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Are You Looking to Start a Construction Business in Dubai?

Construction Business
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The total value of the UAE construction business sector has been estimated at more than one trillion dollars. Dubai is the crowned jewel of the UAE, with the largest share of the construction sector. Due to a steadily rising expat population, Dubai plans to deliver more than 160,000 new homes by 2021. With visitors projected to reach 25 million in the coming years, the city’s new hotel property pipeline continues to grow with expected boosts from Expo 2020 and the World Cup in 2022.

The UAE construction industry is expected to rise at an annual growth rate of 4.64 percent during 2019-23. It is expected to hit $101.2 billion by 2023 due to recovery in crude oil prices and a rise in non-oil product exports. It registered a growth of 4.2 percent in 2018.

The cost of construction in Dubai is lower than in most developed cities. It’s mainly due to intense competition and low wages. The profit margins are amongst the healthiest in the world, attracting construction firms of all sizes from across the globe.

The Fundamentals of Construction Business

The construction industry is robust, yet businesses fold every year from lack of a proper business plan and mismanagement of earnings. Having a background in construction is necessary to avoid costly mistakes from lack of experience. More specifically, you need to understand how the construction sector works in Dubai.

It is best to work within one of the major construction businesses in Dubai first or hire consultants with experience. This way you can learn the finer points of guiding your own business in the competitive local construction sector.

Finally, being able to forge relationships with major developers and your crew will often play a large part in developing your overall reputation as a contractor and business owner. We also encourage you to find the right Emirati partner with experience in the industry who can make the necessary introductions to state-owned developers. These developers often subcontract a large portion of their work to smaller companies, which can lead to a profitable long-term relationship.

Construction Company Licensing Process

After you’ve done your due diligence, start the registration process of your business at the Department of Economic Development (DED). Understand that there is no singular license category for a construction business. Instead, you must select the core activities of your construction business. You will need to contract professionals like consultants, designers or engineers in Dubai. These professionals can facilitate licensing and building permit acquisition.

Dubai Municipality has various requirements based on the type of projects that you plan to undertake as a construction firm. Your firm might require a financial guarantee of up to 2 million dirhams. Also, suitable labour camp housing for your staff if you undertake major projects. The rules are subject to routine review; therefore, we recommend that check with the authorities.

A construction firm can require approvals and clearances from the Water & Electricity Department, Building Department, Dubai Civil Defence Authority, RTA, Drainage & Irrigation Department. Each department requires a specific set of documents which if not submitted correctly can lead to costly delays.

Getting the Right Help

Whether you are thinking about launching a brand-new construction company or setting up a subsidiary of an international construction firm, you will need someone that understands the local landscape and can help you swiftly get the right license and permits.

We have helped many entrepreneurs turn their construction business dreams into reality. Let us help you solidify your aspirations through a free consultation where we can explain the process in detail – as with any construction project, taking the correct first step is critical to your success.

Gilbert Sakr

Do you need help in business setup or looking to start a business in Dubai? Here you will find all the information and business ideas you need for starting your own company in Dubai.

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