Dos and Don’ts connected with Business Formation in Dubai
There are certain dos and don’ts connected with pursuing any task or accomplishment. If you understand the dos and don’ts and take the necessary precautions, you may accomplish your task in the most satisfying manner. The same applies to business formation in Dubai. The visionary, business-friendly UAE government has a major role in transforming Dubai into an international business and technology hub. Various pro-business measures like tax incentives, Freezone jurisdictions, the supply of manpower, infrastructure, availability of raw materials, economic steadiness make Dubai one of the most preferred business destinations.
The countdown of the mega event – Dubai World Expo - is about to begin in October 2019. The event will be held in October 2020, a 6-month event that is estimated to bring in around 25 million visitors across the globe. This is the most appropriate time to set up a business in Dubai . Many business concerns in Dubai have already reported significant business-growth ahead of the Dubai World Expo. Here are the major Dos and Don’ts connected with setting up a business in Dubai. This will surely help you save precious time, energy and money. Kindly read on:
1.Invest time in doing research, you won’t regret
Have a clear understanding of the various types of company formation. Mainland company formation, Freezone Company formation and Offshore Company formation are the major types of company formation procedures authorized by law in the UAE. Select the company formation based on your business accomplishment and target customers. Invest ample time in understanding your market and competitors. There are certain restrictions connected with each company formation that may or may not help you. Therefore, the business entity that you select has a major role in determining your business growth.
2.Select the business license that suits your business
You are not supposed to select the business license randomly. There are three major business licenses issued in UAE and they are Commercial License, Industrial License and Professional License. Select the appropriate license based on your business endeavour. As the licenses differ, the formalities connected with the license issuance also varies. Certain licenses require approval from external Ministries and other agencies. The documentation and the fee involved also varies with the type of license.
3.Get a local sponsor
You might require a local sponsor or a service agent in order to start your business in Dubai. The local sponsor is a UAE national. Mainland business formation requires a UAE national as your local sponsor who owns 51% of the total share of the company.
A Limited Liability Company is one of the most preferred business entities that operate in Dubai. A limited liability company has a good scope of exploiting the business potentials of Dubai. LLC company formation also requires the role of a UAE national as a local sponsor.
Maintain a cordial relationship with your local sponsor. The local sponsor functions as an intermediary who manages various official formalities with the authorities. The local sponsor also helps you sort out issues or delays connected with company formation in Dubai.
4.If you want to do business anywhere in UAE - select mainland business
Mainland business entities are authorized to do business anywhere in the UAE. This is a clear advantage over Freezone companies. Freezone companies are allowed to operate under certain predefined jurisdictions. Mainland company enjoys the advantage of enhanced business exposure and reach. Another added advantage is that mainland companies are authorized to take up government contracts or projects that have huge investments. However, Freezone company formation guarantees 100% ownership and tax benefits. Understand the differences between both as clear as you can.
5.Verify your visa eligibility requirements
Visa related formalities in Dubai are not at all time consuming, once you have all the required documents and proofs in hand. A work visa is issued based on the type and duration of the business endeavour. The government officials are considerate when it comes to the issuance of a foreign investor visa. For local business set up, your local service agent handles the visa application process. Ensure the validity of all the documents prior to applying for a visa.
6.Maintain a legal contract with a local sponsor, avoid verbal agreements
Word-of-mouth agreements or deals have no legal validity. A valid legal agreement between your business concern and local sponsor is essential to establish the legal validity. Legal documentation ensures the smooth functioning of your business and prevents unwanted complications in the future.
7.Understand banking prerequisites and charges
Don’t open a bank account in Dubai just for the sake of it or simply on the basis of the bank’s reputation. Banks charge you for various banking related transactions and other operations. Have a clear understanding of these beforehand.
8.Take part in events and socialize
Socializing will help a lot in branding your business. Business networking can take your business to new heights. Share your ideas, thoughts and vision with other investors and entrepreneurs and expand your business goals.
9.Be respectful to the local culture and belief system
“Give respect and take respect” is a universal fact. Give due consideration and respect to the local religious and cultural beliefs. Making insensitive statements and derogatory remarks about religion and belief system is a big NO. UAE is a multicultural society with foreign expats from diverse countries living in peace and harmony.
10.Entrust the company registration task to a seasoned business consultant
After going through the instructions mentioned on various websites, one might think that the registration tasks are so simple and direct. Well, the instructions are straight-forward, but things can get complicated on many occasions. Certain business activities require special sanctions and approvals. Here the issue can be resolved only by an experienced business consultant. Therefore, it is advisable to entrust your registration task to the best business consultant in Dubai and UAE.
Also Read: Legal Requirements to Be Fulfilled for Starting a Business In UAE
11.Communicate with business owners of similar domain
Establish contact with business owners of similar domain and jurisdiction. They might have gone through the same business formation procedures like yours. And they can help you with tasks related to company formation, operation, office space etc.
The above-mentioned 11 Dos and Don’ts are applicable to all businesses in Dubai, irrespective of their size and capital investment. These instructions shall help you for sure. For further clarifications and support regarding Company formation in Dubai, please do contact Kiltons Business Setup Services.