Mistakes When Setting Up A Business In Dubai? (Question)


  1. Relying only on information available on the internet.
  2. Choosing the right licensing zone, type of company business activity.
  3. Record your Partner Arrangements.
  4. Reduce your haste to set up the business – Plan tread with care at every step.
  5. No need of short cuts.

Is it difficult to start a business in Dubai?

Dubai is the commercial capital of United Arab Emirates. Startups in Dubai also get perks on investments and tax advantages when compared to other countries. But irrespective of the approachable business setup procedures, it can be difficult for a new entity to understand the process of setting up a business.

What are the challenges of doing business in the UAE?

Top 10 challenges of doing business in the United Arab Emirates

  • Getting set up.
  • Finding office space.
  • Speaking the language.
  • Adhering to the culture.
  • Watching the time.
  • Getting credit.
  • Understanding the tax environment.
  • Work permits and visas.

What is the easiest business to start in Dubai?

If you’re looking to start a business in Dubai, here are some successful business ideas in Dubai for your consideration.

  • Travel and Tourism.
  • Real Estate Agency.
  • Health Sector.
  • Handyman Business.
  • Consultancy Service.
  • Beauty Salon.
  • Restaurant Business.
  • Cleaning Services.

How much money do you need to start a business in Dubai?

To set up an onshore business in Dubai costs a minimum Dh34,340 ($9350), the rankings note, and requires payment of myriad fees. These include Dh15,000 for a general trading licence, plus fees of Dh10,000 to Dubai Municipality, Dh3,000 to the Ministry of Economy and Dh1,200 to Dubai Chamber of Commerce.

Do you really need a sponsor to start a business in UAE?

A corporation formed and licensed in Dubai must have a local sponsor to set up a business in Dubai. The UAE national, which is the sponsor, will hold 51% of the shares of a company owned by individuals or a group of expats.

Can a company be set up in Dubai mainland without a sponsor?

So, is it possible for a Dubai mainland without a local sponsor? The answer is yes. Aspiring entities can achieve this by forming a civil or a professional services company in Dubai Mainland.

What are the disadvantages of doing business in Dubai?

Disadvantages Of Doing Business In Dubai

  • UAE Company Possession.
  • Home-Grown Sponsor.
  • Taxation And Project Subsidy.
  • Cultural And Traditional Tenants.
  • Statements Style.
  • Trade And Business Marketplace.
  • Handling Profits.
  • Business Particulars.

What are problems that Dubai facing?

Invasive species, carbon footprints, limited water resources, overfishing, waste generation, air pollution and land degradation and desertification are posing an environmental threat to the UAE.

How is Dubai doing economically?

DUBAI, United Arab Emirates — Dubai’s economy contracted by 10.9% year-on-year in 2020, data from the Dubai Statistics Center revealed, reflecting a city hit hard by the coronavirus pandemic and the halting of global travel.

Which business is profitable in Dubai?

1. Import & Export. Import and export business in Dubai is such a lucrative sector and is, of course, #1 on our list. Given Dubai’s central location and economic diversity, starting an international trading business in Dubai can be rewarding in terms of expansion opportunities and profitability.

What is the cheapest business to start in Dubai?

List of Low investment Business Opportunities in Dubai

  1. Food Business. Restaurant business has always been in the limelight as one of the most profitable businesses in Dubai.
  2. Consultation Service. People lack information and awareness of many things.
  3. Content Writing and Copywriting.
  4. Real Estate.

How can I make money in Dubai?

19 ways to make money online in Dubai, UAE

  1. Online Tuitions. Taking online tuitions is one of the best ways to make money.
  2. Blogging. Blogging is the current trend on the internet.
  3. Photography.
  4. Freelancer.
  5. Fitness Instructor.
  6. Mobile applications.
  7. Arts and Crafts.
  8. Ebooks.

Is it easy to start business in UAE?

Setting up a business in a free zone is relatively easier. Free zone authorities require minimum paperwork and duration. Here are the key steps to set up a business in a free zone. Determine the type of legal entity your business would take up.

How much does a business license cost in Dubai?

From small and medium enterprises to multinational companies – all types of businesses need to be licensed to operate legally. If you are wondering how much a small business license cost in Dubai, then the quick answer to that is minimum AED 8000 to AED 10000 (approx.).

What is the cheapest Freezone in UAE?

Ajman Media City is the cheapest free zone in UAE. This freezone offers investors a range of business activities and business license types at the lowest cost.

10 Mistakes Made When Setting Up A Business In Dubai

With so many different business structures to choose from, it can be difficult to figure out which one is the best match for you. There are more than 50 free zones to select from, and onshore enterprises may choose from more than 2500 different business activities to conduct their operations. The most cost-effective solution is not necessarily the best one. What you want is a compliant business structure that optimizes your earning potential both now and in the future. This is the finest value you can obtain.

Setting up a company that lacks credibility

Some banks are increasingly refusing to open corporate bank accounts for businesses based in particular regions, citing regulatory concerns. The inability to obtain banking accounts might effectively render a freshly founded firm useless in the long run. Before making a commitment, make certain that you will have access to the proper banking solutions for your company’s specific needs.

