How To Start A Travel Company In The UAE?
The process of starting a travel company in the UAE is a straightforward one. However, a new business set up anywhere around the world should not be taken lightly. That is why we have sequentially comprised the steps you need to follow to start a travel company in the UAE. If you follow the process step by step, you can start your own travel company in the UAE without any complications.
Here are the steps you need to follow to set up a travel company in the UAE:
- Business activities
First, you will have to decide what type of travel company you want to set up. The type of travel company will depend on the business activities you mean to pursue. For example, you could be an inbound tour operator or an outbound tour operator. That means you could provide services to the citizens of the UAE to help them travel to other places in the world. Or you could provide services to the tourist from other countries who want to travel and see the UAE. The business activities you mean to pursue will dictate the additional approvals you need to get.
- Economic jurisdiction
You can set up a travel company in any one of the two economic zones in the UAE. The two economic zones are the mainland and the fee zones. There are advantages and disadvantages in both of these economic jurisdictions. Here are a few of the differences between the mainland and the free zones.
|Mainland businesses are not geographically limited when doing business.||Free zones business can only conduct their business activities in their respective free zone.|
|Mainland businesses can get clients from anywhere in the UAE and outside the UAE.||Free Zone businesses can only take contracts in the free zones they are located in.|
|Mainland businesses have to rent their office premises and furnish them.||Free zones businesses get excellent infrastructure, tax exemptions, and asset protection.|
|Some mainland businesses do not allow 100% to foreigners.||All free zone businesses can be 100% owned by a foreigner.|
|There are very limited trade restrictions for mainland businesses in the UAE.||Free zones businesses need a local service provider to provide their services outside of the free zones.|
- Legal structure
Your travel company in the UAE needs a legal structure. The type of legal form your business takes will decide the rules and regulations it will be subjected to. Here are some of the legal structures allowed in the UAE:
- Sole Proprietorship
- General Partnership
- Joint Venture
- Public Shareholding Company
- Private Shareholding Company
- Limited Liability Company
- Civil Company
- Professional Company
Be careful when selecting from one of these because your choice will dictate a lot of important factors. For example, in a limited liability company, your personal properties will be safe in case of bankruptcy. However, in a sole proprietorship, you need to pay the debts of the business from your personal belongings in case of bankruptcy.
- Company name
You need to register a trading name for your travel company before getting a trade license. This is because your trade name needs to be unique. It cannot match with the trade names of any other businesses that are registered in the UAE. If the name is already used outside the UAE but is not used in the UAE, you can still trademark it for your business. Keep in mind that certain terms in the trade name of your business incur extra fees in the trademark process.
- Trade license
As the UAE is a top travel destination for people from all around the world, there is growing competition in the tourism industry here. To regulate the tourism industry in the UAE, the authorities have started the tourism trade license. For starting a travel company in the UAE, you need to get a tourism trade license. The Department of Economic Development in Dubai is responsible for handling the registration of new trade licenses. You will need to apply there to get your tourism trade license. Here are the steps you need to follow to get your license explained briefly:
- Initial approval
Before the Department of Economic Development in Dubai provides a trade license, you need to get an initial approval certificate from them. For getting the initial approval, you need to fill an application form that requires vital information about your business and submit it with some important documents. If everything checks out, you can move on to get the external approvals.
- External approval
You need to get some additional licenses depending on the business activities you chose to pursue. For a travel company, you need to get these external approvals from the Department of Tourism and Commerce Marketing, also known as the DTCM. You also need a No Objection Certificate from the Civil Aviation Authority if you mean to sell airline tickets through your business.
- License fees
Finally, you need to fill a final application form and pay the required fees. A mainland trade license in the UAE costs around AED 15,000. A free zone trade license costs around AED 12,000. After you have paid the fees and submitted the required documents with the filled application form. The Department of Economic Development in Dubai will provide the tourism trade license within a few days if everything is according to their standards.
- Corporate bank account
The last step is to get a corporate bank account. This is the last step because you need a trade license to get a corporate bank account. Choose the bank wisely because different banks have different requirements. Some are better for small businesses while others are better for big corporations. It is suggested that you take advice from company and business setup professionals to select the best bank for your travel company in the UAE.
The bottom line is that these processes are very crucial and any error in the steps will cause costly delays. That is why you should take help from experts who have experience with business setup in the tourism sector. They have the necessary connections in the Department of Tourism and Commerce Marketing (DTCM) and the Department of Economic Development in Dubai.