We quite often receive requests for assistance with set-up of a tourism company. And it does not surprise us. Dubai sees millions overnight stay tourists. Having a growing market and a strong foundation for tourism, it comes as no surprise, that entrepreneurs are attracted to Dubai to enter the ever-growing tourism market. May be you are also considering setting up a tourism company.
It should be noted, however, that setting up a travel company in Dubai requires significant investments. Additionally, there is a list of requirement that also needs to be met. As such, in this chapter we want to shed some light on the budget you would require for setting up a travel company and requirements you would need to meet to be able to proceed with registration process.
In Dubai, all companies are registered and have the business activities they will be engaged in stipulated on their license. This ensures that companies cannot operate for purposes other than those for which they were registered.
For your tourism company you will be able to choose from three (3) main activities. You will be able to opt for one of them, for two or stipulate all three at the same time. These activities are as follows: Inbound Tour Operator, Outbound Tour Operator and Travel Agency. Let’s first see what each of three activities would allow you to do. Let’s start with an Inbound Tour Operator. As an Inbound Tour Operator you would be allowed to 1) organize local incentive tours or tours for foreigners; 2) handle visas; 3) organize transportation; and 4) organize accommodation. As opposed to Inbound Tour Operator, Outbound Tour Operator is allowed to organize and sell tourist programs abroad. And, finally, Travel Agency activity allows 1) selling air tickets on behalf of authorized agents; 2) carrying out hotel bookings and 3) car rentals.
To apply for and get any of the said activities mentioned on your company’s license, you need to comply with a number of requirements. Generally, all three of mentioned activities, require, first of all, that the manager of the company has relevant education and the same shall be proven by a legalized educational degree. Manager can hold a bachelor’s degree or a certificate of specialization in the Tourism or Travel Industry. Additionally, alongside relevant educational background, manager shall possess a minimum of 3 years of experience in the tourism industry.
Further requirement, when setting up a travel agency or a tourism company in Dubai, would be a police clearance certificate, that shall be provided with respect to all company’s partners and the manager. Clearance certificate shall be specifically requested from Dubai police office.
There is also a specific requirement in place with regards to company’s office space. It is mandatory for the entity to occupy an office space of a minimum of 30 square meters per activity for each of the activities we just mentioned. Thus, if an entity is operating under all 3 activities, it would be required to have a minimum office space of 90 square meters.
One should also note that each of the activities require an irrevocable bank guarantee in the name of the Department of Tourism and Commerce Marketing. The amount of bank guarantee varies from AED 100,000 to AED 200,000, depending on which of three activities you choose.
If you choose to establish a tourism company engaged in Inbound or Outbound Travel activity, you will also need to arrange for an insurance policy, covering all the risks associated with tourism plans offered, and conduct a feasibility study, highlighting the advantage it brings to the Tourism Sector.
In case you wish to register a travel agency in Dubai, you will need to obtain a Non-Objection Certificate (NOC) from the Civil Aviation Authority, Dubai.
In the event, you want all three (3) activities to be listed on the company’s license, you will need to ensure that you meet all the requirements, mentioned for each of the activities, and you place an irrevocable deposit totaling to AED 400,000.
These specific requirements will fall alongside the usual requirements of setting up a local company, such as registration and the need of having a local partner. Both of which encompass additional costs.
It should also be specifically noted that for companies in the travel/tourism industry, local partner remuneration is usually much higher (AED 30,000+) as it is a higher risk market segment. As such, we usually recommend to discuss this aspect with the local partner far in advance.
It shall be noted, that it is important to carefully consider all the requirements and costs associated with a company in the tourism or travel industry, prior to beginning the registration process. Your total costs will comprise of the following:
- License Fee – AED 13,000 – 17,000 (paid annually)
- Local partner fee – AED 30,000+ (paid annually)
- Office rent (min 30 sq. m) – AED 50,000 – AED 60,000+ (paid annually)
- Irrevocable guarantee – AED 100,000+ (one-time-payment)
- NOC – AED 5,000
- Other future government charges re Establishment Card, Visas of Employees etc.
With all this information in mind, you will be able to budget your travel company establishment in Dubai.
It is merely important to note that this market segment is strictly regulated. Therefore, it is of utmost importance to handle all matters regarding the new entity in the correct manner.
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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