The United Arab Emirates is known for its innovation and strong business ethics. The country’s business culture and ecosystem are uncompromising. On the one hand, it provides multiple opportunities to start a business, but on the other hand, the country also ensures that companies comply with regulations at every step. This is the main reason why aspiring entrepreneurs choose to start their business in the UAE.
If anyone plans to open a business or expand a branch in the UAE, they should select a company name in accordance with the guidelines provided by the UAE government. In most countries, you can name your company according to your choice, but the United Arab Emirates takes a bold step. Its ethics and rules apply to everyone.
For example, in India, one can name their startup almost anything, except for a few exceptions. However, the UAE does not offer this advantage.
The UAE government prioritise open and transparent business to ensure the seamless movement. Therefore, when selecting a company name, it is essential to follow the rule of providing clarity and precision to avoid misleading customers. The name should describe the nature of the business. Furthermore, the name should not include any reference to the UAE government bodies.
The same rule follows with opening a subsidiary in the UAE. If you are opening a subsidiary company, the name must be similar to, or at least slightly different from, the name of the parent company. Plus, if you're expanding a company branch, the name should exactly match the parent company, as you can't have two names under one umbrella. Joint ventures have the option of using the same name as the parent company, but if they do, they must provide a letter of explanation or a No Objection Certificate (NOC).
Importance of a Business Name in the UAE
The business name is important in any country. This suggests your company's activity, and it reflects more than just a brand identity - it positions your company legally in the market. It is used in government dealings, trade licences, tax registrations, and contracts.
The trade name must;
- Clear and separate your business from other companies
- Avoid religious and politically inspired entities
- Sound respectful with public decency.
Not following the rules can lead to;
- Company rejection
- Delays in legal proceedings
- Penalties for misleading customers
- Renaming if a stakeholder leaves the company and their name is used.
Why Can’t Companies Use Religious Names in the UAE?
As we all know, the UAE is an Islamic country. The rules and regulations for companies, banks, and other entities are strict. Companies can’t use God’s name or similar names, as this may lead to legal action. Moreover, taking interest in a personal capacity in the UAE is prohibited under Article 458 of the UAE Penal Code, which treats it as usury and can result in imprisonment and substantial fines.
How to Register a Business Name
Here is what you need to do to register the name of your business:
1- Give at least three preferred business names to the Department of Economic Development (DED). The more options you give, the greater your chances of getting a favourable name.
2- Reserve the name to avoid its use by someone else. Depending on the location, a name reservation usually lasts for two to eight weeks, after which it becomes available to the public. While some places may reserve the name without charge, the reservation fee may range from AED 100 (approximately USD 27) to AED 1000 (approximately USD 272).
3- Proceed with the company registration process.
Final Thoughts
Selecting a business name in the UAE involves more than just brainstorming a catchy name; it also requires careful consideration of the legal aspects. The name must comply with certain mandatory requirements that vary from one jurisdiction to another.
Markai Corporate Services is available to assist you with every aspect of company formation in the UAE, including suggesting compliant business names.