Putting shareholders investments at risk

Having the incorrect ownership structure for your firm might result in you losing control, putting the money of your investors at risk as a result. In order to run a successfulDubai mainland / onshore business, you must know what to watch out for and how to choose and appoint a trustworthyCorporate SponsorNominee. Similarly, if the shareholdings of free zone enterprises are properly constituted, the risk associated with them may be eliminated. This is a danger that can be reduced by more than 85 percent if the appropriate advice is taken and executed.

Not planning for the future

Establishing a business solely on the basis of today’s necessities may result in you spending the expense of establishing another company in a year’s time. According to research, 64 percent of businesses pay needless fees to alter their company licenses between the ages of 18 and 24 months after being established as a result of inadequate forward planning. Save both time and money by establishing your firm in the most efficient manner possible from the beginning, confident in the knowledge that it will continue to be appropriate as your activities expand.

Errors on company trade licenses

Almost one out of every three businesses has a mistake on their trade licenses. Mistakes like these may be extremely costly to the shareholders, with the average cost of rectification being AED 10,000. These mistakes are caused by a number of factors, including erroneous company formation, failure to keep up with changing rules, and a lack of knowledge of the operations and requirements of your firm from the start. Before incorporating, double-check that you have the appropriate trade license and activity for your firm.

Operating with the incorrect license

When your firm is in operation, it is necessary for it to acquire the appropriate license. It is possible to be fined up to AED 100,000 if you make a mistake on this. Not only may the corporation be subject to sanctions, but the General Manager himself could be held personally accountable and penalized.

Make certain that your firm’s structure is appropriate for the sort of trade you intend to engage in in order to safeguard your shareholders, the company, and the General Manager.

Not maximizing profitability opportunities

Three-quarters of all businesses founded in 2018 missed out on chances that might have increased their profitability. Having an in-depth understanding of government processes and laws will guarantee that you get the maximum number of activities on your trade license when starting up your business. This provides investors with access to new target markets and income sources, which helps to increase profitability and return on investment.

Not understanding local laws and regulations

An Australian lady may face up to 6 months in prison and penalties if she allowed people to work for her firm without the proper permits on their behalf. Understand the rules and regulations that you will be obliged to adhere by is critical before beginning your journey. Once your firm has been established, make sure you have an expert educate you with the applicable legislation so that you may avoid making costly mistakes.

Not keeping up to date with current and changing regulations

The United Arab Emirates, like all governments, routinely alters and updates legislation and regulations that affect business owners. It is critical that you understand the rules that you must follow in order to avoid fines, prison time, or worse, and that you are aware of when changes will have an impact on you, your company, and your shareholders. This legislation, Federal Law No. (2) of 2015 on Commercial Companies in the United Arab Emirates (UAE), is only one of several regulations that investors and managers in the UAE must adhere to.

9 Common mistakes made while setting up a company in UAE

The United Arab Emirates is one of the most investor-friendly countries in the world. With a slew of commercial advantages and cost-effective Company Formation packages, the United Arab Emirates is a desirable site for company formation. As an entrepreneur establishing a business in the United Arab Emirates, there are several factors to consider in order to ensure a smooth company creation and a successful sustained commercial operation in the area.

Don’t make these errors when setting up your company in UAE

Here are nine common mistakes people make while starting a business in the United Arab Emirates.

1. Not choosing the right Free Zone, Company Activity and Business License

The selection of the appropriate Free Zone, Company Activity, and Business License is a critical stage in the formation of a company in the United Arab Emirates. Solution: Make certain that the appropriate Business Activity and Business License are selected. The United Arab Emirates (UAE) provides a variety of choices for business incorporation. It is possible to establish distinct free zones for certain types of commercial activity. Additionally, particular business permits must be secured in order to conduct business in the United Arab Emirates.

2. Violation of Employment Agreements

An individual who is employed by a firm is not legally entitled to establish a business in the United Arab Emirates unless the employer has given a No Objection Certificate for the purpose.

Additionally, new enterprises in the UAE must adhere to the country’s employment regulations. Employers are not permitted to hire individuals who are in possession of a Visit Visa at any time.

3. Improper Legal Agreements with Local Sponsor

For mainland business creation, one needs hunt for a local UAE national sponsor who will be responsible for the new firm’s establishment. The local sponsor from the United Arab Emirates will own 51 percent of the company’s stock. The shareholding agreement must be formalized in a legal document with the appropriate legal structure.

4. Not choosing the right Free Zone Company Registration PackageChecking on the available Office Spaces

Freezones provide a diverse selection of workplace options. Make sure you examine the availability of your preferred office space so that you don’t wind up having to pay extra for a larger-sized office space as a result of a lack of availability.

5. Opening a Bank Account for Business without checking the Bank Charges

The bank fees are a considerable amount of money, especially for start-ups and freshly established businesses. Confirm any hidden fees and requirements with the bank’s customer service representatives in advance. The investor must select a bank that meets their specific company needs and is active in their industry. Banks in the United Arab Emirates impose a variety of fees for transactions such as credit/debit cards, checkbooks, foreign fund transfers, and so on.

6. Lack of Agreements or Signing Unenforceable Contracts

Businesses are frequently conducted on the basis of trust and verbal agreements. However, if there is a future disagreement, it will be difficult to establish the assertions made. As a result, written contracts are the most dependable and legally binding form of contract.

7. Relying Solely on Information Available on the Internet

There is a plethora of information available on the internet about company creation, numerous licenses, business setup packages, and other related topics. The material available on the internet will be extremely beneficial in raising awareness and gaining a basic grasp of the company formation procedure.

