Legal Requirements to Be Fulfilled for Starting a Business in UAE
1. Establish a Company the Right Way
There are different types of company structures possible, such as a Sole Establishment (this is the same as a Sole Proprietorship) for single-owner companies. A Limited Liability Company is when all the shareholders in the company hold an equal amount of shares. If you want to have minority shareholders and majority shareholders, you should look at setting up a Private Joint Stock Company. A company that is fully owned by another company overseas is known as a Branch Office or a Representative Office.
Here is where it would be good idea to enlist the professional assistance of someone who has experience with company setup in Dubai – not all company structures can carry out all types of commercial activities. A Limited Liability Company, for instance, cannot engage in banking / finance / investment. Only Limited Liability Company structures are permitted in free zones, so if you were planning to open your company in a free zone, you might find that there are business activities that you cannot engage in.
2. Apply for the Right Kind of Business License
There are about 2,100 commercial activities permitted in Dubai. It is always a good idea to approach someone experienced in matters of business startup in Dubai with your business plan so that he/she can advise you correctly. You can theoretically apply for up to ten business activities on your Business License, but adding each activity costs more. So a business setup consultant can make use of his/her experience to tell you which are the exact business activities you should be applying for in your License.
A good business setup consultant would also be able to help you when you expand your business. For example, if you open a general trading establishment in Dubai, but decide to sell your goods online later, a business setup expert can help you add e-commerce activity to your Business License. Similarly, if you choose to scale down your operations later, a business setup consultant can help you remove business activities from your Business License and save you money on renewal fees.
3. Choose the Right Commercial Space
It is important to rent commercial space for your operations before you apply for company registration and a suitable Business License. Among the legal requirements to start business in Dubai is a suitable commercial space. This commercial space must meet Government-mandated criteria, such as how there must be 100 square feet of office space for every employee. If you are planning to hire 12 employees, you need an office with an area of 1,200 square feet, failing which you will be refused work visas for your staff.
4. Make Sure Your Commercial Agreements are Properly Worded
Sometimes, it may be necessary to have supplier agreements in place before you start your business in Dubai. Good business consultants in Dubai would have access to a legal team that can make sure that everything is watertight. They would see to it that the contract mentions when the supplies have to arrive at the buyer’s location and in what quantity, in addition to when the payments would be made and the penalties for non-delivery or non-payment. Removing ambiguity is in the best interests of all concerned.
5. Ensure that Your Work Agreements are in tune with Labour Law
A good business setup consultant can help you draft work agreements that meet UAE Labour Law norms.