The economy of Dubai is estimated to be worth more than $102.67 billion. The real estate sector alone forms 7.2% of the economy of Dubai. Construction is such a major activity that about 24% of the world’s construction cranes are currently located in Dubai. There is a lot of demand for engineering services, and this includes engineering consulting services. So it is not uncommon to use the services of someone specializing in business setup in Dubai for establishing an engineering consultancy firm.
How to Open an Engineering Consultancy in Dubai, UAE
Engineering is a vast field with several specialized disciplines, so you need to choose which fields of engineering you plan to offer consulting services in. In Dubai, the recognized fields of engineering are
- Chemical Engineering / Petroleum Engineering
- Civil Engineering
- Electrical and Electronics Engineering
- Geological Engineering / Mining Engineering
- Mechanical Engineering
It is possible to offer engineering consultancy in more than one field, and you could get a business license that allows you to do so accordingly. It is to be noted that you need an engineer qualified in the same field who is also member of the Society of Engineers-UAE for every business activity mentioned on your license.
Depending on the level of technical expertise of your firm, your engineering consultancy firm in Dubai could be classified as one of the following
- Associate Engineering Firm
- Expert Engineering Firm
- Foreign Engineering Branch Office
An engineering consulting firm that is the branch of an overseas company must have a General Manager who has 15 years of experience and is a citizen of the same country where the overseas company is located
The classification is granted by the Dubai Municipality, which checks your educational credentials and prior experience in the field.
It also places you in one of the following categories
- First Category (Unlimited) – This enables you to take part in projects of any height
- Second Category (G+12) – This enables you to take part in projects up to 12 storey’s in height
- Third Category (G+4) – This enables you to take part in projects up to 4 storey’s in height
On the mainland, you are also required to have a Local Sponsor for your engineering consulting firm. The Local Sponsor is to own 51% of the shares in the company and must be an Emirati engineer who is a member of the Society of Engineers-UAE. In addition, he/she must hold a minimum qualification of B.Sc Degree in Engineering, having specialized in the same field that you offer engineering consulting services in. He/She must also have three years of post-qualification experience in the same field.
The above does not apply if you are planning to establish your engineering consulting firm as a Foreign Engineering Branch Office, or in other words, it is owned by another company located overseas. In such an instance, what you need is a Local Service Agent, who must be an Emirati aged 21 or older. The Local Service Agent owns no shares in your company, and the parent company owns 100% of the engineering consultancy firm in Dubai, United Arab Emirates.
It is also possible to start an engineering consultancy firm in a free zone, which is not part of the area in the United Arab Emirates designated as mainland. In a free zone, you enjoy 100% ownership of your company, irrespective of whether it is owned by an individual or another company located overseas. You can also import or export machinery and equipment without having to pay any import or export duties.
The difference is that you can only offer engineering consulting services to other companies located in the same free zone or other free zone. A company located in a free zone is not allowed to do business on the mainland in Dubai. So depending on the business model you have in mind, we would be able to advise you better on whether you should start your engineering consultancy firm on the mainland or in a free zone.
You also need to select a name for your engineering consultancy firm. The trade name, as it is called, must not contain any religious references. Terms like ‘Global’ and ‘International’ cannot be the first part of the company’s trade name. The use of a first name is allowed only if it is the first name of one of the shareholders. The names of countries and cities are not permitted to be a part of the trade name, although nationalities and the names of geographical regions are allowed.
A business setup consultant can inform you of all these regulations that pertain to company nomenclature in the United Arab Emirates. He/She can also run a search to see if the name you have in mind is available. Furthermore, he/she can reserve a trade name so that when you apply for company registration and a business license, it will be granted to you and not anyone who may apply for the same trade name before you do.
A business setup consultant can help you draw up the company formation documents and get them notarized. The company formation documents outline the name of the engineering consultancy firm, the reason why it is being set up for, and who the owner(s) is/are. The name of the Local Sponsor who owns 51% of the shares in the engineering consultancy firm, if applicable, is also mentioned along with the Local Sponsor Fee, which can be paid on a monthly / quarterly/ half-yearly / annual basis.
The Local Sponsor does not take home 51% of the profits from the engineering consulting firm. In fact, he/she will agree to sign over a Power of Attorney document that entrusts the running of the company to you. This way, you will be in full control over your engineering consultancy firm. The Local Sponsor legally represents your company before Government agencies, and helps you obtain work visas for your staff. So the Local Sponsor is to be compensated for his/her services towards your engineering consultancy firm.
You also need to find a suitable commercial space for your engineering consultancy firm. On the mainland, you need to enter into a Tenancy Agreement with the owner of the premises. This Tenancy Agreement must be registered so that it becomes a legally binding Tenancy Contract or Ejari, which must be submitted along with the application for company registration and a business license. The address of the space you have rented subsequently becomes the registered address of your engineering consultancy firm when company registration is granted.
All the necessary documentation is to be submitted to the Department of Economic Development, Dubai if the engineering consultancy firm is being established on the mainland. The General Manager of a Foreign Engineering Branch Office on the mainland may be interviewed by Dubai Municipality as part of the process. If the engineering consultancy firm is being set up in a free zone, the paperwork is to be submitted to the Free Zone Authority in charge of the respective free zone.
If everything is in order, company registration and a business license for your engineering consultancy firm are granted without delay.
You can then proceed to open a corporate bank account for your engineering consultancy firm. This way, you can make and receive payments with ease. Owing to strict anti-money laundering regulations in the United Arab Emirates, it is not easy to open a bank account. But with the right business setup consultant in your corner, the process could take as little as two hours instead of the whole day.
Why Choose A&A Associate For Opening Your Engineering Consultancy in Dubai?
At A&A Associate LLC, we have years of experience with company registration in Dubai. We can advise you in more detail as to what may be needed when opening your engineering consulting firm in Dubai. Till date, we have been of assistance to clients from 100 countries around the world. We have an excellent client satisfaction rate so far, and the aim is to do even better. For more information, please call + 971 56 408 6728 or send us a message using the form below.