8. Not Planning for Worst-Case Scenarios

Even if risks to a business cannot be completely avoided, they may be reduced to a certain extent by purchasing insurance or entering into a well-documented legal contract. It is possible that preparing for the worst-case scenario can aid in risk reduction in the event of any unforeseen situations affecting the firm or business owner.

9. Not Registering Intellectual Property

IP (Intellectual Property) is a highly crucial component of starting a new firm, particularly for branding and marketing purposes. It will be beneficial to the business owner in terms of future economic advantage. Intellectual property rights have the potential to protect all of a company’s assets. The mistakes listed above are the most typical ones made by start-ups and entrepreneurs who are new to doing business in the United Arab Emirates. Using the services of an expert business consultant will help you save time, effort, and money when it comes to company formation and business support requirements in the United Arab Emirates (UAE).

Aurion Business Consultants is the company to contact.

Common Mistakes to Avoid Before Setting Up a Business in the UAE

Starting a business in the United Arab Emirates may be an exhilarating and rewarding experience. It may be both thrilling and hard at the same time to be in this situation. The United Arab Emirates (UAE) provides a diverse variety of options and possibilities for international enterprises and individuals wishing to create a corporation. Despite the fact that we have an excellent business climate, tax incentives, and appropriate laws and regulations, we still come across businesses and individuals who are experiencing difficulties that could have been avoided if they had done their due diligence when forming their organization or, even better, if they had sought proper legal advice when starting their organization.

List of Mistakes that Entrepreneurs Tend to Make

Here are some common mistakes that new business owners make that may be avoided with a little forethought.

Mistake No. 1 – Having the Wrong Structureand License

There are several forums for exploring new ideas in the United Arab Emirates, which is a very accessible market for commerce and manufacturing. The first and most exciting stage of bringing a notion to life is the establishment of a business and the acquisition of a license. To engage in any commercial activity, a license from the proper regulatory authorities is required. Entrepreneurs wishing to establish a new business in the United Arab Emirates can choose from a number of different incorporation options.

Choosing the incorrect arrangement or performing the incorrect allowed operation (or failing to do any approved activity at all) might result in a variety of fines or, in the worst case scenario, expose shareholders to personal responsibility.

Mistake No. 2 – The Wrong Choice of Jurisdiction Within the UAE

One of the most common mistakes people make when entering a new market is picking the inappropriate jurisdiction to do business in. Making the mistake of choosing a free economic zone in the United Arab Emirates results in problems with market implementation. In the United Arab Emirates, there are more than 50 mostly independent jurisdictions, each with its own set of features geared to certain sectors. It is possible that the organization you choose will not be willing to carry out your wishes due to inconsistencies in the conditions for operating a service in different jurisdictions, and that you will be unable to carry out previously scheduled commercial operations as a result of this inconsistency.

Mistake No. 3 –Improper Legal Agreements with Local Sponsor

In order to successfully create a mainland firm in the UAE, it is necessary to acquire a local national sponsor in the country. The local sponsor in the United Arab Emirates would own a 51 percent stake in the company’s equity. The shareholding structure must be recorded in a legally binding manner in order to be valid. Any partnership agreement, as well as any other management and ownership terms, must be documented in some manner. It will protect you in the case of a shareholder disagreement, as well as ensure that the firm continues to run smoothly after that.

In order to avoid further legal disputes, all parties must reach complete agreement on their respective expectations and record it in writing.

Mistake No. 4 –Relying Solely on Information Available on the Internet

A wealth of information is available on the internet, including information on various types of enterprises, the most accessible and cost-effective free zones, the quickest method to get started, and so on. Rather of wasting valuable time sifting through enormous amounts of publicly available material, which may be overwhelming, it is frequently preferable to get legal advice from a knowledgeable practitioner who can direct you along the proper road.

The rules and regulations regulating licenses are continuously changing, and some criteria may not even be applicable to you in certain circumstances.

Mistake No. 5 – Hasting Things Up

This is perhaps the most prevalent miscalculation committed by many business owners and entrepreneurs. Taking your company seriously is definitely encouraged, and the best method to do so is to pay close attention to every action that is made by your employees. This guarantees that you are not tempted to make quick decisions, which your experts would likely warn you against doing. You should still consider your options before making a decision, but if you do, make sure you stick with it.

Mistake No. 6 –Not RegisteringYour Intellectual Property

It is likely that intellectual property is one of the most important intangible assets a firm may have, especially given the present economic climate. The value of intellectual property is derived from the potential future economic advantage it can provide its owner, as well as its capacity to exclude rivals from a certain market. Entrepreneurs are so preoccupied with product creation that they fail to register their intellectual property, allowing competitors to easily take advantage of their efforts to copy their ideas.

Mistake No. 7 –Violation of Employment Agreements

In the UAE, an employee who is employed by a company is not permitted to establish a business unless the employer has received a No Objection Certificate to that effect (NOC). In addition, new businesses in the UAE must comply with the country’s labor regulations. It is not authorized for employers to hire persons who are in possession of a Visit Visa at any time.

Mistake No. 8 –Not Planning for Worst-Case Scenarios

The presence of risk factors in business cannot be avoided, but they may be mitigated to a certain extent by the purchase of insurance or the execution of a well-documented legal agreement. Having a strategy in place for the worst-case scenario can help to reduce the likelihood of an unanticipated circumstance occurring for the company and the business owner.

