How to provide services in the UAE

How to provide services in the UAE

Services and business in the Emirates play a pivotal role in the dynamically advancing economy of the region. The UAE has positioned itself as a worldwide commercial hub, offering unique opportunities for multinational entrepreneurship and investment. With a stable economy, advantageous geographical location, and a progressive legal system, the UAE attracts investments, fostering accelerated development in various business sectors. From a global financial and legitimate perspective, the UAE stands out as an epicenter with developed structure and enticing parameters essential for conducting entrepreneurial activities.

General overview of the business climate in the UAE

The United Arab Emirates stands as a remarkable example of successful economic enhancement, transforming from a traditional economy based on oil and natural gas extraction into a dynamic multi-industry hub. This region now holds a pivotal position on the global business map, offering unique opportunities for multinational entrepreneurship and investment.

A key factor contributing to stability and progress in the UAE is strategic resource management and an active policy in economic broadening. The government places comprehensive emphasis on developing sectors unrelated to oil production, such as tourism, technology, and monetary services, thereby reducing dependence on hydrocarbon resources. This, in turn, establishes a favorable climate for commerce and investment.

The consumer market in the United Arab Emirates is characterized by cultural diversity and high income levels among residents, creating a conducive climate for businesses focused on offering a variety of services. UAE residents are open to innovation and the latest trends, particularly in the fields of technology and digitization, making this region attractive for firms looking to offer innovative products and services in the local market.


The UAE government's initiatives to engage foreign investments include offering tax advantages, providing economic support, and streamlining business processes. Substantial investments in the enhancement of modern infrastructure make this country appealing to foreign entities intending to operate in the service sector in the UAE. Additionally, the reliable legal system of the United Arab Emirates guarantees the protection of rights and interests of investors, serving as a crucial factor in establishing a stable investment ambiance.

Legal and regulatory aspects for the provision of services in the UAE

The provision of services in the UAE is strictly regulated to ensure high-quality standards and consumer protection. For successful operations in the service sector, entrepreneurs must carefully study and adhere to applicable laws and regulatory stipulations.

Regulation and Legislation in the Service Sector in the UAE:

Control over the service sector in the UAE encompasses numerous legal and regulatory documents. The primary ones include:

  • Federal Law No. 2 of 2015 on Commercial Companies establishes fundamental principles and rules for the registration and management of businesses in the United Arab Emirates. It encompasses regulations pertaining to corporate entities, the rights and obligations of shareholders, and the responsibilities of directors.
  • Federal Law No. 5 of 1985 on the Civil Code regulates matters related to contracts and obligations, which is particularly crucial for companies providing services.
  • Federal Law No. 24 of 2006 on Consumer Protection establishes rules and standards aimed at safeguarding consumer rights and regulates connections between consumers and service providers.
  • Federal Law No. 18 of 1993 on the Regulation of Commercial Activities covers aspects associated with domestic trade, including the import, export, and distribution of goods and services.

Regulatory specifications and conditions for service businesses in the UAE

Companies functioning in the service sector in the United Arab Emirates are mandated to conform to established local protocols covering multiple aspects of their activities. This includes certification processes, obtaining licenses, and undergoing periodic inspections. Per example, the standards set by the Emirates Authority for Standardization and Metrology (ESMA) define quality and safety criteria for a wide diversity of products and services.

Additionally, a crucial aspect is the protection of data and confidentiality. With the heightened international focus on privacy issues, companies must comply with rules related to the processing and storage of customer personal data. This encompasses adherence to regulations outlined in the Federal Law on Information Security, governing the protection and processing of personal data.

Significant attention is also given to ethical standards and business transparency. In the UAE, corporate governance standards are in place to enhance transparency, accountability, and fairness in business practices. This involves compliance with principles outlined in the Corporate Governance Code, which provides recommendations and regulations for managing service-oriented firms in the UAE, encompassing their structure and internal processes.

Agencies that control the service sector in the UAE

In the United Arab Emirates, various government bodies and authorities play a pivotal role in monitoring and supervising the service sector in the UAE.

The Department of Economic Development (DED) is liable for licensing and regulating economic operations in each emirate. This agency ensures companies' compliance with business regulations, establishes standards and norms for various business sectors, and contributes to the development of the economic environment.

Commencing entrepreneurial activities is possible after obtaining the necessary approvals from the DED, which vary based on the specific type of activity and the business's location.

Given the business's specificity, additional regulators may come into play, such as the Dubai Health Authority for medical services or the Abu Dhabi Department of Education and Knowledge for educational services in the UAE.

Advantages of doing business in the service sector in the United Arab Emirates

Engaging in commercial activities in the service sector in the United Arab Emirates brings forth a range of privileges, making this domain particularly appealing to entrepreneurs from various corners of the world.

