Side hustles, second jobs, and sideline businesses are not new. The COVID-19 pandemic forced second jobs on many people around the world.
In a bid to diversify its income from solely oil and gas industries, the United Arab Emirates updated its business regulations and visa laws to encourage startups and support SMEs.
You might have a business idea or see a niche in the market for a service you can provide, but you lack the confidence and startup capital to take your idea to the full.
Even if you’re working a full-time job for a company in Dubai, you can still start your own company. In this article we’ll shed light on the types of special permission, regulations and requirements you need to follow to start your own company while still being employed full-time.
Setting up a business in Dubai is straightforward when you partner with a local company setup agent. Trade License Zone’s experts can take care of your new company formation, licensing, banking, visa updates, registrations, and everything else needed to get you trading in Dubai.
What is an NOC letter?
The UAE’s labour laws allow a person employed by a private company to start their own business while working full-time by getting a No Objection Certificate (NOC) from their employer. There’s a caveat: it is the employer’s discretion whether to accept or reject the NOC letter application requested by its employee. Issues that may see an NOC letter application rejected are often security and compliance matters.
A No Objection Certificate (NOC) is a prerequisite to legally setting up a business while being employed in Dubai. A NOC letter is a legal document that any agency, company, organisation, or institution may issue to an applicant.
The purpose of the NOC letter is to state that the issuer has no objections nor contractual obligations towards procedures or activities an individual is going to conduct.
An employee may request an NOC letter from their employer’s human resource department for their future endeavours and visa purposes.
Reasons to get an NOC letter in Dubai
It is important to know when, how, and who can apply and make use of NOC letters.
Before the recent business laws were updated, employees who sought to start their own business while remaining employed were required to present a No Objection Certificate from their employer and visa sponsor to the Dubai Department of Economic Development (DED).
The changes to these business laws saw this requirement fall away, allowing employee to undertake part-time new job. However, sometimes, an NOC letter from a primary employer is still required for the secondary employer and for visa purposes.
An NOC, while mostly a formality, is still a legal document necesary to update a person’s DED business proile and visa status. Other reasons to get an NOC in Dubai are:
- Opening certain business bank account types or internet accounts
- Sometimes used for getting a UAE driving license and buying of cars
- Renewing/adding activities to your business
- Adding a partner to your business
- Opening a branch of your business
- When changing jobs from one private company to another (especially in dealing with your compensation package or visa sponsor)
- To lift a labour ban (for visa purposes)
- Certain visa application processes, immigration-related requirements and other inquiries
For a person on a family visa, taking up a second job requires the employee to apply for a NOC before being allowed to start their part-time or second job. The NOC must be submitted to the Ministry of Human Rights and Emiratisation (MoHRE) in order for the person to legally start their second job.
How to get a No Objection Certificate (NOC) from an Employer
As we’ve mentioned, getting an NOC letter is a sometimes a legal requirement to start your own business while being employed in Dubai. This enables an individual to apply for a business license in a free zone under their visa for a new company. These are the steps to this process to follow:
Step #1: Documents required by an employer to get a NOC letter
These are the documents employees must submit to their employer in application for an NOC letter:
- Passport copies of all partners in the new company
- Proof of the new company’s name reservation from the UAE’s Registry Office
- Copies of the new company’s Memorandum of Association (MOA) and Articles of Association (AOA)
- Bank or cash guarantee of AED 50,000
Step #2: Requirements to request a NOC letter from the Department of Economic Development (DED)
At the same time, a person should request an NOC letter from the Dubai Trade Portal to submit to the Dubai Department of Economic Development (DED). The process is straightforward:
- Request an NOC from the Dubai Trade Portal’s offices or website
- Submit the same documents for your employer to the Dubai Trade Portal
- You’ll need to pay an NOC issuance fee of AED 500
- The DED takes over the No Objections Certificate process from the Dubai Trade Portal at this point
- The DED will issue your NOC letter should it be successful
- Once you received your NOC letter, store it with your new company’s documentation
When a NOC Application is Successful
Once the employee has got their NOC letter, they’re allowed to set up their new business. The next phase is somewhat complex, but you can seek the guidance and assistance of a local company setup expert such as Trade License Zone to support your company formation process.