Mistake No. 9–Not Including Appropriate Exit Clauses in Your Partnership Agreement

If you are establishing a new business, the last thing you want to think about is the risk that things will not go as planned. However, in the middle of all of the excitement and potential that the future has to offer, it is critical that you consider your escape strategy in the event that you need one. A multitude of causes might lead to the termination of a business relationship, the majority of which are amicable. Although this is true, it is vital to be prepared for all possibilities in order to avoid being caught in a situation that can drain your resources as well as your time and, ultimately, your organization.

Mistake No. 10 – Not Learning About Business Laws of theCountry

To keep in mind, this is something that is incredibly important. Regardless of whether you have lived in this nation for a long time or are traveling for the first time, you should get familiar with company legislation. Knowing is not enough; the organization must adhere to all applicable rules and regulations at all times.

Consultation with a corporate law professional or lawyer, or a combination of both, is recommended. In addition, they’ll keep you informed of crucial legal requirements and give advise on dealing with any legal concerns that come up in the course of your business.

How to Avoid Making These Mistakes?

Recognizing that running a business is challenging, we provide our assistance. It should not be necessary for you to go it alone when it comes to understanding and navigating foreign processes, norms, and policies. As your local affiliate, we’re here to assist you in easing the stress of running your business by giving business ideas and services. For almost two decades, Riz and Mona Consultancy has been delivering high-quality business formation and organizational services to clients throughout the Middle East and North Africa.

To find out more about how we can assist you with your business strategy, please contact us immediately.

Common mistakes in setting a company in the UAE – NR Doshi & Partners

Establishing a business is not a simple undertaking, and it should not be handled lightly. A commitment, devotion, time, and financial investment are required in the process of turning a concept into reality. For an entrepreneur, the weight of tasks to accomplish and phases to finish can be daunting; nonetheless, keeping the flow continuing is essential to success. As an investor-friendly country that offers several economic advantages, the United Arab Emirates (UAE) is a desirable site for entrepreneurs to establish a firm.

  • entrepreneur and investor Despite the exhilaration and excitement of establishing a firm in the United Arab Emirates, there are a number of obstacles that may arise during the process.
  • Each of them has a list of various packages, each of which offers a different set of advantages.
  • In order to choose the appropriate office size for their start-up, the entrepreneur needs carefully examine the various packages available.
  • The entire cost of the company registration package, as well as the features included, must be carefully examined and compared in order to pick the most appropriate one for your firm.
  • Before making a decision, business owners should research the initial account opening fees, account types offered, account limits or any other limitations, hidden or recurring costs, and any other requirements that must be met.
  • The selection of the most appropriate business license The United Arab Emirates provides a wide range of business licensing choices.
  • Despite the fact that some licensing categories offer greater benefits, it is possible that the features offered may not be the same when and if the start-up plans to expand its product line.

In the alternative, it may result in fines, legal actions, or personal liability for the stockholders.

Ensure that the agreement is accurately prepared, read, and signed by all parties involved, and that the structure is properly established by the entrepreneur before proceeding.

The agreement must be in writing and must describe the rights, obligations, and responsibilities of all of the company’s owners.

Compliance with employment lawsThe employer is responsible for obtaining a valid work visa for an employee before the individual begins working for the firm.

Entrepreneurs must exercise caution to ensure that they do not infringe on any employment laws or agreements in the nation, since doing so may result in legal consequences.

The faults listed above are the most typical ones that firms make while establishing a business in the United Arab Emirates. We also present a list of small blunders that enterprises should avoid in order to ensure the survival and growth of their businesses in the United Arab Emirates:

  • It is not sufficient to conduct secondary research on the internet in order to establish a corporation in the United Arab Emirates. Before making a decision, it is necessary to confer with a consultant or expert adviser
  • The validity and binding nature of business transactions based on verbal contracts is not recognized
  • Entrepreneurs must have written agreements with all of the facts and be properly signed by all of the parties involved in order to avoid misinterpretation or difficulties.
  • For a corporation to be prepared for worst-case situations, risk-mitigation procedures must be put in place to account for any and all business risks that may arise
  • Entrepreneurs benefit from being able to adapt to the way things are done in their local market. It indicates that the organization is making attempts to integrate in with the business culture of the United Arab Emirates, which will result in increased receptivity. Entrepreneurs must keep up to speed on the rules and regulations governing corporate operations in the United Arab Emirates, since they change frequently and may have an impact on the firm, its employees, its shareholders, or its business.

In order to avoid making any of these mistakes, entrepreneurs must ensure that they are well prepared to take advantage of the numerous possibilities that the UAE has to offer. NR DoshiPartnersprovides business formation services to entrepreneurs in Dubai and the other emirates of the United Arab Emirates, including Abu Dhabi. Mainland Companies, Free Zone Companies, and Offshore Companies are all formed with the assistance of our company creation services. The confidence you get from our assistance in locating an appropriate site, identifying a local sponsor, complying with licensing processes; creating bank accounts; and acquiring work visas will enable you to proceed.

Top 4 mistakes you should avoid when starting a business in Dubai

Dubai is a city that offers a plethora of business prospects to both local and international businessmen. If you’re one of those investors, you’ll have a lot of alternatives to select from when it comes to the creation of your account. Nonetheless, while beginning a business in Dubai, you should avoid making several common blunders. The importance of gathering all of the relevant information cannot be overemphasized. Here, you can find out all you need to know about the process of establishing a business in Dubai.

