This article has been researched and written by the Business Development team at Creation Business Consultants. AI has not been used in generating this article.
In the early 21st century, the UAE visualised establishing itself as one of the leading AI centres of the world through its progressive governmental policies coupled with a compatible setting for businessmen. Entrepreneurs and investors planning to establish AI companies in the UAE will find this guide helpful as it deals with location-related matters, licensing matters, and regulatory requirements.
WHY IS THE UAE IDEAL FOR AI BUSINESSES?
AI has been elevated by the UAE government as part of a long-term development strategy. Initiatives such as Vision 2030 and the National Artificial Intelligence Strategy 2031 highlight the steps taken to solidify the country’s position as a major global player in the AI space.
Economic Highlights:
AI is expected to contribute USD 25.7 billion to the UAE economy by 2030.
The Middle East is expected to yield USD 230 billion as a result of AI by 2030.
In 2021, the UAE saw over USD 500 million in AI-related investments, placing it in the top 10 globally for AI funding.
The UAE’s growing AI ecosystem provides countless opportunities for businesses across all sectors (healthcare, logistics, government, etc.).
The UAE has created a proper regulatory framework that ensures responsible adoption of AI with an emphasis on ethical standards, data protection, and intellectual property protections.
Some of the key regulatory aspects include:
AI Ethics Guidelines: Established in 2019, these shall guarantee ethical practice during the development and use of AI technologies, particularly in critical sectors such as healthcare and transportation.
Data Protection: These laws are formed at a worldwide level and shall enforce data and privacy protection. These laws, therefore, ensure responsible data collection and use.
Intellectual Property: AI companies are granted to register patents, software, and trademarks, which will enable ownership protections against their unauthorised use.
Following the regulations will create trust and credibility with clients and stakeholders.
FREE ZONE VS. MAINLAND JURISDICTIONS FOR AN AI BUSINESS
The AI company’s decision regarding Free Zone or Mainland jurisdiction will be dictated by the specific requirements for the AI business.
Jurisdiction
Benefits
Top Zones (if applicable)
Free Zone
• 100% foreign ownership. • Tax exemptions, free trade, pre-approved systems, and businesses utilising the latest technologies with access to world-class infrastructure. • Immediate adjacency to other technology-based companies.
• Dubai Silicon Oasis (DSO): Advanced infrastructure for technology-based start-ups and cloud computing. • Dubai Internet City (DIC): Home to global leaders and start-ups to facilitate collaborative exchanges. •twofour54 Abu Dhabi: Provides opportunities specifically for media and technology companies that are investigating AI possibilities within their content creation environments.
Mainland
• Full access to the local market. • Ability to tender for government and public tenders. • Ability to work without geographic restriction across the UAE.
N/A
Evaluating your business needs closely will help you figure out which jurisdiction is best.
LICENSING OPTIONS FOR AI COMPANIES IN THE UAE
Under the UAE law, operating an AI company will require the appropriate type of business licence to be issued.
Common License Types:
Commercial License: for AI organisations engaged in trading or the sale of AI-powered products.
Professional License: when the business offers consultancy, software development, or technical support services.
R&D License: for companies involved in research, development, and innovation of AI technologies.
Industrial License: for companies manufacturing AI-related hardware or robots.
Keeping the licence in compliance with the activities of the company will help satisfy regulatory expectations.
AI BUSINESS ACTIVITIES IN THE UAE
1. AI Research and Development
Development of leading-edge AI algorithms and technologies: This includes foundational research and development in areas such as machine learning, deep learning, natural language processing and computer vision.
Creation of new AI-powered products and services: This could include developing new applications in various fields, including healthcare, finance, transportation and education.
2. AI Software Development
Building AI-powered software solutions: This includes developing software that can analyse data, make predictions, automate tasks, and provide insights.
Creating AI-powered applications: This could involve developing chatbots, virtual assistants, recommendation systems, and other AI-driven applications.
3. AI Data Analysis and Consulting
Providing data analysis services with the use of AI: This includes the application of AI techniques to analyse data sets to derive meaningful insights.
Providing AI consulting services: This includes providing guidance to businesses on how to apply AI solutions within the business and using AI technologies to better perform their business operations.
4. AI Education and Training
Provide AI education and training opportunities: This could include providing training, certifications, and workshops in the field including artificial intelligence.
Provide educational resources around AI: This could include resources for online courses, material to provide tutorials, and learning materials around AI.
5. AI Hardware Development
AI hardware components: This includes the development of hardware specialised for AI like GPUs, TPUs, and other AI accelerators.
AI-powered devices: This could be the development of robots, drones, and other AI-powered devices.
STEPS TO ESTABLISH AN AI COMPANY IN THE UAE
Choose a Business Name: Select three name options to submit to the appropriate authority in accordance with UAE naming requirements.
Specify the Legal Form of your Business: A legal form can be determined, such as a Limited Liability Company (LLC) or a branch of an established company.
Identify the Business Activities: Determine the business activities you wish to conduct so that you can identify the necessary license requirements.
Establish Office Space: Select an office location that meets the regulatory guidelines and works for the way you would like to run your operations.
Obtain Initial Approval: Submit all of the paperwork, including the reservation of the trade name and business plan, to the appropriate authority for initial approval.
Apply for Trade License: The trade license application process is complete once you submit the supporting documents, pay the applicable registration fees, and receive your final license to operate once the application is approved.
LEGAL AND OPERATIONAL CONSIDERATIONS
AI companies operating in the UAE must abide by specific legal and operational compliance considerations.
Key Areas of Compliance:
Data Privacy: Businesses must ensure that the data is processed according to UAE regulations to ensure the users feel safe and secure.
Intellectual Property: Businesses must register their intellectual property to protect against infringement and to maintain a competitive advantage against other organisations that may copy their unique inventions.
Global Standards: The UAE has instituted legislation from around the world, such as GDPR, which provides businesses the ability to conduct business across borders, while ensuring that they abide by their own laws and internationally accepted norms.
CONCLUSION
The UAE has been promising infinite opportunities for AI companies thanks to its innovative infrastructure, supportive regulatory framework, and strong talent pool. With the selection of a proper jurisdiction, obtaining an appropriate license, and fulfilling the stipulated regulatory requirements, the business can lay a strong foundation in this rapidly evolving sector.
