Common Mistakes When Starting a Business in the UAE

Starting a business is undoubtedly a rewarding endeavour but can be equally challenging and fraught with risk. Through this article, we aim to share some of the common mistakes made while setting up a business in the UAE. We hope this article helps you have a hassle-free business setup journey and a successful operation going forward.

Not Choosing the Right Jurisdiction

One of the most vital considerations to be taken into account before starting a business is the jurisdiction. The jurisdiction you ultimately pick must offer you every advantage your company might require. For instance, choosing a free zone like JAFZA if you are involved in import/export activities would benefit you logistically due to its proximity to a seaport. The mainland, on the other hand, might be a better choice if you want no trading limitations in the UAE. Before selecting a jurisdiction, you must carefully consider the nature of your business and its requirements.

Not Selecting Additional Business Activities

Choosing the right business activity is crucial when starting a business in the UAE. Depending on the services/products you will be offering, you may be required to pick more than one business activity. You may take into account your future plans as well if you intend to expand your offerings. It is advisable to carefully consider the choice of your business activities since engaging in a business activity other than the one(s) permitted by your license can attract harsh penalties and/or legal actions.

Not Estimating the Expenses Involved

How much will it cost to set up a business in the UAE? This is a question to which you must find the answer. Though it is tricky to figure this out well in advance, having a rough estimate is essential to avoid any unforeseen expenses. You should carefully analyse all expected investments in your venture such as the license costs, lease rates, etc.

Not Selecting the Right Bank

It is essential to thoroughly compare and contrast various banks before selecting the one that best serves business objectives. Before you choose a bank, it is imperative to evaluate all the necessary parameters for your corporate bank account in the UAE. The minimum balance requirements, fees and charges assessed, policies and guidelines, and payment methods are a few of these criteria.

Not Choosing the Appropriate Legal Structure

The legal structure of your company has numerous implications. A legal structure can separate personal and business liabilities, determines the liability faced by your business during lawsuits, determines the maximum number of shareholders permitted, and many other aspects of your business. Selecting the right legal structure at the beginning is crucial, and can have unintended consequences if not done correctly.

Before starting a business in the UAE, the best course of action would be to hire a business setup consultant. InZone is a leading business setup service provider in the UAE. With years of experience in the UAE’s business setup industry, our advisors will guide you on every aspect of setting up a business and make sure you avoid the common mistakes usually made by entrepreneurs in the UAE.

Let's Talk

Get a response within 4 business hours!

This field is required
This field is required
This field is required
This field is required
We will handle your personal data in compliance with our Privacy Policy

Recent Articles

Conditions for Corporate Tax Grouping: What You Need to Know

As corporate tax takes effect in the UAE, more and more companies are looking to adopt tax optimisation strategies. Out of these, tax grouping emerges as one of the well-known strategies that can be beneficial for businesses. But what exactly is a tax group, and what conditions must be fulfilled to form one? Through this...
Read More ›

How Small Businesses Can Obtain Corporate Tax Relief in the UAE?

Small Business Relief – An Overview As an initiative to ease the corporate tax burden for businesses in the UAE, the government has implemented a Small Business Relief scheme. Naturally, you must be wondering what entities are covered under this provision and what is the eligibility criteria for obtaining tax relief. And that’s exactly what...
Read More ›

5 Ways to Deal with Business Debt

Debt in business can be like a double-edged sword, while it can help finance your growth and expand your business, on the downside, it can quickly spiral out of control and can potentially threaten your business’s survival if you aren’t careful. Therefore, if you’re finding yourself struggling with business debt, it is necessary to take...
Read More ›

Understanding the UAE’s Corporate Tax Penalties in 2024

The UAE’s corporate tax was announced in 2022, and since then a series of regulations were put in effect for businesses to comply with. Along with the regulations, the penalties for non-compliance were also announced. As the corporate tax is fairly new, it can be quite possible for businesses to miss out on certain obligations,...
Read More ›

Company Liquidation in the UAE: All You Need to Know

Company liquidation in the UAE refers to the systematic process undertaken to close down a business. Once liquidated, the company can no longer conduct business operations and employ people. There can be several reasons behind the liquidation of a business ranging from decreased revenue, high levels of debt, legal disputes, fraud, loss due to natural...
Read More ›

Starting a Dropshipping Business in the UAE: A Complete Guide

Looking to start a business in the UAE? But wondering what type would be the easiest and can capitalize on the best of the best opportunities in the UAE’s thriving business world? Then, a dropshipping business in the UAE sounds like just the perfect venture to start your business journey! Not only does the UAE...
Read More ›

A Complete Guide to B2B Business Opportunities in Dubai

B2B stands for business-to-business, and in this type of business, companies sell products or services to other businesses rather than to individual consumers. An example of a B2B business is a company that manufactures office furniture, and instead of selling directly to consumers, it sells products to other businesses like office supply stores or corporate...
Read More ›

3 Effective Tips For Entrepreneurs To Avoid Burnout

Being an entrepreneur is without a doubt an exhilarating role, but it’s also equally demanding. The desire to succeed can at times make you put more on your plate than you can handle which eventually leads to burnout and exhaustion. This isn’t only damaging to your physical health and business, but also your mental well-being....
Read More ›

Securing Assets in the UAE Through Offshore Company Formation

The United Arab Emirates without a doubt has become an attractive destination for investors who are seeking to secure their assets through offshore company formation. If you’re one of them too, or whether you’re simply seeking to protect your assets, this guide will provide an in-depth understanding of the requirements, benefits, and procedures for setting...
Read More ›
We Accept

We accept the following credit cards. Our website is secured with SSL 256 Bit Encryption.

We accept credit cards
Why Choose InZone
  • We provide 30 day money back satisfaction guarantee to all our clients.
  • We provide 100% confidentiality to all our clients.
  • We provide a dedicated account manager.
  • We provide bank account opening assistance through our well-established banking relationships.
Refer & ReceiveRefer and Earn
Contact Us