Over the last few years, we have seen a huge spike in the number of software companies starting in Dubai. From global names like Noon to hundreds of small companies providing specialized software development services, Dubai has earned a reputation as the Silicon Valley of the Middle East. Whether you are a software developer looking to develop applications for your customers or have an idea for a new technology company, Dubai is a great place to start your software business. Here’s everything you need to know about starting a software company in Dubai.
The Advantages of Starting a Software Company in Dubai
Dubai is a very popular place to start tech startups. If you decide to start your own software company in the emirate, you will benefit from:
Reduce Tax Rate
The United Arab Emirates has very low tax rates on the continent – and if you decide to start your own software company in a free zone in Dubai, you will benefit from a 0% income tax rate. This means you can reinvest most of your profits in growing your software business in Dubai.
Huge Market for Software Companies
The United Arab Emirates has one of the most diverse economies in the Middle East. This means there will be tons of company’s right on your doorstep that could potentially be open to buying your product or service. Also, thanks to the UAE time zone, you are in an ideal location to serve customers from all over Asia, Europe and Africa!
Ease of Doing Any Kind of Business
Dubai is a place to start and run a business with ease. Software company approvals in Dubai are often granted within a few days, and there are very few restrictions on what you can do, how you manage your money, and who you hire.
Massive Amount of Skilled Workers
Dubai is home to a large number of skilled workers with experience in all kinds of programming languages, user interface design and UX research. There are also plenty of people with other skills needed to develop a software company – including sales, marketing, branding, and more!
Infrastructure and Support
Dubai has all the infrastructure software a company needs, including a high-speed internet connection, a central local cloud server and fully equipped office space. Plus, you’ll have access to a multitude of support industries and partners who can help you with everything from hardware to legal, compliance and public relations.
Networks of Local and Foreign Investors
Dubai is home to many angel investors and venture capital firms. If your software has potential, you will find many investors open to funding your business idea.
Cost of Starting Software Company in Dubai
A single number to start a software company in Dubai cannot be given due to various factors. Against this background, a rough minimum cost can be calculated. If you’re just starting a sole proprietorship and starting in the free zone, the initial setup price will likely be between AED 150,000, with an annual renewal fee.
If there is more than one owner and you have multiple employees and more office space, expect AED 50,000 as a minimum to start your business. However, keep in mind that there are more costs than the company registration and basic application fee. This includes things like:
- Utility costs such as internet, energy, lighting etc.
- Costs for various types of software you need to run a technology business
- Savings to pay yourself and your employees until you begin making a profit
- Initial marketing costs
- Security deposits on office space
- Fees to any local partners you work with to set up your business
- Hardware costs for yourself and your employees
Depending on your financial situation and the estimated time it will take to market your software, it is recommended to save at least AED 100,000 to get through the first few months in business. If these savings are not available to you, it might be worth seeking funding for a software company in Dubai.
Steps to Open Software Company in Dubai
With the ease of doing business in Dubai, starting a software company in the emirate is relatively easy. However, it is important to follow these steps properly. Failure to provide all the correct information can slow down the application process.
Choose a Business Name
You must have a company name for your business that does not include any abbreviations or use language that could be blasphemous or offensive.
Select Location for Business Setup
Most software companies in Dubai choose to be in the free zone (which offers 0% tax and full control of the business) or on the mainland (which allows you to sell software directly in the UAE and have access to government contracts).
Decide Your Business Activity
You must choose a legal entity, e.g. Sole proprietorship, LLC, or otherwise.
Complete the Application Process
You need to apply for a trade license from the authorities (they work with the Ministry of Communication and Information Technology and Dubai Department of Economic Development) and pay all relevant fees. A local partner can help you through the entire application process and ensure that you have provided all the correct information.
Articles of Association
You will need to fill out an AOA (Articles of Association) that describes your company’s goals and business model.
Register for VAT
Software companies started in Dubai must apply for VAT.
Open a Corporate Bank Account
Another important step in starting a software company in Dubai is opening a company bank account so you can receive payments as well as pay your employees and yourself.
Documents Needed to Start Software Company in Dubai
If you are planning to start a software company in Dubai, you must provide the following documents:
- Application form
- NOC (no objection certificate) for any expatriate partners
- Partnership agreement setting up on the mainland
- Photocopies of your passport if you are a foreign national
- Photocopies of visas for yourself and all your staff (if they are foreign nationals)
- Articles of association
- Partnership agreements for companies with more than one partner