Mistakes you should not make when establishing a company in Dubai

Mistakes you should not make when establishing a company in Dubai. When establishing a company in Dubai, preparation and planning play a crucial role in ensuring the success of the project and avoiding costly mistakes. In this regard, “Itqan” Consulting Company stands out as a reliable partner, helping entrepreneurs overcome potential challenges and avoid common mistakes that may hinder the growth of the new company.

First, it is crucial to determine the appropriate legal entity for the company, whether it is an LLC, a branch of a foreign company, or any other structure. Here comes the experience of “Itqan” in providing the necessary legal advice, to ensure choosing the most appropriate option that is consistent with the nature of the company’s business and its objectives.

Secondly, focus should be on obtaining the necessary licenses and permits from the relevant government authorities in Dubai. This process may seem complicated to some, but “Itqan” ensures full compliance with legal and regulatory requirements, ensuring rapid progress towards establishing the company.

Third, the importance of sound financial planning, including capital structuring, cash flow management, and determining operational costs, should not be overlooked. Here, “Itqan” helps prepare sound financial plans and accurate forecasts, enabling entrepreneurs to make informed decisions and avoid unwanted surprises.

In cooperation with “Itqan” company, entrepreneurs are able to establish a company in Dubai in an organized and efficient manner, while avoiding mistakes that may negatively affect the future of the project. Thus, the process transforms from a daunting step into a paved path towards sustainable business success.

Documents required to establish a company in Dubai

When establishing a company in Dubai , there are a set of basic documents that the founders must submit to the relevant authorities. These documentary requirements ensure obtaining the necessary approvals and facilitate smooth registration and licensing procedures. Here are key points about the most important documents required:

Copy of passport or ID card:

• It is required to provide a copy of the passport or ID card of the founders and partners.
• Images must be clear and legible.

Party clearance certificate:

• A document proving that there are no financial obligations pending on the founders.
• This certificate is issued by the competent government authorities.

Criminal record certificate:

• A document confirming that the founders and partners have no criminal records.
• This certificate is issued by the relevant security authorities.

Proof of address:

• A document proving the address of the office or main headquarters of the company.
• It may be a lease contract, electricity receipt, or other official documents.

Image of the company logo (if available):

• If there is a company logo, a digital image of it must be provided.
• This helps in registering the company’s trademark.

Company incorporation application form:

• An official form filled out with the basic data of the company and its activities.
• This form is submitted to the authority responsible for licensing companies.

By submitting these main documents, the company will be able to successfully complete the incorporation procedures and obtain the necessary approvals to practice its commercial activity in the Emirate of Dubai in accordance with the regulations and regulating laws.

Types of licenses available to establish companies in Dubai

When establishing a company in Dubai , a variety of licensing options are available that meet the needs of different projects and business activities. Here are key points about the types of licenses available:

Commercial license:

• Covering various trading activities, import and export.
• Includes retail and wholesale outlets, stores and offices.

Professional license:

• It is awarded to liberal professions and specialized professional services.
• Professions include consulting, legal, medical, engineering, and others.

Industrial license:

• Granted to industrial facilities and manufacturing workshops.
• It includes manufacturing, assembly, processing and packaging.

Tourist licence:

• Granted to tourist and hotel establishments.
• Includes hotels, resorts, restaurants and entertainment facilities.

Literal license:

• Awarded for craft and handicraft activities.
• Includes handicraft workshops, traditional crafts and artistic crafts.

Electronic license:

• Awarded to electronic and technological business activities.
• Includes websites, applications and cloud services.

Choosing the appropriate license is one of the most important steps in the process of establishing a company, as it determines the nature of the activity and regulatory requirements. Therefore, it is necessary to consult with experts and review the conditions and documents required for each license.

