The growth trajectory of the UAE’s franchise sector is on the rise, making it a lucrative opportunity for foreign investors. Understanding how to open a franchise in Dubai can be useful knowledge for entrepreneurs looking to set up a business.
Overview of the Franchise Business in UAE
The advantages a franchise business in UAE include:
- Business-friendly environment
- Increased chances of success due to established customer loyalty
- No taxes in free zones
- Setup costs managed by franchisor
- Heavy spending population
- Diverse customer base
- No local sponsor requirement (in most cases)
Popular Franchise Options for Entrepreneurs
The consultants at A&A Associate can streamline business setup in Dubai by offering expert end-to-end services that support entrepreneurs throughout the company formation process.
How to Open a Franchise in Dubai, UAE: The Steps
1. Find a Niche
The process starts with finding a niche, basically doing market research to figure out what works and who’s interested. This is an important step as it will determine the cost, location, and license application for your business.
Research involves:
- Analyzing market trends and competitors
- Conducting site visits and scouting locations
- Reaching out to your network
- Reviewing franchisor information and financial statements
2. Choose a Location
You also have to decide whether to go with mainland business setup or free zone business setup. Both jurisdictions have their own rules and application requirements.
Free zone | Mainland |
100% foreign ownership | 100% foreign ownership |
Simpler business setup process | Unrestricted market access |
Minimal tax obligations | Simpler expansion process |
100% exemption on customs duties | Bid for government contracts |
3. Apply for a Trade License
The trade license application can only be submitted after choosing a business structure, registering a business name, getting initial approval (for free zones), and preparing the paperwork and drafting a business plan.
Individuals can choose between the following business structures:
- LLC
- Sole establishment
- Partnership
- Free Zone Establishment
- Free Zone Company
The Department of Economy and Tourism (DET) handles mainland licenses while free zone licenses are regulated by the relevant free zone authority. There are a few types of business licenses in Dubai:
4. Get a Visa
You can get a long-term investor visa ( Golden visa ) which will allow you to live and work in the country for 10 years. You will also need to apply for residence visas for any employees you hire. This process can only be started once your trade license has been approved.
5. Open a Bank Account
A corporate bank account is necessary for running your business. You can work with an expert business setup consultant (like the ones at A&A Associate) to simplify the process. Our consultants have existing relationships with multiple banking institutions and can support you through the whole thing.
6. Start Your Operations
Once your business has the go-ahead, the next steps would be:
- Buying stock and supplies
- Hiring employees or part-time staff
- Designing and decorating the storefront
- Marketing and outreach
- Having a soft launch
- Starting business operations
Cost of Starting a Franchise in Dubai, UAE
The cost of starting a franchise in the UAE can be broken down into several factors:
Trade license
Initial franchise fee
Startup expenses
Business registration
Visa
Store rent
Inventory
Employee hiring
Advertising
Working with a business setup professional can give you a better idea of the UAE business setup cost and help you plan your budget and financing.
Types of Franchises in Dubai, UAE
There are two main types of franchises:
- Single-unit franchises: Under this agreement, a franchisee can only operate one franchise location. This type of franchise business in UAE requires a lower level of investment and risk.
- Multi-unit franchises: Under this agreement, a franchisee can operate multiple locations. There is more risk around this franchise type but the operator enjoys more control over the storefronts.
Let A&A Associate Handle Your Franchise Business Setup
Our business setup consultants provide seasoned guidance to anyone looking to start a business in the UAE. We can take you through the entire trade license, visa, and bank account process, along with giving you expert recommendations to set your business up for success.
FAQs
Popular franchise sectors in the UAE include food & beverage, restaurant & hospitality, health & wellness, and retail.
Starting a franchise in the UAE can cost around AED 50,000 to AED 500,000, depending on the type of business and storefront location.
A franchise is generally run by an individual (or multiple individuals) who have signed an agreement with an already established company to use their intellectual property, products, and branding to sell their products.
The price range for the initial franchise fee is AED 100,000 to AED 500,000. A business setup consultant will be able to give you an exact price.
Franchise owners will have to pay tax in the UAE if they operate on the mainland and are legal tax residents of the country. Certain free zone businesses will be exempt from tax obligations if they are conducting qualifying activities.
If you invest over AED 2 million in a business, you are eligible to apply for the Golden Visa. Franchise license holders in Dubai can get the 10-year visa if they meet the requirements.
