You might have decided to expand your business into Dubai or pondering over the idea of starting a new company in the emirate. It goes without saying that you have made the right decision as the process of business setup in Dubai enables you to leverage benefits such as world-class infrastructure, ease of access, streamlined and comprehendible visa process, less paperwork, ease of doing business etc.
Even though it is exciting to start your own business in Dubai, you might be carried away and overlook a few things that may seem irrelevant at the time. An important step could be mistaken for an insignificant detail, leading to serious consequences. Business setup consultants in Dubai can advise you on such critical matters. Here is a list of things you should not do while setting up a company in Dubai:
Failing to do Market Research
Before applying for a business license in Dubai, foreign investors and entrepreneurs need to extensively research the local market. Many entrepreneurs taste startup failure by failing to conduct market research. You may have an innovative idea but it is bound to fail in an adverse market. Moreover, market research will enable you to identify the potential demand for your products or services, competition, and potential barriers to entry.
Being Ignorant about Legal Framework
If you are planning to register your company in Dubai, you must learn about the local laws, regulations and other compliance requirements. The landscape of business setup in Dubai has undergone significant changes in recent times with the introduction of a series of regulations and laws.
Value Added Tax (VAT, Anti-Money Laundering (AML) laws, Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO) laws and the UAE corporate tax are some of the most significant regulations that you need to comply with. Failing to understand the requirements associated with each of these regulations will land you in legal trouble, incurring hefty penalties. Business setup advisers in Dubai can advise you on the legal requirements.
Rushing the Process
You need to remember that there is no shortcut to success in business. The time to set up a business in Dubai is comparatively less than in other countries. Normally you can get a business license in Dubai within 4-6 business days. However, it may vary depending upon the licensing authority (free zone V/s mainland), activity (special activity may require external approvals), and the accuracy of information provided in the application/documents. Inadequate or inaccurate documents may delay the process of company formation in Dubai further. You should understand this and should not try to unnecessarily rush the process.
Not Seeking Professional Advice
Company incorporation in Dubai is not a ‘Do It Yourself (DIY)’ process. Foreign investors may find it tough to understand the local laws, regulations and the region’s cultural landscape. Seeking advice from experts will lessen your burden and speed up the process of company formation in Dubai. You can consult with company setup consultants in Dubai for this.
Not Having a Solid Business Plan
The secret to business success in Dubai can be found in your business plan. With a weak business plan, your business is bound to bite the dust. A business plan must clearly outline the goals, strategies, and operations of the business.
Not Having Sufficient Capital
You cannot set up a company in Dubai with no money. You need to have adequate funds before starting any business in Dubai. Inadequate capital can mute the growth and development of your business.
Choosing the Wrong Business Structure
Choosing a legal structure is the most critical step in the process of company formation in Dubai. Depending on the number of shareholders, you may choose an appropriate legal structure such as a Limited Liability Company (LLC), Sole Proprietorship, civil company, a branch of an existing company etc. Choosing the wrong legal structure will lead you to consequences like personal liability issues, legal issues, limited investment opportunities, lack of a beneficial tax treatment etc. Business setup advisers can help you choose an appropriate legal structure for your proposed company.
Not Obtaining the Necessary Licenses
It is mandatory for businesses to obtain a trade license in Dubai before starting a business. Carrying out a business activity without a license is a punishable offence in Dubai. You can either obtain a mainland license from Dubai Economy and Tourism (DET) or any free zone authority to practice a business activity in Dubai. Business setup consultants can advise you about the process and cost of a trade license in Dubai.
Overlooking Visa and Residency Requirements
If you plan to reside in Dubai or have employees working there, you need to consider visa and residency requirements. Neglecting these requirements can result in legal consequences and difficulties in conducting business operations. The UAE offers a wide range of residency options such as investor visas, golden visas, green visas, retirement visas, remote visas etc.
Neglecting Cultural Sensibilities
The UAE has its unique values, culture and customs. Entrepreneurs and investors need to respect the country’s cultural values and create strong relationships with customers, suppliers, and other stakeholders. It will also create a good image for your company in front of the government.
Business Setup Consultants in Dubai can Help you
Overlooking the most important aspects of business setup in Dubai can lead you to incur hefty penalties or other serious consequences. Ignoring the points stated in this blog will keep you from achieving business success in Dubai. To avoid any misstep, consult with the best business setup consultants in Dubai such as Jitendra Business Consultants (JBC).
JBC is one of the leading providers of business setup services in Dubai with years of experience in assisting entrepreneurs in setting up their businesses. We have a team of highly qualified consultants who can assist you in making decisions such as choosing between the free zone & mainland, selecting business activities, advising on the legal structure and licensing costs etc. We also provide PRO services for residence visas, investors visas, Golden Visa and Green Visa. Consult with us today to take your business idea to the next level.
