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Construction Business Setup

Construction is one of the first businesses that humankind developed, and it continues to shape our daily life in unique ways. Virtually all other businesses rely on the construction industry to provide and maintain their accommodation, plants and infrastructure, and construction is a determinant of where and how almost everyone lives, works and plays. For nearly the entire population of the world, the built environment heavily influences quality of life.

Early in 2013, the Abu Dhabi Government committed to fund a further AED330 billion for major developments over the next five years, focusing on social development, particularly healthcare, education, housing and selected strategic transport projects.

Same time in Dubai, expansion of existing conurbation continues and construction activity remains steady through the various projects taking place, including the completion of the Downtown Dubai and Business Bay projects. Further work was intended in and around Dubai’s second major airport, Maktoum International. Dubai with in short span of time has setup a bench mark in construction business by erecting ‘Burj Khalifa’ as the modern wonder of the world.

The main players in construction projects in the UAE are, as in other jurisdictions:

  • The project developer, generally referred to as the employer.
  • The contractor.

Employers tend to fall into one of the following categories:

  • Commercial and leisure real estate developers (often wholly or partly government-owned).
  • Public works authorities and public utilities (again usually government-owned, although there are examples in the UAE of power, water and infrastructure facilities being procured through public private partnerships (PPP) structures with the government party participating in the project company.
  • Oil and gas companies (including state-owned organisations such as Abu Dhabi National Oil Company).

Consultants are typically engaged to provide the following services:

  • Architecture.
  • Civil and structural engineering.
  • Mechanical and electrical engineering.
  • Project supervision.
  • Project management.

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Under the most commonly used procurement and contractual arrangements (involving both local and international parties), the employer engages its own design, supervision and project management consultants and separately procures a contractor to construct the project according to that design.

Permits & Licence Registration Requirements

Dubai Municipality G + 1 permit required and other mandatory permits from the other department

  • Drainage and Irrigation Department
  • Water and Electricity department
  • Building department
  • Dubai Civil Defence Authority

Types of licence

  • Contracting Licence
  • Wrecking & Demolition licence
  • Building Maintenance Licence
  • Steel Fabrication contracting licence

Why to open a construction companies in Dubai?

The outlook for the UAE construction sector is positive for the years to come. Although the low oil prices pose real challenges for a country in which the hydrocarbons sector still contributes 34.3% to the nominal GDP (2014), the construction sector is set to benefit from further development of tourism, international events such as Expo 2020, major government investments in transportation infrastructure and even from the current political unrest in the region, in which the UAE continues to have a ‘safe haven’ status. This concise study will look into ongoing construction activity in the UAE, spread across residential, commercial, hospitality, healthcare and infrastructure segments. Opportunities and challenges will be highlighted. Anyone wanting to explore the construction market in further detail, is most welcome to contact the FIT-office in Dubai.

A large number of infrastructure works have been started in recent years in the United Arab Emirates. Major roadway, airport, and port (upgrade) projects are ongoing in preparation of further expected population influx and of the upcoming Expo 2020 event in Dubai. The ongoing airport expansion project at Dubai International, worth USD 7.8 billion, will increase the airport’s current capacity from 60 to 90 million passengers per year by 2018. Dubai’s second airport, Al Maktoum International, was opened for cargo operations in 2010 and opened its doors to passengers in 2013. When the USD 32 billion expansion will have been completed, the airport will be the largest in the world, able to accommodate more than 160 million passengers and 12 million tonnes of cargo per year.

THE PROJECT SECTORS ARE :

Healthcare
Hospitality
Retail
Office
Residential
Infrastructure

Forecast for the UAE construction sector remain largely positive. The continuous growth of the population, along with major government investments, makes for a large number of projects in healthcare, leisure, hospitality and residential sectors. More care is being taken by investors and developers with regards to feasibility and correlation of supply and demand.

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