Planning to start your own business in the UAE? Starting a business is an exciting venture, yet at the same time it can also be an overwhelming one, especially if you want your new business to ride the waves of change coming your way during the coronavirus pandemic.
Despite the changes being brought on by the current pandemic and the resultant economic conditions in the country, there are plenty of opportunities to start your business here if you are aware of all the legalities.
One of the most important things that should be foremost on your mind is that the UAE has its own unique rules and laws regarding foreigners from outside the country who want to set up a business. Also, business activities in the UAE are regulated by government authorities and thus require a trade licence to operate.
In this article, we will help break down the complexities of UAE visa regulations for licensing requirements and business setup purposes.
Free “Lifetime Residency Visa” – a marketing ruse and an easy trap for the unwary
We have all received many emails and seen a plethora of ads and social media posts by popular brands. Many try to convey the benefits of a new offer; others try to get you to act immediately.
But on the flip side, there are also advertisements by company formation service providers blatantly peddling their discounted trade licence packages through misleading statements, and employing cleverly worded messages and deceptive visuals to lure aspiring entrepreneurs into applying for their services.
A recent misleading advertisement promoted a “free lifetime UAE residency visa.” It is a well-known fact that a residence visa is not permanent and must be renewed once in every two or three years in the UAE, depending on the authority of issuance. Clearly, there is a big difference between lifetime visa and having a visa for life; you do not want to start your business off on the wrong foot by failing to understand the difference between the two. If you act as per the correct guidelines for setting up a business in the country along with fulfilling other legal prerequisites and renew your trade licence every year, you can have a residence visa for life.
As the old adage goes “an ounce of prevention is worth a pound of cure” – being the leading company formation specialists in the region with in-depth knowledge of both local and legal changes – we would like to advise you to review such statements with a discerning eye and steer clear of such too-good-to-be-true, attention-grabbing service packages. Oftentimes we know if something just doesn’t feel right, and listening to that hunch can help us avoid making a poor decision.
UAE visa regulations
Generally, a citizen of a foreign country who wishes to enter the UAE must first obtain a visa, either a visa for temporary stay or a visa for residence. Citizens of visa exempt countries (GCC countries, except Qatar) may be able to visit the UAE without a visa.
If you do not come from a visa exempt country or are traveling to study, work, invest and live in the UAE, you will need a UAE residence visa.
A UAE residence visa requires applicants to undergo a medical fitness test to prove that they are free of infectious diseases. They must also pass a security check and apply for an Emirates ID card from the Federal Authority for Identity and Citizenship.
A UAE residence visa is generally valid for one, two or three years. However, in 2019, the UAE made changes to its visa policies and introduced long-term visas issued for five or ten years. It’s also important to understand when you need to renew your visa and how to do it.
What is the long-term visa and who is eligible to apply for it?
In 2019, the UAE cabinet implemented a new resolution regarding the Organization of Residence Permits for Investors, Entrepreneurs and Professional Talent. This came as part of a slew of measures coming into force, intended to kickstart the UAE’s transformation from an oil-based to a knowledge-based economy.
Under the legal framework of this new law, the immigration authorities can issue long-term residence visas to foreigners who wish to live, work and study in the UAE.
There are five categories of expatriates that qualify for the five and ten-year residency visa: Investors, innovators, entrepreneurs, students, individuals with specialised talents (in the field of science, culture and arts), and retirees who can afford to invest in and add value to the UAE’s economy. The visas would be renewed automatically so long as residents continued to satisfy the terms and conditions under which they were granted the visa. Also, those eligible for the long-term visa and currently residing in the UAE have the option of transferring their existing residence visa to long-term visa if they meet the requirements.
As an entrepreneur, to apply for a five-year residency visa, you need to fulfil certain conditions. The key criteria are:
- Have a previous project with a minimum value of AED 500,000.
- Have accreditation certificates from the government.
- Have the approval of an accredited business incubator in the country.
The benefits of the entrepreneurial visa include:
- Five-year visa. This can be upgraded to an investor’s visa
- Five-year visa for a partner
- Five-year visa for three executives
- Five-year visa for dependents
- Permission to enter the UAE with a six-month multiple entry visa, which can be extended by six months.
To obtain the visa, applicants meeting the criteria in the approved categories need to pay AED 650 for the five-year visa and AED 1,150 for the ten-year visa.