In addition, you’ll find some helpful hints and suggestions for setting up your business properly on this page.

  1. Mistake number one: failing to locate your organization in an appropriate place. Mistake number two: obtaining the incorrect business license. Mistake number three: failing to prepare the documents required for the registration of your business. Mistake number four: the absence of formal contracts and commitments. What other blunders should you avoid making during the process of setting up your business in Dubai
  2. Learn how to properly establish a business in Dubai. What documents are required for the formation of a new corporation
  3. In Dubai, how many different sorts of business licenses can you find? What can Connectfz do to assist you in establishing a company in Dubai

1. Mistake1: Not choosing a suitable location for your company.

There are several differences between each free zone, which is why you must pick carefully which one you want to visit. Most significantly, you must select a tax-free zone in which you may conduct your company operations without restriction. Despite the fact that there are several Dubai free zones to select from, you may also choose a different jurisdiction. If the free zones do not meet your requirements, you have the option of establishing a mainland or an offshore corporation. However, you will not be able to take advantage of the same benefits as you would in a free zone in these jurisdictions.

Just remember to thoroughly research all of your options before beginning a business in Dubai.

2. Mistake2: Applying for the wrong business license.

Some investors make the incorrect choice in terms of location, while some others make the wrong choice in terms of licensing. Before launching a business in Dubai, it is essential to define the nature of the business and the legal structure that will be used. Numerous permitted activities from a wide variety of businesses and areas are available. Therefore, making a selection could prove to be difficult. Although you have the option of getting the information you want about each license, it is not recommended.

If you make the mistake of choosing the incorrect business license or the incorrect activities, you can seek a modification.

The expense of modifying your activity, on the other hand, will vary depending on the jurisdiction in which you operate. You may discover more about how to apply for a commercial license in Dubai by visiting this page.

3. Mistake3: Not preparing the necessary paperwork for registering your company.

Some investors make the incorrect choice in terms of location, while some others make the wrong choice in terms of licensing. Before beginning a business in Dubai, it is essential to define the nature of the business and the legal structure. Many different businesses and areas are represented by the many permitted activities. A difficult decision may be required as a result. It is still possible to find out all you need to know about a certain licensing authority. Also available is the option of hiring a business setup partner to help you get the most out of the research and selection process.

Although the cost of changing your operations will vary based on the jurisdiction, the cost of changing your operations will be less expensive.

4. Mistake4: Lack of written contracts and agreements.

Another important component of a successful start-up is the documentation of all business agreements and transactions. Most of the time, verbal agreements are not trustworthy or accurate, and as a result, they are not legitimate. In order to start a business in Dubai or anywhere else, it is essential to have solid written agreements in place. Written agreements and contracts, on the other hand, assist investors in avoiding misunderstandings. Furthermore, if the investors work together as friends, trusting one another may not be enough to ensure that the firm is properly developed.

However, it is also critical to be familiar with Dubai’s rules and regulations in order to avoid falling into this trap.

5. What other mistakes should you avoid during the setup process in Dubai?

Despite the fact that they are the most common errors, there are several more that you should avoid. Other typical blunders that investors make while beginning a business in Dubai include, for example, the following:

  • Selecting an inappropriate firm formation structure
  • Failure to register intellectual property
  • Failure to register for VAT and keep books of accounts
  • Failure to apply for a business license. Adding or altering a business activity without prior approval is prohibited. Failure to renew a company license in a timely manner
  • The fact that one does not have a comprehensive knowledge of Dubai’s labor regulations
  • The establishment of a corporate bank account without first investigating the bank’s fees and charges
  • The failure to verify the availability of offices with suitable sizes and preconditions prior to the registration of the firm
  • When making final arrangements, it is important to have specific facts at your disposal.

selecting an ineffective business structure; and Failure to register intellectual property; failure to register for VAT and keep accurate books of accounts; failure to apply for a business license. Making unauthorized changes to or additions to a business activity a failure to renew a company license in a timely manner Having a hazy grasp of the labor rules in Dubai; The establishment of a corporate bank account without first investigating the bank’s fees and charges. Inadequate research of available office space and pre-requisites before forming a corporation; When making final arrangements, it is important to have specific facts at hand.

6. Learn how to start up a company in Dubai correctly.

There is a straightforward procedure that all investors must follow in order to begin operating a business. You’ll learn how to create a business in Dubai free zone and the actions you’ll need to do along the way.

It is critical, though, to complete all of the appropriate papers and narrow down your selections before beginning the process. Following the completion of those stages, you must complete the following:

  • First and first, you must identify the sorts of company activities that you wish to engage in. Always keep in mind that your company license will identify your actions
  • As a result, you must be certain of your activities. In addition, you must choose which free zone is the most fit for the development of your organization. For your convenience, more than 20 free zones are available for you to select from in Dubai. Choose an appropriate name for your firm, which is the second step. You have complete freedom in deciding on your company’s name
  • But, you must adhere to a set of guidelines while creating it. For example, you are not permitted to contain religious or sensitive material. Third, you must complete the necessary paperwork and submit it to the appropriate authorities in your area. More information about the required papers may be found in the sections below. Finally, you must submit an application for the license that will allow you to conduct your business. In addition, you’ll need to create a corporate bank account with a local or international financial institution. Following that, you will be able to begin operating your firm legally and effectively.

