Do’s and Don’ts of Starting a Business in Dubai in 2019

by commitbizadmin 10, Sep 2019

Do’s and Don’ts of Starting a Business in Dubai in 2019

The United Arab Emirates is one of the biggest and diversified economies in the world. Being one of the members of the World Trade Organization (WTO), UAE plays an important role in global trade and commerce. Understandably, many businessman and investors look forward to the prospects of business setup in Dubai. New company formation has always been encouraged in Dubai. The authorities provide an excellent business infrastructure with the exemption of taxes, availability of free zones, workforce, materials, supplies, intellectual property and many more which makes this city an appealing destination of the business-minded dreamer. Due to its stable economy, it is of no wonder that Dubai has attracted millions of foreign investors from around the globe.

In this article, we have summarized a few points which you must consider before doing business in Dubai so that you are aware of the hurdles and can avoid potential hazards beforehand.

Do’s of Business Setup in Dubai

1.Study all the Options

Before you dive down, study all the available options of starting a company. In-depth research or taking help from a reliable consultant are few of the possibilities. There are three jurisdictions in the country, free zone, offshore and the mainland. Studying their market, advantages, and disadvantages is a must. Some formation type will suit you more than others like there are certain geographical restrictions, ownership restrictions, visa limitations etc. in each kind. You must study all the options and plan accordingly.

2.Confirm the Requirement of Visa Eligibility

To start any business in Dubai, if you are non-national, you need a valid visa. Not just for you, but your employees as well. Government is the prime authority who will provide you with the visas. However, the number of visas varies according to the size of the office and nature of your business. For a mainland business, you will need a local sponsor who will apply for the visa. And in the free zone, you have to go to the relevant Free Zone Authority to get the visa.

3.To Get Full Ownership of the Business, Choose a Free Zone

Do keep in mind that the only way to completely own your business in the UAE is to choose a relevant free zone. Free zones give you an advantage of full ownership to a foreigner, unlike Mainland where a local sponsor will own 51% of shares in the business. And it is another task to look for a local sponsor. The free zone also provides you with many more advantages like a speedy startup and duty-free customers’ boundary.

Don’ts of Business Setup in Dubai

1.Don’t Proceed for Partnership without a Legal Contract with the Local Sponsor

If you want to set up a business in Dubai mainland, the first important thing to do is find a local sponsor for your business who will own the majority of shares in your company. But, remember to have a legal contract with the local sponsor and do not solely rely on verbal commitment or mutual understanding.

2.Don’t Choose a License Category Randomly

In the UAE, when you start the process of registering a business, one of the important steps is to get a valid license. Issuance of a license depends upon the business activity that you are into. Therefore, don’t just choose a license category randomly; it has to match with your business model. Few licenses issued in the UAE are;

  • General Trading License
  • Commercial License
  • Service License
  • Consultancy Licensee
  • E-Commerce License etc

3.Don’t Rely Completely on Published Information

Before you finalize the plans for your startup, it is reasonable to confirm the efficacy of the published information. Rules change in free zones and also in the Department of Economic Development (DED) for registering your business.  Do not go ahead until you have settled your opinions through an advisor, or by actually contacting the relevant power. You may find that some papers may be needed or that some nationalities need special permissions or that some requirements may be dismissed if you inquire or negotiate.

Whatever stage you are on during your Dubai journey, taking these points into factor will help smooth the transition – although engaging with consultants throughout the process is of course essential. At the end of the day, Dubai is a city with an unmatched "You can do it" attitude. So what are you waiting for?

If you need help from a consultant who is well-versed with all the legal formalities in Dubai, UAE then we at Commitbiz can help you with it. Our advisors have years of experience in this field and can assist you with your business setup services. Contact us today to know more.