Dubai is an attractive location for entrepreneurs looking to set up their businesses. However, the process of setting up a business in Dubai mainland can be complex.
To ensure a smooth and successful business setup in mainland, it is important to avoid some common mistakes that many first-time entrepreneurs make. In this article, we will discuss some of these mistakes and provide tips on how to avoid them.
Selecting the wrong business activity:
Dubai’s Department of Economic Development (DED) provides a list of approved business activities. Choosing an activity that does not match the business operations may lead to complications in licensing and approvals. Reviewing the available options and selecting the most suitable category is necessary before proceeding with the setup.
Choosing an unsuitable legal structure:
The legal structure determines ownership regulations, liability, and operational procedures. Some businesses select a structure without considering its long-term impact. For example, an incorrect choice between a Sole Establishment and a Limited Liability Company (LLC) may affect ownership rights and expansion opportunities. Checking all available options before making a decision helps in avoiding future adjustments.
Not checking trade name availability:
A unique trade name must be registered before applying for a trade licence. Some businesses select names without verifying availability, leading to rejection by the authorities. Ensuring the name follows DED guidelines and is not already in use prevents unnecessary delays in the approval process.
Incomplete documentation:
The business setup process involves submitting various documents, such as passport copies, tenancy contracts, and approvals from government authorities. Missing or incorrect documents may result in application rejections or delays. Preparing all required paperwork in advance ensures a smooth registration process.
Selecting the wrong business location:
A physical office or workspace is required for businesses in Dubai Mainland. Some businesses choose locations without checking if they meet DED regulations. The office space must be registered with the Ejari system and match the business activity stated in the licence. Reviewing location requirements before signing a lease agreement avoids complications later.
Ignoring visa and labour requirements:
Businesses must apply for visas and labour cards for employees. Delays or errors in visa processing may lead to legal issues and penalties. Registering with the Ministry of Human Resources and Emiratisation (MOHRE) and ensuring compliance with labour laws prevents disruptions in hiring and business operations.