It is possible to discover more about the Dubai Outsource City Free Zone and how to finish the company registration procedure by visiting this page.

7. What documents do you need to register a new company?

The amount of paperwork required will differ depending on the sort of business formation you wish to start in Dubai. Foreign entrepreneurs who want to launch a business in Dubai have a variety of possibilities, including free zones and mainland locations, as well as branch offices. Suppose you want to establish a free zone corporation. You will be required to provide the following documents:

  • Your fully completed application for a business license
  • An electronic or paper copy of your company strategy
  • A business card of the individual who will be contacting you
  • Obtaining photocopies of the partners and corporate managers’ passports
  • The notarization and authentication of the Memorandum and Articles of Association (MOA and AOA)
  • It is necessary to submit the original bank reference letters as well as the license of the partner’s current firm, if applicable.

On the other side, you can establish a mainland firm in Dubai if you choose. In such situation, you’ll require the following documents:

  • All shareholders and management must provide passport copies. NOC (No Objection Certificate) from the present sponsor of the UAE resident visa
  • An original or photocopy of the UAE residency visa, if one is required
  • A curriculum vitae for each stockholder
  • Each shareholder must provide a certified proof of address. An official reference letter from a professional or a bank for each shareholder
  • The Memorandum and Articles of Association of the corporation (if the shareholder is a legal entity)
  • And A board resolution approving the formation of a new limited liability company (where the shareholder is a corporate entity)
  • Authorization for the general manager to form a new LLC (if the shareholder is a corporation)

If, on the other hand, you wish to establish a branch office of an existing firm, you must provide the following documents:

  • The initial board resolution requiring the branch office to guarantee its financial commitment
  • Documents must be submitted: an attested copy of the registration certificate, incorporation certificate, and MAA (Memorandum and Articles of Association)
  • A certified copy of their passports and the original Power of Attorney signed by a legal representative
  • The parent company’s bank statements for the previous three months

8. How many types of business licenses can you find in Dubai?

Each area in Dubai provides a varied set of licenses, which is why it is important to avoid selecting the incorrect site. Before beginning a business in Dubai, you should be informed of the many options available to you. For this reason, we’ll examine some of the permits that are now accessible in Dubai free zones. Don’t forget to choose the kind of business activities you wish to engage in before applying for a business license.

  • The ability to engage in commercial, consultative, or industrial activity will be granted to you provided you get a trading license. With this license, you can, for example, import, export, and sell a variety of various sorts of items. Furthermore, if you receive a commercial license, you will be able to apply for a general trade license later on. Investors can trade any type of goods with a General Trading license, which is issued by the SEC. Furthermore, it enables people to trade a variety of diverse things that are not necessarily connected to one another. To put it another way, if you apply for this license, you will be able to expand your business. Additionally, you have the ability to sponsor visas for your employees and dependents without any limits. A service license is required in order to run a business that provides services to other people or businesses. For example, legal firms, accounting or consulting firms, and other comparable organizations can only function under this license
  • For example, Industrial license: in this scenario, firms who hold this license are permitted to engage in industrial operations. For example, an industrial license enables you to import raw materials and create finished items in your own facility. In addition, this license covers a variety of additional operations, such as packing and exporting completed items
  • And Other licenses: If none of the licenses listed above are appropriate for your sort of business, you can experiment with others. For example, you may attempt obtaining a professional license, a freelancer license, or any other licensing you can find. Keep in mind, however, that certain sites may not be able to provide all of the available licenses. Therefore, you must first establish your activity and geographic area before asking for a permit.

9. How can Connectfz help you to start up a business in Dubai?

In addition to avoiding the mistakes of the past, you should seek expert assistance in order to achieve your objectives. Additionally, working alone is something that investors should avoid, particularly if they are lacking in information. Having a business setup partner like Connectfz, on the other hand, may be quite beneficial when launching a business in Dubai. Your company will be up and running in a short period of time with our assistance. Aside from that, you’ll be able to save both time and money throughout the installation and configuration procedure.

  • For example, you may enhance your human resources department by including services such as HR advice, payroll, recruiting, and other functions.
  • We will also give you with professional advice to ensure that you do not make any mistakes during the enrollment process.
  • Would you want to get in touch with Connectfz to learn more about how to start a business in Dubai and to avoid making some of the common mistakes that people make?
  • Alternatively, you can send an email to [email protected], and one of our representatives will get back to you with answers to your questions.

10 Mistakes to Avoid While Setting up a Business in Dubai Mainland

In addition to avoiding the mistakes of the past, you should seek expert guidance in order to attain your objectives. Additionally, working alone is something that investors should avoid, particularly if they are lacking in knowledge. If you are launching a business in Dubai, having a business setup partner such as Connectfz may be really beneficial. Your company will be up and running in a couple of days if you work with us. Aside from that, you’ll be able to save both time and money during the installation and configuration processes.

Using services such as HR advice, payroll, recruiting, and other services, you may improve the overall performance of your human resources department.

As an added bonus, we will give you with professional advice to help you avoid making mistakes during the registration process.

Would you want to get in touch with Connectfz to learn more about how to start a business in Dubai, as well as what pitfalls you should avoid?

You may reach us at +97143316688 if you have any questions. Email your queries to [email protected], and you will be connected to a member of our team who will respond to them as soon as possible.

