Top 5 mistakes to avoid when starting a business in Dubai
Dubai is a global hub for business and offers a lot of opportunities for both foreign investors and locals. Be it Dubai’s strategic location or no taxation policy, people from all over the world are interested in starting a business in Dubai. Immigrants from numerous countries make up nearly 90% of Dubai’s population. Therefore, you can start your own business in Dubai and cater to a diversified audience belonging to various cultures and communities.
The best part is that business formation in the UAE is governed by several jurisdictions that take care of different legal verticals. However, it can be a bit overwhelming for an expat to manage everything all by himself. Therefore, you should connect with the business consultants at Shuraa and we’ll ensure that you don’t commit any mistakes while establishing your business in the UAE by handling everything for you.
Mistakes to avoid when setting up a business in the UAE
There’s no denying that committing mistakes and facing hurdles is a part of any business journey. However, with appropriate guidance and understanding of various legal frameworks, you can enjoy risk-free company incorporation in the UAE. Furthermore, listed below are five common mistakes that all investors should avoid:
Don’t select your company’s structure without professional advice
Deciding a company’s structure is one of the first decisions you make while starting a business in Dubai. Never make hasty decisions based on hearsay. Major decisions like company jurisdiction, structure, etc., call for professional guidance. A single mistake can cost you a lot of time and monetary losses too. Therefore, recognize your perfect fit via thorough research. Get started with your business activities when you’re well-versed with Dubai’s legal frameworks.
Don’t collaborate with a local partner without a written agreement
A mainland company formation requires you to partner with a UAE resident. As a local sponsor with 51% of ownership while starting a business in Dubai. Now, finding a local sponsor is easy. However, finding a credible local sponsor takes time and effort. It’s imperative to collaborate with a reliable local sponsor to avoid any mid-process hiccups. Therefore, ensure that you don’t rely on any oral agreement with the UAE national. A legitimate written agreement shall be drawn up and signed by all parties to have a smooth business partnership.
Never choose a trade license impulsively
Applying for a trade license when you open a business in Dubai depends on the nature and activities of your business. Always select a business license that inclines with your business model and doesn’t burden you with other legal restrictions. For instance, a professional trade license is for people offering professional services. To open a business in Dubai, you must have a valid trading license that encompasses all your operational activities. Furthermore, don’t forget to renew your license at least a month prior to its expiration date as this mistake comes with several repercussions.
Avoid opening a bank account without determining the interest rates
Opening up a corporate Bank account is vital for all businesses to manage their monetary transactions. You need to follow a set of procedures to open a non-resident bank account in the UAE. To start your own business in Dubai, you must be aware of all the banking requirements, interest rates, and the bank’s reputation.
Banks typically have different criteria for charging interests and you should make an educated decision about finalizing the bank after consulting with Shuraa’s legal legal advisors.
Don’t handle the company’s registration on your own
With everything readily available on the internet, you might feel like handling the company incorporation process yourself. However, the registration process involves a lot of documentation alongside the submission of application forms translated into Arabic. There’s no denying that the UAE government has made the process effortless and straightforward for both UAE nationals and expats, yet professional services are required at many stages of business registration.
The local business advisors are aware of the latest laws and offer their guidance after understanding your requirements. Moreover, many business activities need special approvals from various governing bodies and a local advisor can help you obtain the same.
Therefore, to start your own business in Dubai, it’s better to hire a reputed advisory firm like Shuraa and escape the complications. Our consultants will guide you through the entire process so that you can focus on other growth-related business activities.
Why should you launch your business in Dubai?
Setting up your company in the UAE is the right decision, thanks to the business-friendly laws and lucrative business opportunities. Here are a few such advantages:
- Starting a business in Dubai comes with several monetary benefits. Expats can enjoy complete repatriation of capital gains and various tax exemptions. You don’t need to pay any corporate tax or customs duty in the UAE and the credit for the same goes to the supportive government.
- Foreign investors can enjoy 100% business ownership in any of the free trading zones and also in the Dubai mainland. You need a local service agent (LSA) who’ll help you obtain the license in a free zone without making any legal interference in your business activities. Moreover, the latest amendment in Companies’ Law has introduced complete foriegn ownership in the mainland region. If your company meets the required criteria.
- Entrepreneurs and new-age investors want to make the most of their investment. Be it infrastructure, resource availability, or anything else – Dubai is your one-stop solution to all your business requirements. Moreover, the transport facilities in the UAE empower trading firms to proceed with their import-export activities to various parts of the world.
Connect with Shuraa
Now that you have become familiar with the most common mistakes that can happen while starting a business in Dubai, it’s time to get started with your business activities. All you need to do is get in touch with Shuraa Business Setup. We’ll become a part of your business journey in the UAE. Our business experts provide end-to-end assistance by taking care of documentation, licensing, banking, and everything else related to company formation in Dubai and the UAE. Connect with Shuraa today to know more!
Click here to book a free consultation with us or call us at +971 44081900. You can also reach out to us on WhatsApp by dropping a message on +971 50 777 5554. For email assistance, mail your query at firstname.lastname@example.org.