Owning a Business in Dubai could be dream but when fulfilling such dreams it is very important to understand the do’s and don’ts while Setting up a Business. The current market trend to Setup Business in Dubai is encouraging but certain major things to be considered before venturing into your own decision of Setting Up a Business in Dubai.
Major things to be considered are as follows:
OWNERSHIP: As discussed in the previous blogs there are different jurisdictions and different forms of companies that could be formed in UAE. Out of which the major point to be considered is the 51% ownership to the UAE national and 49% to the expat owner, or 100% ownership to the expat partner. It is obvious that anyone who is dreaming to have a Business in Dubai wants to own 100% stake of the company but the legal frameworks of UAE are such that a mainland commercial license with no say states 51% and 49% differentiation and 100% ownership for professional licenses with service agent. A way out for this is that a Free zone company can be owned 100% by the expat owner with all the legal frameworks.However, the choice of the jurisdiction and the type of the license needs to be decided depending on the nature of the business and the target market.
Reliable Local Partner / Agent: All the Mainland Business in UAE requires a UAE National partner/agent. It is very important to identify a reliable partner as a 51% of the company’s stake is mentioned on his name. There is nothing to worry on the legal obligations for the same as this is protected by the virtue of protection side agreement. The partnership and the agency arrangement is arranged by a specified fees paid to the UAE National as an Annual Remuneration.
Selection of Right Business Location: Selection of a Business Location is a most important aspect in a business growth. The points to consider for location are the accessibility to the customers and the ease of commuting. The nature of business also plays a vital role to choose the location.
Requirements for Visa: Any start up business should consider the fact of how many visa’s are required to run the business as the packages be it with the free zone or the office requirement with the mainland depends on the total number of Visa’s required.
Legal structure and Capital Requirements: Among the various legal structures available, it is important to understand what goes right with you business activity and the number of shareholders involved in the company. The major legal structures in Dubai are: Limited liability company (LLC), Sole proprietorship, Civil company and Branch or a representative office when it comes to mainland where are free zone establishment (FZE), free zone company (FZCO), Branch are the types for a free zone business. All the companies have certain minimum capitals to be maintained. Certain just called a paper capital where physical form need not be proved where as certain places physical from need to be proved in the form of bank guarantee.
Company Name and the Activity: Last but not the least, it is important to understand the right activity, as per the activity categories available with the departments be it a DED or a Free zone licensing authority. Once the activity is chosen, the name plays a huge role. Understand if the name is available to choose also the trade activity should always reflect the Company name.
Finally to sum up, Business Setup in Dubai could be a cakewalk if done in the right way and under the legal frame work.
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SEEKNEO Joined: September 19th, 2019 Articles Posted: 1
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