1. Not Obtaining The Right License

Beginning a business in Dubai requires obtaining a license from the applicable free zone or mainland government. This is the initial step in starting any business in the UAE. When forming a new company in Dubai, the business owners must select the legal structure and license that are most appropriate for their particular business activity and industry. Nonetheless, entrepreneurs must take care to avoid selecting the incorrect license or legal structure for their business. The activity listed on the license should correspond to the activity in which you want to engage in commercial activity.

2. Starting a Business While Legally Employed

The desire to establish a business in Dubai while remaining legally employed and possessing a valid employment visa is common among those with entrepreneurial aspirations in the UAE. This is a breach of the employment contract as well as the law. In such instances, potential entrepreneurs must seek formal permission from their current employer before proceeding with the establishment of a firm in Dubai.

3. Lack of Written AgreementsContracts

All commercial transactions and agreements with partners or other allies should be based on written agreements and contracts to protect both parties’ interests. Entrepreneurs should avoid prioritizing mutual confidence and verbal agreements above other considerations. The investors’ ability to assert their rights in the event of a prospective legal conflict would be aided by carefully crafted and unanimously agreed-upon agreements.

4. Not Registering Intellectual Property

Investing in the development of a strong brand image is essential for any company seeking to grow and expand their operations. Intangible assets such as trademarks are among the most valuable that a corporation can hold, and registering them with the UAE Trademark Office should not be taken lightly. Dubai is a highly competitive business environment, and brand names, logos, and designs linked with a firm are constantly at risk of being copied or imitated. Businesses that have registered their trademarks have the legal authority to take legal action against trademark infringers.

The failure to register intellectual property will result in the creation of a negative image for the company, which will result in a loss of business.

5. Penalty For Not Assessing Worst-case Scenarios

Companies must do a worst-case scenario analysis in order to identify the risks that are inherent in their operations. Entrepreneurs should devote time and money to identifying pain spots, and the worst-case situations should be handled in advance in order to reduce risks as much as possible. In order to prevent business risks, it is possible to implement safety measures in the form of insurance or contracts.

6. Failing to Register for VAT and Maintain Books of Accounts

Investors who establish a company in the United Arab Emirates must make certain that their operations are VAT compliant. If a company’s taxable supply and imports total more than AED 375,000, it is required to register for VAT in the UAE. VAT registration is optional for enterprises who make taxable supplies totaling more than AED 187,500 per year but do not meet the other requirements. The firms are also required to keep their books of accounts for a minimum of five years in accordance with the UAE Commercial Companies Law and the Value Added Tax Law.

Businesses can engage one-stop-shop company setup experts in Dubai who can provide accounting and VAT-related services to ensure that they are in compliance with the applicable laws and rules.

7. Business Activity At Unregistered Location

When engaging in the commercial activity authorized by the trade license, the site is critical to the success of the venture. The Department of Economic Development (DED) forbids doing business activity at an unregistered premises. A penalty of AED 1,000 will be imposed in the event of such a breach.

8. Work Hour Permit Non-compliance

Under normal circumstances, private sector enterprises are permitted to operate for eight hours per day or 48 hours per week. Businesses in Dubai must get special approval from the Department of Economic Development (DED) in order to work longer hours. Working for an additional hour or two without authorisation in Dubai is punishable by a fine of AED 1,000. It should be emphasized, however, that during Ramadan, working hours will be reduced by two hours, and companies must adhere to these restrictions as well.

9. Changing or Adding Activity Without Permission

In order to start a business in Dubai, it is necessary to select the most appropriate commercial activity. The DED permits more than 2,000 activities, and investors must select the activities that are most appropriate for their particular firm. It is possible for businesses to add or update the business activities listed on their trade license by submitting an application for business activity amendment with the Department of Economic Development. In Dubai, however, changing the nature of a commercial operation without authorisation will result in a fine of AED 2,000.

10. Failing to Renew Trade License in Time

When the DED’s license to conduct business expires, the firms are unable to continue their operations. Entrepreneurs must renew their licenses in order to continue operating their businesses and to avoid being subjected to penalties. It is possible to be fined AED 5,000 for operating a business on the basis of an expired license. Failure to renew a trade license on time can result in a penalty of AED 250 each month for failing to do so. Consult the professional services of the best business formation professionals in Dubai to prevent any and all difficulties associated with the renewal of a commercial license.

Hire the Services of Business Setup Consultants in Dubai

Setting up a firm in Dubai mainland is a smart option as the international entrepreneurs need to have a piece of solid information about the local rules and regulations. Many times, the procedure is complicated, and it is very difficult for a foreign entrepreneur to have a complete understanding of all of the requirements that apply to operating a business in Dubai. In such cases, the services of a reputable company formation specialist, such as Jitendra Business Consultants (JBC), are required.

The key strength of JBC is its staff of highly trained business setup consultants that are well-versed in the laws and regulations of the country in which they are working.

JBC can assist investors at each level of the business creation process, from the first registration to the final incorporation.

By utilizing the company formation services of JBC, investors may avoid the time-consuming and difficult procedures associated with starting a firm and instead concentrate on developing solid strategies for future growth.

