Is construction business profitable in Dubai?
Dubai is one of the most attractive countries in the world and has shown huge growth in the construction sector in the recent years. Dubai has most attractive destinations, many eye-catching sites and beautiful beaches and the sky-scraping infrastructure. There are quite a lot of other large as well as small buildings projects are in progress in different parts of Dubai. The city is a centre to the world’s highest building i.e. Burj al Khalifa. World’s peaks residential building i.e. Marina 101 is also in Dubai.
The government has also initiated many other development projects in the construction sector to boost up travel and tourism sector. UAE government also support the foreign investors and business aspirants to get the appropriate resources and adequate approval need for setting up the construction business. They offer a great opportunity for the starting of a construction license in Dubai. Getting the necessary permits and licenses for the construction business has been simplified.
The diversification of the economy has resulted in the lowering of construction costs and has most economical construction costs compared to the other developed cities all around the world such as New York, Doha, Paris, San Francisco etc. The availability of labour poses a huge question in any of the construction activities.The increasing competition, the upcoming major global events and the tax-free environment allows the various construction companies to give a good return on investment.
If you are looking to setup of a construction company in Dubai is one of the most money making sectors and one of the most profitable businesses in the long run.
What are the different types of construction licence in Dubai?
There are 2 main type of license available for Construction Company in Dubai.
- Commercial license (LLC): Gives the right to conduct physical construction activities.
- Professional License: Gives you the eligibility to carry engineering, designing and project management.
In additiona there are so many kinds of a construction licence and each one has different requirements as well as difference regulation.
- Wrecking and Demolition License- with this license, you will be allowed to engage in destroying buildings and other structures, which are in rundown conditions and are at the edge of collapse, or for replacement using different techniques, such as cranes for high rise buildings, excavators, and manual for medium buildings as well as building implosion using explosives.
- Building Contracting License – under this license, you will be involved in constructing all kinds of works like residential, hospital, airports, farms, commercial, schools, industrial, public and agricultural buildings.
- Building Maintenance License-This license will allow you to maintain buildings without any equipment or extensions available inside, like restoration and reparation of roofs, columns, walls, floors and others.
- Steel Construction and Contracting License-Activity Description – with this license, you will be allowed to execute all operations related to steel constructions and install steel structures on sites, such as warehouse, factories, sheds, storage place, bridges, structure, and tunnels.
How can I start a construction company in Dubai?
- Choose the company structure : Before starting up a construction company in Dubai you need to decide whether you want to set up company in mainland or freezone. When starting a construction company in Dubai, you can operate from the UAE mainland or from a free zone. In both cases, 100% ownership is possible; however, if you start a mainland business, this type of holding would need additional approval.
- Select your company name: While choosing company name you must adhere to certain requirement . The name should not include any offensive or blasphemous language or the names of any well-known organisations. You must also avoid abbreviations if naming your company after yourself.
- Apply for a licence: If you are setting up a construction company in the mainland you need to take the necessary approval from the DED Department of Economic Development. Since construction company is in the commercial sector category one needs to get a commercial license for the same.
- Obtain a building permit: Once you receive the licence you need to get partner with the civil engineers and business consultants to acquire a building permit in order to achieve allowances for various business activities.
- Get an additional approval: Get a Building License from the relevant authorities like Dubai Municipality, Civil works and Environmental licences etc.
- Apply for the visa: You can apply for your visa and the process involves a medical, chest X-ray and blood test.
- Open your corporate bank account: Open a bank account for your construction company to trade in the UAE as per your operations and transactions.
In addition to approval from Dubai Economic Department , Dubai requires to have other mandaotry approval to setting up a construction sector in Dubai Mainland.
- Drainage and irrigation department –to take care of the liquid waste management and other kinds of disposable services.
- Water and electricity department –to get some the amenities to the owners.
- Building department and Dubai civil defense authority – to makes sure that the construction guidelines and norms have been adhered to.
- A civil works permit, which includes works before any foundations
- For a building permit, the contractor needs to submit the design drawings of the proposed building by the relevant authority
- An environmental license from the relevant authority
- An approval from the Roads and Transport Authority to access the road and internal road network for transportation purpose.
- A license from Etisalat for telecommunication needs.
- Completion Certificate allowing the building to be occupied.
How much would it cost to start a construction business in Dubai?
The cost for opening a construction business is completely depends on the required facilities and location, however the initial registration and legal costs would start from approximately AED 25000/-
In addition to the above you would need to bear the additional cost for the initial investment, capital, rent of the premises, Municipality Fees, Interior decoration charges, Visa costs for all the staff and other operational costs.
To make it easier, once you have your business plan ready in your hand, you can always take help form the expert business setup consultants who will assist you through the process to obtain a licence for your healthcare business in Dubai, UAE.
Infographic on how to start your construction business in mainland Dubai
Complete Guide to UAE Corporate Tax 2023: Updates, Implications, and Strategies
UAE Corporate Tax - A Basic Starting Guide! The United Arab Emirates (UAE) Ministry of Finance (Ministry) has recently announced a Federal Corporate Tax on business profits for the first time in...
GCC Residents: Apply for UAE Entry Permit in 6 Simple Steps | GDRFA Online Service
A Step-by-Step Guide to Applying for a UAE Entry Permit for GCC Residents The General Directorate of Residency and Foreigners Affairs (GDRFA) in Dubai has launched an online service for residents...