10 Costly Mistakes to Avoid in Company Setup in Dubai Mainland
Dubai is renowned for its strategically important location and policies that encourage investors to come forth to set up a business forefront. But there are many other sides to these eye-catching opportunities. The business setting process is very peculiar and may often lead to financial losses, complications, and even bankruptcy. Here is a quick guide for you to navigate through the mistakes that you should potentially avoid in order to set up a flourishing business in an economically strong country like Dubai. Opting for a wrong business idea Choosing the wrong legal arrangement Not Collaborating with dependable local sponsors Incomplete knowledge of licensing requirements Miscalculating the costs of a business setup Unable to acquire an office space Disregarding visa and employees ordinance Not comprehending tax and VAT acquiescence Absence of a clear business master plan Managing the company setup process without an escort 1. Opting for a wrong business idea: Company setup in Dubai Mainland requires choosing the right business idea. It is of utmost importance for brand setup in a country like Dubai. There is a legal set of allowed activities that a business can choose from, which is provided by the DET (the Dubai Department of Economy and Tourism). Choosing an activity that isn’t in the vicinity of those mentioned in the list can delay the legal procedures for your business, such as licensing delays. Make sure you opt for the business activity that resonates the most with your business idea and can be flexible with your future expansion plans. 2. Choosing the wrong legal arrangement: Being an economically powerful country, Dubai presents you with various legal structures under which you ought to register your business. A few examples of such legal structures would be sole establishment, limited liability company (LLC), etc. As a responsible business owner, you’re supposed to understand these structures and do proper research before categorizing your company into one of the legal structures. Statistically, entrepreneurs generally go for LLC, but it is recommended to consult a business strategy expert who will guide through all the available choices. 3. Not Collaborating with dependable local sponsors: According to the rules and regulations of Dubai, certain types of business require collaboration with a local sponsor who would hold 51% equity of the total shares of the company. It might be a delicate matter for company setup in Dubai Mainland because choosing the wrong local business might lead to multiple ownership issues, control issues, and issues related to differences in business strategies. 4. Incomplete knowledge of licensing requirements: Each company setup in Dubai mainland requires licensing – which can be commercial, professional, or industrial. Entrepreneurs wrongly presume that all business activities would be covered under a general license. This can certainly lead to delays, fines, or in worst cases, a complete shutdown. It is therefore recommended to always authenticate the license with the DET. 5. Miscalculating the costs of a business setup: It’s a common trend for business owners to misjudge the expenses anticipated for setting up a business in a strategically strong country like Dubai. The cost of company setup in Dubai mainland often exceeds the financial planning due to the high cost of office rents, licensing fees, etc. A detailed financial planning can save us from the stress later. 6. Unable to acquire an office space: An office space is a quintessential part of company setup in Dubai mainland. A few key points to keep in mind before you rush into leasing a property would be selecting a suitable location, paying attention to legal procedures accompanying the lease, and bargaining the price of the property. Also, make sure that your office regulations are at par with those made by the government. 7. Disregarding visa and employees ordinance: Before hiring anyone for your business, you should first and foremost be well-educated on labor laws and employee regulations of Dubai. Not working in accordance with the strict guidelines laid down by the government of Dubai may lead to the shutdown of your startup. 8. Not comprehending tax and VAT acquiescence: Although Dubai has a tax-free environment, an entrepreneur should still be aware of the VAT (value-added tax) and other financial layouts. Not registering one’s business under VAT may lead to heavy compensations and fines. One might consider hiring a business strategist to save themselves from the added stress. 9. Absence of a clear business master plan: One of the most prevalent factors leading to the failure of startups and businesses in Dubai includes the lack of proper planning and blueprint for the business. Without it, one might not even survive a day in an extremely competitive corporate environment like that of Dubai. A long-term strategy as well as short-term goals, budgeting and proper financial planning is a prerequisite. 10. Managing the company setup process without an escort: Burdening yourself with all the work required in a company setup in Dubai mainland without professional help can lead to unforeseen delays and burnout. It’s a tiresome process and has multiple levels to it, which would necessarily require a team of experts. Working with a team of experts like AB Capital Services can demarcate the burden and make the whole set-up process hassle-free and smooth. The above-mentioned points can help you ease the process of company setup in Dubai mainland and reduce the chances of certain failures. By understanding the underlying processes and prospects which come with entrepreneurship, one can reduce the chances of shutdown by multifold and ensure long-term success. Also Read: Top 10 Benefits of Dubai Free Zone Business Setup for Entrepreneurs Business Setup in Sharjah: Everything You Need to Know in 2025 Is starting a Business in Dubai a Good Idea in 2025? All Types of Visa in Dubai and Their Benefits in 2025 Open a Company in UAE: Your 2025 Guide to Business Success
10 Costly Mistakes to Avoid in Company Setup in Dubai Mainland Read More »