Do: Pick A Location That Optimizes Costs, Convenience, And Suitability
If you are considering a new business setup in Dubai, you need to determine the most suitable location for the business. Even if you manage to set up a lucrative enterprise in the city, it is of no use to you if your clients cannot reach you. Ideally, your company should be located somewhere that is most convenient to your business and most profitable for your business. If you are looking to set up your company in a free zone, your choice of free zone should be based on the nature of your business since different free zones allow or prohibit certain business activities, proximity of the free zone to airports and seaports, trade requirements, suitability for your product, the possibility to import goods, and the predominant focus of that free zone. Next up, a tenancy contract must be concluded. If you are a small-scale enterprise, be sure that your establishment premise includes basic amenities like the space, storage, and telecommunication requirements. Other services available in the commercial property can vary greatly.
Don’t: Forget To Get The Right License
Doing business in Dubai requires you to have evidence-based information and business regulations of that country. Before you dive into the process of new company formation in Dubai, you need to mull the types of business licenses the country offers, the number of visas that will be assigned to your setup, and the different business activities that you can choose from. In general, any kind of business activity you decide to pursue will fall into any of the three categories- industrial, commercial, or professional. Since different authorities deal with different kinds of licenses, different licenses may require separate sets of supporting documentation, and costs of different licenses may vary, it is important to choose the most appropriate business license for you and go ahead with operations.
Do: Seek A Local Sponsor
The most beneficial type of new business setup in Dubai is a locally registered Limited Liability Company (LLC), but for that, you need a local sponsor in Dubai. According to the UAE law, local sponsor should be a UAE national who is entitled to 51% ownership in your company. However, your local sponsor will generally give you the power of attorney, allowing you to take the full reigns of your company. In return, they charge an annual fee in payment for their services. A prudent advice is to develop a rapport with your sponsor so they will be willing to help you straighten out any kinks you may have with the authorities.
Don’t: Handle Business Registration By Yourself
You may think you can do it all on your own but launching a new business setup in Dubai isn’t a walk in the park. Even though the Dubai government is always taking initiatives to make the setup process easier and quicker, there are tons of technicalities involved. As a foreign investor, you will find yourself unceremoniously chucked into complexities you won’t be able to tackle. This is why you should collaborate with a business startup consultant in Dubai to help you navigate the entire registration and licensing process and avoid the roadblocks. Hiring a consultant gives you more peace and mind and energy to focus on your partnerships, business venture, and chalking out a long-term business plan.
Do: Carefully Go Through All Company Formation Structures
Before you start a new business setup in Dubai, you would do well to pre-evaluate all types of legal structures or company formation structures, such as Offshore, Free zone, and Mainland, to decide which best suits your business. Each structure has its own pros and cons, constraints, ownership limitations, geographical restrictions, restrictions on business activities. And so on, that may affect your business. This is why it is important to meticulous consider all options and choose the structure that best caters to your business.
Don’t: Rely On Published Information
Before going through with your plans for your business startup, it makes sense to check the validity of the published information you have relied on. Free Zones are subject to changes in laws and regulations, and the local Department of Economic Development for business registration may also update their laws from time to time. You need to keep an eye open for any waivers available on request, any changes in rules for Free Zones, or any special permissions needed. This is why it is prudent to involve a business set up consultant, since they stay abreast of any changes and updates, and will keep your in the loop. You may think you have finalized the process only to discover that some nationalities need special permissions, or some additional papers may be needed before you proceed.
Do: Set Up In A Free Zone
There are numerous perks of setting up a professional company in one of the 30 Free Zones that UAE offers, such as duty-free customs boundary, speedy startup, and 100% ownership of your company, but at the same time, takes away the merits of starting a business in the Mainland. So, depending on the nature of your business activity, keep in mind that the only way to start a company in Dubai without seeking help from a local sponsor is to locate your business in one of the Free Zones. However, this is not best suited for businesses that must be located in the center of the city, such as retail stores and restaurants.
Don’t: Open A Bank Account Without All The Information
Banks levy varying charges. If you are starting a new business setup in Dubai, these can amount to a substantial sum which may greatly impact your business in its infancy. Always confirm the requirements and charges before choosing a bank to open your company account.