Free zones in Dubai and what are their advantages

Dubai is one of the most prominent economic and commercial centers in the world, which is characterized by the presence of a large number of free zones specialized in various sectors. These areas provide a range of unique investment and operational advantages for companies and entrepreneurs from all over the world. Here is an overview of some of the main free zones in Dubai and their most prominent advantages:

Dubai Multi Commodities Zone (DMCC):

• Specializing in trade and diverse industries such as jewelry, gold, diamonds and basic commodities.
• Provides 100% foreign ownership and comprehensive tax breaks.
• Provides advanced infrastructure and integrated logistics services.

Dubai Internet City (DIC):

• Specializing in the ICT and media sector.
• It offers attractive incentives and tax breaks for emerging and innovative companies.
• Provides advanced digital infrastructure and a supportive environment for innovation.

Dubai International Financial Center (DIFC):

• Specialized in financial and banking services, legal and accounting consultations.
• It has an independent and developed judicial system that ensures stability and security for companies.
• It provides comprehensive tax breaks on profits and financial transactions.

These are some notable examples of free zones in Dubai and the advantages they offer. Choosing the appropriate free zone depends on the nature of the business activity and the company’s goals, so it is important to consult with experts to choose the best.

Procedures for establishing a company in Dubai 

The conditions for establishing a company in Dubai include legal procedures that the company owner must undertake and obtain approvals from the relevant government authorities regarding the conditions for establishing a company in Dubai and obtaining a commercial license in order to start work legally. In the following points, we discuss the necessary procedures required to establish a company in Dubai in accordance with the UAE conditions and laws, as follows:

• The nature of the economic activity. The first procedure according to the conditions for establishing a company in Dubai set by the Department of Economic Development in Dubai is to determine the nature of the economic activity in which the company will operate.
• Legal form: The second procedure according to the conditions for establishing a company in Dubai is to determine the legal form of the company. Its importance is because it determines the laws that will govern the company later.
• Trade name: The third procedure in accordance with the conditions for establishing a company in Dubai and the laws of the Department of Economic Development is to choose a trade name for the company that is appropriate and expresses the nature of the company’s activity.
• Work location: The fourth procedure according to the conditions for establishing a company in Dubai is choosing the company’s work location. The address of the company’s headquarters is recorded in the company’s documents and must comply with the conditions imposed by the Emirate of Dubai.
• Initial approval: Obtaining initial approval from the relevant authorities to approve the trade name, nature of activity, and legal form of the company.
• Additional approvals, because some economic activities require obtaining additional approvals from the authorities regulating them.
• The commercial license, and this is the last procedure according to the conditions for establishing a company in Dubai according to the nature of the company’s activity, after paying the license fees, then registering in the Emirates Chamber of Commerce as a member.

Our company’s role in establishing a company in Dubai

Establishing a company in Dubai in cooperation with Itqan Company requires many important considerations to ensure success and sustainability. The most important mistakes to avoid in this process are:

First, not doing proper market research before starting. It is necessary to understand the demand for products or services in the target market, and carefully analyze the competition and opportunities. Otherwise, the company may find itself in an intensely competitive market or with offerings that do not meet customer needs.

Secondly, not carefully planning the budget and cash flows. Startups need sufficient capital to cover operational costs and investments needed in the early stages. Lack of funding may lead to the project faltering and early closure.

Third, neglecting to adhere to the regulations and legislation in the free zone. For example, failure to obtain the necessary licenses and approvals or non-compliance with tax and customs requirements may lead to legal problems and heavy fines.

Fourth, poor human resources management and poor talent retention. It is not enough to employ competent people only, rather we must work to develop their skills and motivate them to achieve the company’s goals. The loss of qualified employees may negatively impact operational operations.

Fifth, lack of focus on developing products or services and improving customer experience. Care must be taken to provide real added value to customers and continue to innovate to keep pace with their changing needs.

Avoiding these major mistakes, and implementing an integrated business strategy in cooperation with Itqan Company, will help startups in Dubai achieve the desired success and strengthen their position in the market.

Frequently asked questions about establishing a company in Dubai