The United Arab Emirates is synonymous with world-class infrastructure and top-of-the-line urban facilities. The country has experienced exponential growth in various sectors, primarily driven by business-friendly policies and the presence of several international companies. In addition to ease of doing business, the UAE offers considerable tax advantages to entrepreneurs, business owners and investors. Like other sectors, the facility management sector has also grown significantly in the UAE over the last few years.
The facility management in the UAE is now beyond the simple concept of cleaning and maintenance services. It encompasses several other facets and has gradually become a comprehensive service that includes both hard services (mechanical, plumbing, electrical) and soft services (cleaning, landscaping and security). Many companies that have established their facility management setups in the UAE are now considering options for regional and global expansion.
Here is everything you need to know to set up a facility management business in the UAE.
Step-by-Step for Getting the Facility Management License
Unlike general trading, the Facility Management license involves technical approvals, strict compliance with the Real Estate Regulatory Authority (RERA), and specific activity codes.
The license acquisition process involves multiple stages, each requiring distinct documentation for approvals.
1. Jurisdiction Selection: Mainland vs. Free Zone
Similar to any other license acquisition process, the first step is to determine the jurisdiction. In the UAE, investors can choose between a Mainland or a Free Zone entity.
- Mainland: A mainland license for establishing a facility management business is issued by the Department of Economic Development (DED). It is often the preferred choice for facility management businesses as it allows direct trade within the local UAE market. Business owners can also participate in government tender bidding without intermediaries.
- Free Zone: Establishing a free zone company is ideal for businesses seeking tax benefits and 100% foreign ownership. The free zone license restricts the company’s operations to a particular zone. However, for mainland projects, a business can collaborate with a local distributor or obtain a civil work permit. The free zone companies, however, can easily expand globally.
2. Activity Selection and Name Reservation
For businesses seeking a facility management license, it is essential to select the correct business activities. For this purpose, the most common activity type is “Facilities Management Services” (Activity Code: 7020002 in some registers). It is crucial to note that this specific activity often requires the manager to have a relevant educational background or experience. After selecting the activity, the next step is to reserve a unique trade name with DED.
3. Initial Approval and RERA Compliance
In the next phase, investors must apply for Real Estate Regulatory Authority (RERA) registration. All Facility Management Companies must be registered with RERA. Based on experience, staff qualifications, and financial stability, the RERA issues a grading for the applying company, and the higher the grading, the better the chances of securing more lucrative projects.
4. Office Space and Lease Agreement (Ejari)
The operational requirements for a facility management company also require a physical office space. The lease agreement or Ejari must be submitted to the authorities to establish operational capacity. The operational agreement is thoroughly reviewed, and the physical property is inspected during the approval process.
Cost Considerations
All business and corporate licenses have a specific fee structure. For a facility management license, investors can expect an initial fee of AED 20,000 to AED 40,000. This includes a collective fee for government dues, trade license, and name registration. However, it excludes office space rent and staffing costs.
How Carltrix Streamlines the Process?
The UAE welcomes promising businessmen and talented entrepreneurs, offering cutting-edge infrastructure and business-friendly initiatives. While setting up a facility management business is relatively straightforward, the overall process involves multiple steps that can be overwhelming for investors and entrepreneurs. This is where Carltrix serves as a vital partner and helps with the entire process, from license acquisition and regulatory compliance to bank account opening and RERA grading assistance.
Contact Carltrix today for a free consultation on setting up your Facility Management company in Dubai. We handle the paperwork so you can focus on the project.
