Common Mistakes to avoid when registering a Company in Dubai

  • March 04, 2023
  • Dushyant Sharma
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The UAE Authority allows interested Entrepreneurs to establish both onshore and offshore businesses in Dubai. However, major foreign business owners prefer free zones areas, as it offers zero corporation and personal tax and a complete company ownership. For registering a Company in Dubai, the UAE Authority allows complete repatriation of capital and profits for the Foreign Nationals with no restrictions on currency exchanges and tax concessions on imports & exports.

With a vibrant multicultural environment. Dubai offers a diverse and highly skilled labour market to make foreigner to feel at home. For starting a business with online Company Registration in Dubai, the applicant must keep in mind the following don’t to save itself my registration and license revocation actions.

Factors responsible for Refusal of Company Registration in Dubai

The Foreign Nationals must keep in mind the following factors while applying for Free Zone or Mainland Company Formation procedure in Dubai:

Unclear Expectations from the proposed Startup

Every business idea starts with a plan but you must be willing to take a risk for it. The clarity must be there for each of the following interrogations:

  • What is in it for you?
  • What specific purpose are you seeking from the Business?
  • What future expectations you hold from your Business?

The applicant must also employ a strategy if you wish to decide to sell your business. A confused and a clarity-lacking move cause the startup to fail. For such purposes, you can consult any of our experts about the Company Registration procedure in Dubai.

Choosing a misfit Framework or Model for the Business

The UAE caters to many startups in a wide range of Industries, giving an impression that any business idea is likely to succeed in Dubai. But such is not the case as there is a lot of efforts involved in the incorporation procedure. The applicant must perform background research keeping in mind the business climate of the Gulf City. For such clarity, you can seek the required assistance from incorporation experts at Registrationwala.

The selection of the business model must be based after the consideration of the following factors:

  • Market Attractiveness
  • Proposition of Business Valuation
  • Revenue Distribution among Departments
  • Projected Sales Performance of the Business
  • Competitive Advantage in the market
  • Key Collectible Resources
  • Cost of setting up the Business Structure
  • Pitfalls & Risks involved 

The Business Framework here pertains to the management structure adopted by the Business to achieve its goals. Whereas the Architecture includes the documents, diagrams, and path required in structuring the business. It also articulates the functional structure of the business in terms of its services.

Dilemma of Market Misconception between Home Land and UAE

The Business applicant must have a thorough awareness of the market it intends to enter along with the following details:

  • Economic Structure
  • Social Customs
  • Business Practices

There are huge relational differences in the following aspects of Indian and UAE markets, such as:

  • Taxation System
  • Legal Procedures
  • Market Behaviour
  • Law Jurisdiction
  • General Atmosphere 

To work in a different market, you must be open to new developments and difficulties. Both the similarities and dissimilarities between the markets must be obvious to you, allowing an effective completion of Company Registration procedures in Dubai, along with targeting the appropriate market as well as employing the best profit maximization practices.

Choosing an incoherent commercial activity for your Businesses

You must consider on the market viability in UAE in choosing an appropriate business activity for online Company Registration in Dubai, as it is crucial to do a thorough analysis of your venture’s potential as well as its profitability. The commonly adopted business structures in Dubai are Sole proprietorship, Partnerships, and Stakeholder Organizations. A Proprietor is an owner who starts his business alone, whereas a Partnership is a business conducted by two or more persons, and Stakeholder refers to a distinct legal entity as per the UAE Legislature.

The reach to correct customers for the product or service must be effective. You must be well-researched over your target customer base for Mainland Company Formation in Dubai.

Misplaced Business Centres or Plants for operating Body Corporate

Depending upon the business type, the applicant must choose a business zone for Company setup in Dubai. To do business outside of mainland Dubai, a free zone is more appropriate option than mainland for penetrating the local market. Every Free Zone jurisdiction has its own set of rules and regulations for governing business establishment. The UAE market is divided into the following economic zone:

  • Mainland
  • Free Zones
  • Offshore Economic Zones

Choosing an incorrect Corporate Structure as per your business activity

  • Commercial Companies, such as the following:
    • Sole Proprietorship
    • Partnership
    • Limited Liability Company
    • Branch of a Foreign Company
    • Public Joint Stock Company
    • Private Shareholding Company
  • Civil Companies, such as the following:
    • Service Companies
    • Speculative Venture Partnership
    • Mudaraba Companies
  • Free Zone Entities, such as the following:
    • Free Zone Establishments
    • Free Zone Company
    • Branch of a Free Zone Foreign Company

 

For more on Company Registration procedure in Dubai, connect with the Incorporation Experts at Registrationwala. 

Also Read: Discover the Step-by-Step Process of Registering a Company in Dubai


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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