Establishing a Company in the UAE in the Energy Sector

Because of the rising population and the current climatic conditions, the demand for water and electricity is growing at a rate of 9% per annum. The energy industry is amongst the top industries in Dubai, which is also a reason to venture into this field.

If you are thinking of setting up a company in the energy sector in UAE, here’s what you need to know. The major laws regarding setting up or establishing a new company in this sector in Dubai are as follows:

• the Electricity Law;
• the Dubai Office Resolution Act;
• the Dubai Electricity and Water Authority Act.

The main authority that provides the licenses and also supervises various energy companies in Dubai is called the Dubai Electricity and Water Authority or DEWA.

What is the process of setting up an energy company in Dubai?

The process of registering a company in the energy sector is similar to that of any other area or type of business. Here are the steps to set up a company:

• Complete the process of incorporation as per the Department of Economic Development
• Then apply and get the necessary licenses with DEWA
• Private sector companies should get a power generation license or a water desalination license so that they can be allowed to operate in Dubai
• Some other special licenses are needed by companies, which deal in the renewable energy sector

UAE has also been in news because of various technological developments in its Energy sector as Dubai Electricity and Water Authority (DEWA) became the first-ever government organization, which launched Rammas, a virtual employee, and used artificial intelligence (AI) technology to respond to and solve customer queries.

The UAE Energy and Power industry is a very lucrative option in terms of investments and even for setting up businesses into renewable energy, and also in the field of providing service to infrastructure, for example, technology, engineering, and other professional services.

What are the advantages of setting up a company in the energy sector in Dubai?

• UAE offers a tax-free environment.
• There are many incentives for companies in the green energy sector.
• There are many loan programs available.
• UAE has many government schemes aimed at various segments of the energy sector.

Where can you set up a company in the Energy Sector in the UAE?

Mainland: Setting up a company in the mainland can be very advantageous. The main benefit is that it offers the flexibility to carry on the trade in any part of the UAE, besides giving unlimited visas and also exemption from business and/or personal taxes. The expenses you could incur in setting up your business in the mainland would depend on the following:

• What is the nature of your enterprise and which license is required? If it’s a commercial, industrial or service-oriented activity?
• What is the legal form of your company? Is it a company or a branch of an existing company?

Free Zones in UAE

Masdar City Abu Dhabi: This free zone lies near Abu Dhabi International airport and has come up as a global clean-technology hub because it places enterprises at the very heart of the global renewable energy and the clean-tech industry. If you set up your business here, you can get a range of benefits like 100% foreign ownership and also exemption from all the corporate taxes.

Dubai Multi Commodities Centre (DMCC): DMCC is a government entity, which was established back in 2002 to improve commodity trade flows going through Dubai. DMCC, a global centre for 14,100 plus businesses, offers many benefits for companies who are thinking of setting up their business in the UAE. It also plays a very important role in Dubai’s goal to be a diverse and dynamic economy.

Dubai Silicon Oasis (DSO): This is a 100% government-owned free zone, which was established back in 2005. Its aim is to aid and encourage modern technology-based industries and therefore support the area’s demand for expansion of trade and business. There are a lot of incentives and advantages that companies get while functioning within this free zone.

What are the entity options for energy companies?

If you are looking to set up a company in the energy sector in the UAE, the following options are available for you:

• Limited Liability Company
• Branch
• Commercial Agency

If you have any other queries and need information regarding how to set up or start an energy company in the UAE, feel free to contact us and we will be happy to assist you.