11 Dos and Don’ts of Doing a Business in Dubai

Dubai aims to be the business hub of Western Asia and is also a major global transport hub for passengers and cargo. Oil revenue helped accelerate the development of the city, which was already a major mercantile hub. 

Dubai is also a centre for regional and international trade since the early 20th century. And its economy relies on revenues from trade, tourism, aviation, real estate, and financial services. 

Versatility is the major attraction of this place and it is also an interesting fact that there are almost all nationalities of people who live and work here. 

Dubai is like a dreamland for many. But, when it comes to doing business at Dubai, there are certain things that you need to look into and bear in mind. 


The 11 Dos and Don’ts of Doing a Business in Dubai are: 


  1. Do appropriate research on various Company Formations in UAE

The basic and foremost thing to do, right away, when you start the thought of doing a business in Dubai is to thoroughly study and know about the various Company Formations in the UAE. And then, select the one that is most appropriate for the type of business and nature of customers that you wish to target.

Mainland company formation, Freezone Company formation and Offshore Company formation are the major types of company formation procedures authorized by law in the UAE. Have a clear understanding about these types.

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.


  1. Select the business license that suits your business

Selection of the apt license that suits your business is the next important thing to do.  There are three major business licenses issued in UAE and they are Commercial License, Industrial License and Professional License. 

Bear in mind that the formalities and the documentation fees vary for the different kinds of licences. Certain licenses require approval from external Ministries and other agencies. 

Hence, you ought to have a thorough knowledge and check on the licences before choosing the one that is suitable for your business.


  1. You must get a local sponsor

The local sponsor is a UAE national. A Dubai national being a local of the place, will definitely help you get acquainted with the various facts associated with a business start-up in Dubai. This will help you avoid the problems encountered while launching a profitable enterprise in the UAE.

Your local sponsor, who is a UAE national must be taken as a 51% partner of the total share of the company. A local company provides the freedom to locate a business anywhere in the city. 

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.

A cordial and healthy relation with your sponsor is the key to getting things done smoothly while doing business in Dubai. The local sponsor being a national, will know places and formalities better and can act as an intermediary. 


  1. Do consider mainland business over Freezone business

Choose Mainland business because it has many advantages when compared to the other two. Mainland business entities can do business anywhere in the UAE and thus has a greater exposure and reach. 

Also, when it comes to government contracts, mainland business is legally authorized to take it up.

Freezone business entities will have 100% ownership and tax benefit. Keep in mind that the only way for a business start-up in UAE to start without taking a UAE national acting as your partner is to locate your business in one of the Free Zones.

Understand clearly the advantages and disadvantages of each type and choose what is best for you.


  1. Do not delay in confirming your visa eligibility requirements

For a business start-up in the UAE, a visa permitting you and employees to live in UAE is essential to run your business.

Visas are allowed for almost all businesses. However, their number varies according to a variety of criteria such as the size of the office, nature of the business, the category of the employee, or the investor.

Visa related formalities in Dubai are not at all time consuming, once you have all the required documents and proofs in hand. visa. 


  1. Do maintain a legal contract with a local sponsor and do not make verbal agreements

Always make sure to have legal documentation and agreements. A Word-of-mouth agreement has no legal validity. Only a valid legal agreement between your business concern and local sponsor is essential to establish the legal validity. 

Hence, do have each and every document legalised. This will help in the smooth running of the business and help avoid unwanted complications in the future.


  1. Do understand the banking prerequisites and charges

Before you open a bank account, have a clear-cut knowledge of the various prerequisites, charges and related transactions. Do not just open a bank account for the sake of it or simply on the basis of the bank’s reputation. 


  1. Take part in events and socialize

Branding comes from socialising and exposure. 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.

Taking part in various business-related events will also help you gain insights and reformed ideas.


  1. Respect the local culture and belief system

Dubai being the business hub and various nationalities dwelling in the city, there are various cultures and belief system that needs to go in harmony.

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.


  1. You must entrust the company’s registration task to a recognised business consultant

Your company’s registration process can be done with much ease if you get the help of an experienced business consultant, who will definitely be able to help you out with the various sanctions and approvals. 


  1. Communicate with business owners of similar domain

Business owners of similar domain and jurisdiction will be of great help to you because they must have gone through the same business formation procedures like yours. Hence, having a cordial relation can help you with tasks related to company formation, operation, office space etc.


The 2019 Ease of Doing Business Index prepared by World Bank places the UAE in the 11th* position globally, which emphasizes the fact that Dubai is still the best place for doing business. Perhaps, this is why the commercial capital of the UAE sees a swarm of investors every year.

But, do keep in mind these above-mentioned points before you commence a business in Dubai. 

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