As we have already discussed in our previous post on “How to Set up a Business in Dubai – Part I”, now you already know what makes Dubai the preferred hot spot for trade investments. Though the UAE government is quite liberal and open to foreign business/ trade formation norms and policies, there are a few things that you need to take into consideration before you start a business in Dubai and we shall discuss it here:
1. Localizing Partnership
In the Part I, we have already cited the importance of a local partner when you set up a business in Dubai. Your business motive is to drive profitability and for profit acquisition you need a locally registered LLC business. This is possible only if you enter into a partnership with an UAE national, also referred to as the local sponsor. Your partner will exercise 51% share of your overall business enterprise. Dubai government provides local organizations with the facility to choose any locations across the city for their business establishment. As a startup, you are at an advantage of choosing the location that is affordable and helps to save your money.
The sponsor needs to be paid a fixed remuneration on a yearly basis that is negotiable. Develop an understanding relationship with your sponsor, as he is the only one who can help you to sort out any problems or help you with the business dissolution process in the long run.
2. Free Zone ensures 100% business ownership
If the idea of partnering with a local sponsor does not go well with you and if you wish to exercise 100% ownership of your business, then you can set up your business in the Dubai Free Zone. The advantages of choosing Free Zone includes:
100 % business ownership
Duty free customs boundary
The start-up activities are processed with enhanced speed and ease.
But, Free Zone is not a better option if your business needs to be closely connected with your clients and customers as it is located towards the outskirts of the city which is not easily accessible.
3. Location Preferences
Finding a suitable location to set up your business in Dubai is another important task that needs to be dealt with carefully. Choose a location that is profitable and convenient for your business and ensure that it is at an accessible distance where your clients & customers can easily reach you. If your business enterprise includes something like shops or restaurants then you need to be inside the city from where people can easily reach you or else in situations where your trade requirements do not require direct customer involvement for profit generation, then you can choose the Dubai free zone to start your business.
While signing up the tenancy contract agreement, ensure that the basic amenities such as telecommunications, space and the storage inside the organization is well satisfied while the other amenities and facilities varies from place to place.
3. Visa Eligibility
The most important requirement to start up a business in Dubai is to own a visa that permits you and your employees to reside and run your business in the UAE. Visas are approved for almost all kinds of businesses. The number of visas that are approved depends on the following criteria and may vary from business to businesses:
Size of the organization
Category of the investor
If you are planning to start up a local company, then your sponsor needs to get your visas, at least for the first time. The process of business visa application and approval in Dubai is quite easy as the nation welcomes foreign trade investments whole-heartedly.
Apart from your passport and the other legal formalities, you need to produce a letter from your sponsor highlighting his or her as well as your personal information, reason for the visa application and similar factors before your request is finally processed. Once you are done with your visa processing formalities, you can go ahead and apply for processing the visa application request of your employees, if your sponsor is willing to authorize the sponsorship.
4. Seek Legal Advice
You are new to the place and to its laws and as you have plans to start a business in Dubai it is not a small game that you are going to get involved with. So, you need to seek out expert advice from legal consultants in Dubai to help you with the company formation process. These consultants can provide you with advice on efficiently handling the potential costs, business operation strategies and much more. They can also help you with the business and trademark registration processes related to your business.
Banks hardly lend loans to start up enterprises in Dubai, so the entire initial funding should be contributed from your side.
Legal Maxims offers legal consultation to foreign trade investors and helps them with the business formation and the other related procedures. We are aware of the bureaucracy policies and norms that are applicable for business setups in Dubai and we will help you to formulate your business start up process accordingly. Are you planning to set up a business in Dubai? Then, contact us today and we will help you.