Five Common Mistakes Made When Setting Up a Business in Dubai

Five Common Mistakes Made When Setting Up a Business in Dubai


Setting up your own business can be a very exciting matter! This can not only be thrilling but also challenging. 

UAE is a country with a plethora of opportunities and options for international companies and individuals trying to set up their business. In spite of having an exceptional commercial environment, tax benefits and proper rules & regulations we come across companies and individuals facing problems which could have been avoided in the first place had they diligently formed their company OR even better- had they taken proper legal advice.

Here are some of the most common points we suggest you keep in mind before setting up your business in UAE:

1. Relying only on information available on the internet 

The internet is loaded with information about the types of companies, the most efficient and cost effective free zone, the easiest set up route etc. Instead of wasting your time in researching the huge amount of data available freely – which could also confuse you- it is always preferable to seek advice from a legal consultant who can lead you in the right direction. The licensing rules and regulations keep changing and some requirements may not even be applicable to you!

2. Choosing the right licensing zone, type of company & business activity

It is very important to choose the right licensing location for your business. While deciding the licensing jurisdiction (onshore, free zone or offshore) companies should give primary importance to their long term objectives and factors like the type of business, the type and place of customers, possible government tenders, import and export etc. before making a decision. This also applies to the type of company and the business activity. Not every business in UAE can be done through an LLC with a general trading license OR a management consultancy in a Free Zone! 

3. Record your Partner Arrangements 

Business arrangements and personal relations play a huge role in UAE. Doing business with your best friend or a family member always gives you an amount of leeway to operate in the way you like. However, these relations sometimes fail to anticipate the possibility of a misunderstanding or disagreement in the future. In order to avoid lengthy and costly disputes between partners it is always prudent to record your business arrangement into a simple legal agreement. This will ensure that your once happy business does not turn into a bitter break up settlement!  

4. Reduce your haste to set up the business – Plan & tread with care at every step 

Once the decision to set up a business has been made time becomes money and everyone would like to have their company license issued within the shortest time possible. As much as we agree that this is normal, it is always better to carefully take each step. Take time and reconsider at every point if this is the right thing for the long term growth of your business. With proper planning and advice your small grocery store could soon be UAE’s biggest retail group! 

5. No need of short cuts

Gone are the days when setting up a company was a long and tedious process. With the steady flow of initiatives being constantly introduced by the authorities, licensing your business is no longer a boring or tiresome process. By getting accurate and up to date advice from legal consultants who have in-depth knowledge on the process and procedures, you no longer need any short cuts in setting up a company in UAE! 

Being one of the top law firms in Dubai, James Berry & Associates have qualified and experienced lawyers in Dubai who can assist you with your company incorporation requirements. 

To know more contact Deepa.

This is a general guide on the subject matter and should not be construed as specific legal advice.

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