There are many dos and it is not related to the pursuit of a task or achievement. Understanding the permissible and wrong steps, and taking the necessary precautions, will enable you to carry out your duties in the most satisfactory manner. The same goes for starting a business in Dubai. The visionary and pro-business UAE government has played a key role in making Dubai an international business and technology hub. Various business-friendly measures like tax incentives, free zones, labor supply, infrastructure, availability of raw materials, economic stability make Dubai one of the most popular business destinations.
The countdown to the big event – Dubai World Expo – is happening. The event attracts around 25 million visitors worldwide. This is the best time to start your business in Dubai. Many business companies in Dubai have reported significant business growth ahead of the Dubai World Fair. Here are the basic rules not to follow when starting a business in Dubai. This will help you save valuable time, energy and money. Please read:
Spend Time in Performing Research
You have a clear understanding of the different ways to start a business. Incorporating Mainland Companies, Free Zone Companies and Offshore Companies are the main types of company formation procedures permitted by law in the UAE. Choose to start a business based on your business performance and your target customers. Invest enough time to understand your market and your competitors. There are certain limitations associated with any business formation which may or may not help you. Therefore, the company you choose plays a key role in determining the growth of your business.
Choose Business Activity and Business License
You do not have to choose a business license arbitrarily. There are three main business licenses issued in the United Arab Emirates, namely commercial licenses, industrial licenses and professional licenses. Choose the right license based on your business needs. In contrast to licenses, the formalities involved in issuing licenses are also different. Some licenses require approval from the foreign ministry and other agencies. Documentation and fees also vary depending on the type of license.
Get a Local Sponsor
You may need a local sponsor or service agent to start your business in Dubai. The local sponsor is a citizen of the United Arab Emirates. Starting a business on the mainland requires a UAE citizen as a local sponsor who owns 51% of the total business stake. Limited Liability Company is one of the most preferred companies in Dubai. Limited liability companies have a good reach to unlock Dubai’s business potential.
Starting a business with an LLC also requires the role of a UAE citizen as a local sponsor. Maintain a warm relationship with your local sponsor. The local sponsor acts as an intermediary and handles various administrative formalities with the authorities. A local sponsor will also help you resolve any issues or delays associated with starting a business in Dubai.
Select Mainland for Starting Business in Dubai
Mainland business entities are permitted to do business anywhere in the United Arab Emirates. This is a clear advantage over the Free Zone Company. Free zone companies have the right to operate under certain predetermined jurisdictions. Mainland companies enjoy the benefits of increased exposure and business scope. Another added benefit is that mainland companies are authorized to take on government contracts or projects with large investments. However, the creation of a Free Zone guarantees 100% ownership and tax relief. Understand the difference between the two as clearly as possible.
Verification of Visa Eligibility Requirements
Visa related formalities in Dubai don’t take much time if you have all the required documents and evidence. Work visas are issued depending on the type and duration of business activity. Officials are cautious when issuing visas to foreign investors. To start a local business, your local service agent will take care of the visa application process. Make sure all documents are valid before applying for a visa.
Make a Legal Contract with a Local Sponsor
A word of mouth agreement or deal has no legal effect. A valid legal agreement between your company and a local sponsor is essential for it to be legally valid. Legal documentation ensures the smooth operation of your company and prevents unwanted complications in the future.
Know-how of Banking Charges and Pre-requisites
Don’t open a bank account in Dubai just for that or just because of the reputation of the bank. Banks bill you for various banking transactions and other operations. Get a clear picture beforehand.
Socialize and Be Part of Events
Socializing will be very helpful in branding your business. A business network can take your company to new heights. Share your ideas, thoughts and vision with other investors and entrepreneurs and expand your business goals.
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Have Respect for Local Culture and Belief System
“Give respect and take respect” is a universal fact. Pay attention to and respect local religious and cultural beliefs. Making insensitive statements and derogatory comments about religion and belief systems is a big NO. UAE is a multicultural society with foreign immigrants from different countries living in peace and harmony.