7 mistakes to avoid while setting up business in UAE.

Are you dreaming of doing business in UAE cost-effectively? New

entrepreneurs usually miss the bus, not gathering the various market dynamics

and competitiveness timely manner to get the competitive edge of the market

trends. It is essential to safeguard your business from failure by avoiding a few

crucial mistakes and overcoming them to scale up the business shorter to

minimise the cost of capital.

Right Jurisdiction

It is imperative to select the proper Jurisdiction, Whether to set up business in

mainland areas or free zone areas. The United Arab Emirates demarcated free

zones into two types: designated free zones and non-designated free zones.

Designated Free zones get benefits of customs and duty drawback, freehold

land for industrial activities, value added tax when compared to non-

designated free zones. Some nature business models necessitate setup in

mainland areas rather than free zone areas, and some businesses are better

set up in free zone areas. The free zones facilitate a much larger environment

under one roof, such as networking with member companies, regulatory

approvals, visa requirements etc.

Right Business Activity in Right Place

The UAE is a vibrant fertile ground for start-ups and entrepreneurs to establish

businesses to achieve goals and grow. UAE businesses must comply with the

regulatory requirements of various registries, whether financial or non-

financial business activities. Different types of licenses are available, such as

trading, commercial, industrial, and professional categories. It is advisable to

approach experienced business setup consultants for the right direction to

follow correctly.

Transportation and Logistics

Every business requires proper connectivity in case of transportation for the

movement of goods to ports and human resources for managing the business

efficiently and cost-effectively. Different business models demand relevant and

appropriate business locations to cater to industry demands, competitive

nature and geographical business hubs.

Compliance and regulatory framework

You must follow and adopt time-bound compliance requirements once you set

up a business in UAE without facing fines and penalties. The UAE does not levy

tax on individuals but enacted corporate tax law in 2022 to impose income tax

on companies effective from 1 st June 2023, apart from value-added tax, which

started in 2018. The UAE government strictly adopted the anti-money

laundering and combating financial terrorism (AML/CFT) framework to check

misusing corporates by corrupt persons. Other applicable laws must be

adhered to manage and grow business efficiently and correctly. The UAE free

zones have their own set of rules and regulations to follow.

Lack of paperwork to facilitate the bank account opening process.

Corporate accounting openings require communicating with banks with a

transparent business model and approved business license activity and

managing the business process in line with compliance and regulatory

requirements to open bank accounts in UAE.

Lack of professional support and advice

Initially, entrepreneurs and start-ups require professional guidance to start a

business, understanding compliance requirements, market dynamics, industry

practices, competitiveness, expert advice, and availability of various resources

needed for the chosen company.

For support, guidance and free consultancy, please get in touch with

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