Favorable tax climate
The UAE offers one of the most attractive tax regimes globally, including the absence of income taxes, significantly reducing the tax burden on businesses.
Developed banking system
The country boasts a sophisticated and reliable banking system with a wide array of financial services, facilitating both domestic and international financial transactions.
High purchasing power
Considering the top level of prosperity, the UAE serves as a market with substantial purchasing power, creating favorable conditions for offering diverse services.
Government support
The state provides significant support to the business sector, implementing various programs and initiatives aimed at stimulating entrepreneurial activity and investments.
Low bureaucracy
The UAE operates a simple and straightforward business registration and management system, greatly simplifying business operations and reducing administrative costs.
Promising domestic market
Due to rapid economic growth and population diversity, the UAE's domestic market offers extensive opportunities for business development and expansion in the service sector.
Equal competition
UAE's policies are geared towards ensuring a level playing field for both foreign and local entrepreneurs, fostering a fair and open business environment.
Ease of hiring
The country provides a straightforward process for hiring qualified personnel from both the local and international labor markets, facilitating the search and recruitment of needed specialists.

These aspects collectively shape a favorable environment for the growth and prosperity of enterprises in the service sector in the UAE, making this region attractive for both emerging and established businesses.

Identifying a profitable area for service entrepreneurship in the Emirates

Identifying a promising niche in the services sector in the UAE begins with an analysis of sectors where there is high demand for a variety of services. Let's look at the key sectors and business opportunities:

Services sector


Accounting and finance

Tax consulting, financial management, accounting services

Healthcare and medicine

Medical clinics, pharmaceutical services, diagnostic laboratories

Information technology

Software development, cybersecurity, IT support

Consulting services

Management consulting, personnel consulting, strategic planning

Logistics and transport

Courier services, vehicle rental, warehousing

Education and training

Vocational training, educational programs, advanced training courses

Catering and restaurant business

Cafés and restaurants, catering, food delivery

Recreation and entertainment

Organization of events, entertainment centers, cultural visits

Translation services

Translation agency, linguistic support, interpretation and translation

Manufacturing and agriculture

Growing crops, agricultural services, farming

Beauty salons and personal care

Hairdressing, cosmetology, spa and wellness

Cleaning and cleaning services

Dry cleaning, cleaning services, cleaning of premises

Sports services

Sports clubs, organization of competitions, training sessions

Repair service

Repair shop, consumer services, minor repairs

This table provides a comprehensive overview of various service sectors in the UAE, along with corresponding examples of services that can be offered in each niche. This information will assist entrepreneurs in identifying the most promising areas for further business growth, considering the current demand and market trends in the United Arab Emirates.

Types of legal entities for creating a company in the services sector in the UAE

For launching and managing a business in the service sector in the UAE, choosing the right legal entity is a pivotal factor. It determines the tax structure, level of legal responsibility, and opportunities for conducting business activities. The United Arab Emirates offers diverse forms of legal ownership, each with its unique features and criteria.

Structure of legal entity




LLC (Limited Liability)

A limited company suitable for small and medium-sized companies.

  • Protection of personal property.
  • Management flexibility.
  • The need for a local partner (for some business areas).
  • Minimum capital depending on the region.

Branch of a company from abroad

Expansion of a foreign company allowing it to conduct business in the UAE under the management of the parent company.

  • Full management of a foreign entity.
  • Prospects for penetration into the local market.
  • The need for a local service agent.
  • Inability to engage in activities that the parent company does not engage in.

Company in the FEZ (Free Zone Company)

A company registered in the UAE within a free economic zone, offering peculiar tax requirements.

  • 100% foreign ownership.
  • Tax exemption.
  • Restriction on doing business outside the FEZ.
  • Compliance with the specific rules of the SEZ.

Offshore company

A company intended for commercial activities outside the UAE is usually used for international operations.

  • Tax benefits.
  • Confidentiality.
  • Restrictions on doing business inside the country.
  • Compliance with intercontinental protocols.

Public joint stock company

An entity with a division of capital into shares, suitable for large projects and public offerings.

  • Possibility of attracting public investment.
  • Capital increase.
  • Minimum authorized capital.
  • Compliance with regulatory requirements.

This table provides a comprehensive overview of the various legal forms available to establish a service company in the UAE, outlining their features, benefits and key requirements.

Obtaining permissions and licensing for business in the service sector in the UAE

Acquiring certificates and licensing for a service-oriented company in the UAE is a process that commences with identifying the type of license corresponding to the nature of the business. Options encompass commercial, professional, industrial, or tourism licenses, as well as specialized licenses for specific sectors such as healthcare or education.

