UAE – a step-by-step guide

There are several steps to follow before you can open a franchise in the UAE.

 1Choose your company name: Many things need to be kept in mind while doing this. The name should not be offensive in any language and the names of well-known organizations should be avoided. Abbreviations should also be avoided.

 2: Applying for your trade license : You’ll need a trade license to operate a franchise in the UAE legally. The application process will differ depending on a free zone or mainland setup. The following items would be required to apply for a license-

· Application form

· Passport copy of the proposed owner or owners

· Two colored photos, passport size.

3 Applying for your visa :You’ll need a visa to work in the UAE. It is necessary to undertake a medical exam. As the holder of a UAE business license, you can sponsor others for their visas too. The maximum number of visas one can apply for depends on the size of the company and chosen setup.

 4Opening a corporate bank account: Finally, opening a corporate bank account is necessary to do any business in the UAE. One of the key reasons why people turn to start a franchise business in Dubai is because of the support that comes with the brands that are already famous.

Local businesses are more willing to engage with internationally recognized brands. This, in turn, makes it easier to initiate a working relationship even if your business is one of the franchises in Dubai, UAE. Setting up a business is tricky work that needs to be done. All the tasks and duties need to be taken care of. Assistance is also required to understand all the procedures and the laws.

Radiantbiz provides an all-around solution to all business setup queries whether it is an offshore, mainland, or free zone company set up. We are transactional banking and trade finance experts and will help you in managing your corporate bank account. Radiantbiz guides you through the steps of obtaining a license with ease. We have various packages to fit with your dream business and help to get the company that you desire to run.