When you work with Trade License Zone, we’ll manage the entire incorporation process for you, and guide you through the latest government regulations regarding your new sideline business. Contact us for a quote to see how we can get your trading as soon as possible.
When a NOC Application is Denied
Your employer has the legal discretionary right to deny or approve your NOC letter application. Should they decline your application, it doesn’t necessarily spell the end of your plans to start a business while being employed by a company in Dubai. There are three options available to you.
Option #1: Choose a free zone that doesn’t require an NOC
Partnering with Trade License Zone, we’ll help you select the appropriate free zone for your new business that doesn’t require a NOC from the employee’s company. Our experts at Trade License Zone will manage all aspects of your company formation process, business licenses, and guide you to trade in Dubai.
Option #2: Start a company using a spouse’s visa
The working employee can set up the new company in the name of their spouse or relative by structuring the company with them as a Business Partner or Managing Director. The work can still be legally undertaken by you in these circumstances.
Option #3: Apply for a DED Instant Licence
An employee wishing to start a new company while being employed can apply for a DED Instant Licence. This will enable them to conduct their new job and business under specific guidelines of the UAE’s business regulations. For this license type from the Dubai Department of Economic Development (DED), you don’t need to submit any physical documents. Here’s the steps for you to follow:
- You can visit the Dubai Department of Economic Development’s office to apply for your UAE Pass
- Using your Emirates ID, register on the official DED portal to update your business profile to access your UAE pass
- Create your new company’s account on the DED’s website with the necessary information
- Sign the electronic MOA document and submit it for the DED’s approval
- The DED’s website will submit approvals for business partners to activate
- Generate and pay the licence voucher fee for your DED Instant Licence
- Provide the approval of your business partners. For this, they send an automatic message of consent to all the partners
Starting a Freelance Business in Dubai
It is possible for an employee working full-time in Dubai to start a freelance company. For such a company and undertaking, an NOC letter is actually not required to get started.
As we’ve mentioned, partnering with Trade License Zone as your local company setup agency will be the first step to opening any type of business in Dubai. Our specialists will manage all aspects of your company formation process, business licenses, and guide you to trade in Dubai.
A person can get a freelance business license and permit in two ways: applying for a freelance license from Dubai’s Department of Economic Development (DED) or from one of Dubai’s free zones specific to freelancers.
In order to avoid making errors or running into delays, contact Trade License Zone’s specialists to help set up your freelance business, apply for the right free zone license, and get set to legally operate your new freelance company in Dubai.
Conclusion
Starting a new company while being employed in Dubai is possible, rewarding, and lucrative when done properly. The UAE government has designed the company formation and business license processes in the UAE with simplicity in mind in navigating the legal requirements. Understanding the No Objection Certificate (NOC) and working with the correct government agencies will see you starting your new business smoothly and swiftly.
That said, it takes some hard work and in-depth knowledge of the region, its markets, its many customs and regulations.
That’s why it’s always advisable to sign up with the services of a UAE business setup company to guide you on your company’s license and setup based on your needs and budget.
When you work with Trade License Zone, we’ll guide and manage the entire incorporation process for you, and guide you through the latest government regulations regarding your business, whether it be a freelance business or a conventional company (requiring an NOC letter to start). Get in touch today for a personalised quote and competitive advantage.
We’ll give you peace of mind that your license and visa applications are free from errors and omissions – both of which can lead to delays and rejection. All you need to provide is some basic documentation and some information about your business. Then, sit back and let the experts take care of the rest – managing your license and visa applications, communicating with all relevant government departments and authorities, and reporting back when you’re ready to trade. It is that simple.