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5 Dos and Don’ts for Startups in Dubai

Dubai is one of the biggest business hubs in the world that offers lucrative business opportunities to entrepreneurs and overseas investors. The availability of strong business infrastructure, free zones, manpower, supplies, and a low tax regime makes Dubai a preferred destination for start-ups. However, setting up a company in a foreign land can be quite challenging. You need to know all the formalities involved in company registration, licensing, recruitment of staff, and other requirements. So, here’s a list of important dos and don’ts for you to consider before setting up a business in Dubai.

Dos for Starting a Business in Dubai

1.Pre-Evaluate All Company Formation Structures:
While setting up a company in Dubai, evaluate all types of company formation structures or legal structures, namely Mainland, Free Zone, and Offshore. Each structure has its own set of merits, geographical restrictions, ownership limitations, and visa constraints that may or may not fit your business. So, make sure to carefully evaluate all options and choose the structure that is ideal for your business.

2.Get Local Sponsorship:
The most common and beneficial type of company formation in Dubai is a locally-registered Limited Liability Company (LLC) setup. However, you require a local sponsor to form a Dubai LLC company. The local sponsor should be a UAE national who will have 51% ownership in your company and will charge a yearly fee. Nonetheless, the local sponsor provides the power of attorney and gives you 100% control of the company. So, make sure you get a reliable local sponsor.

3.Choose A Business License Carefully:
There are three different types of licenses available in Dubai – Professional, Commercial, and Industrial. Each type requires a different set of supporting documents and licensing fees, which may or may not support your business model. Hence, make sure to choose a license that permits all the activities you have planned for your business.

4.Set up a Professional Company in Free Zone:
When you start a professional company in one of the Free Zones, you get 3 advantages – speedy startup, 100% ownership of your company, and duty-free customs boundary, but no benefits of the Mainland. So, based on the nature of your business activity, you should consider setting up a professional company in a Free Zone.

5.Get an Investor Visa:
To set up a business in Dubai, you will require an investor visa or a business visa to permit you to live in the UAE. Though getting a business visa is not complex, you must complete the paperwork and legal documentation carefully to facilitate smooth business operations.

Don’ts for Starting a Business in Dubai

1.Don’t Handle Business Registration By Yourself:
Though the Dubai Government has made the business setup process quick and easy, there are several complex areas to handle as a foreign investor. Therefore, avoid the hassle and let a professional business startup consultant like Creative Zone handle the entire registration and licensing process.

2.Don’t Set up Business without Having Enough Funds:
Financing is generally not available to start-ups in Dubai. So, if you’re not in a position to pay for the startup costs, then you should wait before taking any step to start a business in Dubai.

3.Don’t Rely on Published Information:
Do not finalize your business plans until you have confirmed the validity of the published information with relevant authorities or a business set up consultant like Creative Zone. Check for any changes in rules for Free Zones, any special permissions needed, or any waivers available on request.

4.Don’t Open A Bank Account Uninformed:
Don’t open a bank account without confirming the requirements and the bank charges applicable.

5.Don’t Sign Up for Sponsorship without A Legal Contract:
Do not sign-up with a local sponsor until you draw a written legal agreement and get it attested in the local court. Do not rely on verbal commitments.

If you are planning to start a business in Dubai, then seek professional help from a business startup consultant like Creative Zone, the largest business setup and support company in Dubai. Our expert advisors will guide you properly and take care of all the business setup needs. Call 800 LICENSE (5423673) or fill out the form on our website to schedule a free consultation with one of our Business Setup Advisors today!

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