Top 4 mistakes to avoid when starting a business in Dubai

It should come as no surprise that so many international enterprises want to establish their operations in Dubai, given the city’s thriving business climate and plenty of commercial prospects. However, along with the great advantages come a number of hazards, which might result in foreign investors making costly blunders. While dangers cannot be completely avoided, they may be managed if one learns what to look for and how to do so. Here are the top 5 blunders people make when beginning a business in Dubai, so you can avoid making costly mistakes and boost your chances of success in the process.

1. Choosing The Wrong Company Structure

The first error that many people make is in deciding which type of company structure is the best match for their particular business concept. Choosing a corporate structure entails making trade-offs in terms of advantages. We’ve organized the most significant distinctions between free zones, onshore entities, and offshore entities.

Free zone Entity Onshore Entity Offshore entity
Foreign Ownership 100% Foreign ownership 100%* Foreign ownership 100% Foreign ownership
Repatriation of Profits 100% of repatriations of profits 10%* of profits have to be transferred to statutory reserves 100% of repatriations of profits
Import Duty No import and export duties 5% import duties on most goods (excluding food, beverage, alcohol, and tobacco) No import and export duties
Need of Office Space/Visa Yes (Flexi Desk option is also available) Yes No
Right to do Business Yes Yes No
Right to do Business throughout the UAE No (only within the free zone) Yes No

*Conditions and restrictions apply. The selection is based on what your company is searching for; there are advantages and disadvantages to each of the company structures, but the final decision is based on your firm’s requirements.

2. Not Choosing the Right Free Zone

It is necessary to comply with the terms and conditions Ultimately, the selection is based on what your company requires; there are advantages and disadvantages to each of the many company structures, but the final decision is based on your firm’s requirements.

3. Unclear Understanding of Dubai’s Labour Laws

When recruiting personnel for your firm, it is critical to be aware of the regulations in place to safeguard the interests of all parties engaged in the hiring process. Noncompliance with Dubai’s labor rules may result in increased fees for your company. DMCC Guidelines No.1 of 2020, which strives to safeguard the interests of both companies and employees in the free zone during the COVID-19 Pandemic, were recently amended and highlighted in a blog post issued by the company. The most current revisions to employment regulations, such as standards for remote working and paid and unpaid leave, are discussed in detail in this blog.

4. Lack of Written Agreements

A contract that is correct and legitimate cannot be overstated in the eyes of any firm, regardless of the industry. Especially when it comes to doing business with friends, many entrepreneurs fail to see the need of written agreements and the possibility of a nasty scenario developing. It is critical to have a good business strategy and agreement amongst peers and business partners in order to resolve any misunderstandings or miscommunications that may arise. In addition to providing written documentation that may assist to address any misconceptions, it also helps to avoid any “he said, she said” scenarios that make it extremely difficult to verify any important agreements between partners.

For a more in-depth knowledge of some of the most important aspects of UAE contact law, please visit this page.

Final Thoughts

Starting a business is a difficult undertaking. Let alone establishing a business in a foreign country. Making your business operational is a complicated process, and it may be difficult for foreign business owners to obtain a thorough understanding of the rules and regulations that apply to operating a business in Dubai. At DMCC, we can guide you through the process of starting a business and ensuring that you are on the correct path to success from the beginning. To learn more about how we can assist you, please contact us now!

8 Commonly Made Mistakes When Setting up a Business in Dubai

Are you considering establishing a company in Dubai? Starting a business in the United Arab Emirates is a wise option because it is one of the world’s most promising marketplaces for new enterprises. There are various advantages to establishing a business in the United Arab Emirates. The first and most important thing to note is that registering a free zone corporation in Dubai is a simple process. Business owners, however, continue to make mistakes, despite the fact that they have more flexibility and a simpler registration procedure.

You should avoid the following typical blunders to the greatest extent possible: 1- Inappropriate organizational structure When it comes to starting a firm, the organizational structure is the most important factor to consider.

You might wind up losing a significant amount of money, and making a profit in a young firm is already tough to do.

2- Incorrect selection of the free zone In Dubai and the rest of the United Arab Emirates, there are around 50 separate free zones.

Research thoroughly before registering your free zone firm in Dubai, since if you wind up in the wrong zone, it will limit the amount of business you may conduct.

You may establish a business anywhere in Dubai, however if you start a business in particular regions, your reputation will be lowered significantly.

4- Unable to Comprehend Local Ordinances The laws of the United Arab Emirates differ from those of the majority of other countries in the globe.

Tax rules and company regulations are straightforward and flexible in some areas, but you must nevertheless adhere to them in order to avoid penalties.

5- Long-Term Planning Inadequate long-term planning can lead to a variety of issues for a new firm.

However, the future may bring increasing expenditures as well as unexpected bills.

If you intend to expand your company’s operations into other business sectors in the future, make provisions for this at the time of its inception.

6- Mistakes in the issuance of trade licenses Companies with flaws in their trade or operating permits account for 30% of all businesses.

The region is changing at a rapid pace, with several new legislation being issued or amended on a daily basis.

7- Possessing an Incorrect Driver’s License Failure to keep the license up to date might result in fines of up to AED 100,000 in some cases.

It is critical that licenses be accurate and up to date in order to comply with changing legislation and requirements.

It is beneficial to conduct independent research; nevertheless, it is not recommended that you make a final choice based on your findings.

Stay away from the eight faults listed above, and your firm will be profitable in short order. Adept Consultants is a renowned consultancy organization in Dubai, with offices in several locations. Its legal advisers are well-versed in all legal processes in the United Arab Emirates.

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