Every year Dubai attracts more and more entrepreneurs and investors. The prospect of opening a business here seems extremely profitable, but you should not be in a hurry. It is important to think through each step and approach the registration of the company competently, without making basic mistakes.
Of course, the advice of those who have already opened a business in the UAE can be useful, but it is important to realize that each situation is different. An economic zone that suits one area of activity may not suit another. This principle also applies to all other steps: choosing a license, bank, office space, etc. Emirates’ legislation is periodically updated, new requirements or procedures appear, which your acquaintance/partner may not know about.
You should not trust all the information you can find on the internet. First, it may no longer be current due to changes in the law. Second, it may contain errors or have certain conditions. For example, some free economic zones may have promotions for renting office space, which is written on their website. But you should find out more about the conditions of this promotion separately, as they may not suit you. In this regard, all information is important to double-check either with competent professionals or with the relevant government agencies.
3. Choosing a business location without a long-term perspective.
Often, entrepreneurs may be attracted by favorable prices for certain jurisdictions or promotions. However, choosing a business location affects its opportunities. It is important to understand what goals you plan to achieve in the long run. You may soon need to expand your office or warehouse space, or there may be a need to work in the local market. Therefore, it is worth thinking in advance where to open a company: on the main land or in the free zone. If in the freezone, it is also necessary to take into account its specifics and some restrictions.
4. Inattentive calculation of the budget for opening and running a company.
At the stage of preparation for the registration of the company, it is important to calculate all the upcoming costs. Without knowing the specifics of doing business in the UAE and all possible fees, you can go into a big disadvantage. Among the items that are often forgotten to take into account are the costs of renting an office (even if you do not actually need it, in some jurisdictions it is mandatory), the bank balance (irreducible balance), the annual renewal of registration and the cost of employees (visas, insurance, etc.).
5. Incorrect choice of activities.
It is important to select the most appropriate type of license for the planned activity in advance together with a specialist. Successful passing of inspections by regulated bodies, smooth work with the servicing bank and customs clearance of goods, if necessary, depends on this choice.
6. Incorrect selection of the office.
When choosing the type of office and its location, it is necessary to rely on the type of activity and the bank’s requirements for opening an account. You should not be in a hurry to pay for the lease of a virtual office for a year, as it will be impossible to return the funds you have paid. The company’s specialists will help you figure out which office solution will be suitable for your type of business.
7. Non-compliance with business requirements.
Many entrepreneurs overlook the need to maintain various types of reports. After opening a company, it’s important to keep books, file tax returns, and audit reports for some types of businesses. Each document has its own filing requirements and deadlines. You should find out more about these in advance from specialists or the relevant government agencies.
8. Counting on international standards of legislation in the UAE.
Of course, the Emirates are striving to implement international standards, but there are still many local rules. For example, you need to be prepared for a long procedure of opening an account, as banks are particularly careful in checking foreign citizens.
9. Involvement of illegal labor.
Failure to comply with the procedure for hiring employees and bypassing official registration is a gross violation, which entails fines and sanctions during the inspection of the migration service.
10. Ignorance of the obligations that arise after the registration of the company.
There is a whole set of requirements depending on the type of company that must be complied with. Among them we can highlight:
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