The specifics of licensing vary depending on the field of activity.

Field of activity

Licensing features

Medical services

Permission from the Ministry of Health and Prevention, accreditation of medical staff, and compliance with equipment standards are required.

Educational services

It is crucial to obtain a license from the Ministry of Education, as well as comply with educational standards and criteria.

Consulting services

Permission can be acquired from the Department of Economic Development (DED) of the relevant emirate. Consulting services in the UAE encompass business consulting, financial and licit consulting, HR consulting, environmental and engineering advice, and marketing and advertising strategies.

Tourist services

Licenses for travel agencies, guides, event organizers, regulation and licensing are carried out by the Department of Culture and Tourism.

IT and technology

Determined by the project, specialized licenses related to cybersecurity or software development may be required. Issued by the Department of Economic Development (DED). Additionally, permission may be required from the Telecommunications Regulatory Authority (TRA), which is answerable for overseeing information technology and telecommunications in the UAE.

Moreover, in the United Arab Emirates (UAE), conducting specific kinds of operations in the service and service sector may require compliance with special conditions and restrictions. This is particularly relevant for complex and highly regulated sectors such as financial services, healthcare, and education. For instance, banks, investment funds, and insurance companies need a certificate from the UAE Central Bank. These companies face strict conditions for capitalization, reporting, and compliance with anti-money laundering (AML) and Know Your Customer (KYC) norms.

After determining the suitable licensing option, the next phase is the company registration process, involving the selection of the legal structure of the enterprise, whether it be a private limited liability company, a branch of a foreign company, or an entity in an economic free zone. Subsequently, a licensing request is submitted to the Economic Department of the respective emirate or to the management authority of the unconstrained zone, accompanied by the necessary documents, including a business strategy and copies of the founders' passports.


After providing the application, the next stage involves a verification and approval process, which can vary depending on the type of operations and may require additional permits from specialized institutions. Upon completion of this process and the payment of the government fee, the business acquires a license to function in the service sector in the UAE.

Procedure for launching a business in the service sector in the UAE

To commence providing services and undertaking maintenance works for both individuals and organizations within the UAE, entrepreneurs should meticulously study national laws, ensure the alignment of their business concept with market requirements, and explore the feasibility of acquiring all necessary permits and certificates for the chosen line of activity. The regulatory framework of the United Arab Emirates particularly underscores the significance of professional training and specialized education for the leaders and personnel of organizations offering expert services in the UAE.

Stages of registering a company offering services in the UAE:
  1. Crafting a business strategy involves formulating a business model, assessing the business concept, adapting to the dynamics of the regional market, and defining the legal structure of the enterprise.
  2. Choosing the business domain entails pinpointing a suitable site for enrolling the enterprise in the UAE, encompassing selecting between different emirates and free trade zones.
  3. Official company registration concludes the process, formalizing the legal entity at the enterprise's operational location.

This structured registration procedure involves not only compliance with all legislative requirements but also careful planning and adaptation of the business model to the specificities of the market in the United Arab Emirates. Successfully navigating all stages will enable entrepreneurs to legitimately conduct their activities in the services and service sector within the UAE, adhering to the high standards of quality and professionalism required in this country.

Taxation in the UAE

The tax structure in the United Arab Emirates deserves special attention from entrepreneurs due to its unique features. The UAE is renowned for its low level of tax burden, especially when compared to many other domains.

Specifically, the UAE has a corporate tax set at 9%. However, this tax is only levied on the annual revenue surpassing 375,000 AED (approx. 102,000 USD). Meanwhile, companies registered within Free Zones may qualify for an exemption from this tax.

VAT in the UAE is applicable to the majority of goods and services, including but not limited to:

  • Sales and leasing of goods and real estate.
  • Provision of various services in the UAE, including consultancy and educational services.
  • Import of goods and services from abroad.

However, there are several categories of products and services that are either exempt from taxation or subject to a zero-rate tax. In the case of a zero-rate tax, companies may be eligible to reclaim the VAT paid on their input transactions.

Exempt from VAT:

  • Financial services, including certain types of banking transactions.
  • Sale of certain types of real estate, including residential properties.
  • Domestic passenger transport services.

Zero-rated VAT:

  • Export of products and services outside the Gulf Cooperation Council (GCC).
  • International logistics and related services.
  • Investment gold, silver, and platinum.
  • Education services and products related to education.
  • Provision of specific medical services and related goods.

The oversight of VAT is carried out by the Federal Tax Administration (FTA) of the UAE. Businesses with a turnover surpassing the prescribed minimum threshold are required to enroll as VAT taxpayers. This entails the liability to maintain accounting records, submit tax declarations, and settle the tax responsibilities.

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