If you’re about to start your own business in the Emirate, here’s some things to watch out for…
24 April 2017| Last updated on 23 May 2017
Setting up a business is a truly significant decision and should not be taken lightly. The UAE is an attractive spot for expats and many of them are entrepreneurs who wish to have their own start-up. With several free zones, excellent infrastructure, no income taxes and low import duties, it is no wonder many people choose this Emirate to follow their dreams.
However, starting a business here has its own obstacles and mistakes can sometimes be very costly. So here are some things we suggest you keep in mind as you go through the process.
1. Registering your company in a Free Zone without seeing the available office sizes and preconditions
As you research Free Zones, you'll generally find that there is a wide range of office choices on offer. However, the availability of those offices is constantly changing. As a start-up, you’ll likely want to opt for the cheapest option.
You might go to register your company and then find out that there are only certain office sizes still available and that could completely throw off your budget.
This is a situation you don’t want to be in because it might be too late to change your Free Zone or some of those available offices might only allow one visa for the investor and none for the employees.
Therefore, avoid proceeding until everything about the office is confirmed.
2. Choosing a licence category without confirming that it’s the right one for your business
There are hundreds of licences available to choose from. You might see one that fits with your business model but there might be a similar one that has more advantages.
So before you settle on one, make sure it’s a category that won’t limit your business and allow for more products or services in the future in case of growth.
3. Making final plans based on published information only
It’s important not to get ahead of yourself while you’re setting up your new business. It is strongly advised to confirm the validity of the information you have found before making firm plans.
Free Zones have rules that are regularly changing and the same goes for the local Department of Economic Development for business registration.
Therefore, before confirming anything, check with a business setup consultant or contact the relevant authority.
Some of the things that could come up include needing additional documents, needing special permission for certain nationalities or even that some requirements can get waived with a simple conversation.
4. Opening a bank account for the business without checking the bank charges
Different banks have different charges and they vary depending on the type of account. For a start-up, the bank fees can be a significant sum of money.
Don’t blindly open the account without confirming all the charges and requirements beforehand.
5. Agreeing to a sponsorship arrangement without having a written and notarised legal contract
Sometimes, opening a business here requires support. If you have a local sponsor, they might charge you separately for certain services.
There needs to be complete agreement on what each of you can expect from the other and you need to have it all in writing. Verbal understandings aren’t binding here and won’t hold up in court should there be a disagreement.