Golden rules for an investor to follow prior establishing a company in the UAE

abdelaziz Managing Partner

Golden rules for an investor to follow prior establishing a company in the UAE

From a Legal perspective if any investor wants to start a business in UAE, the investor shall follow the below golden rules:

  1. Most of the investors while setting up for a business in UAE their main concern is the income and expenses without being familiar with the culture of the  Country or City such as customs, traditions and the applicable Laws and Regulations  of UAE. Therefore, the first rule, it is mandatory for the investor to know the culture of the region in which he wishes to invest and start a business.
  2. The investor must identify the type of the business and determine the suitable type of the company depending on the activity of the business, such as: Limited liability company or sole company, mainland or offshore company, In the UAE we different categories of companies which the investor will select depending on the type of the company, activity, location and etc.  Second rule is that the investor must be sure what is the advantages and disadvantages for each type of the companies as well as what are the consequences of the same.
  3. The investor shall be fully aware of the Legal Structure, applicable Laws and Regulations of the city when establishing the company. Of course, I mean that, the investor shall be familiar with the relevant Labor Law, Company law, Rental law and the nature of procedures in the courts, arbitration center and all relevant authorities. Generally, most of the foreigner investors, are signing Commercial Agreements and the Dispute Resolution method is Arbitration and the applicable Law is a Foreign Law, accordingly, if any dispute arises between the parties it shall be resolved through the Arbitration Center. Many investors presume that it is not important to be familiar with the UAE Law since the applicable Law for resolving any dispute is a foreign Law and by virtue of my legal experience this is one of the biggest mistakes the investors do. Therefore, the third rule is, that the investor must consult a experienced Local lawyer who is fully aware of the applicable Laws and Regulations as well as the court procedures for a comprehensive Legal advice to avoid any dispute which may occur in future.

For time being, it is very easy to get the necessary information’s to learn on how can you to set up your business in the UAE and most investors see that  consulting a law firm is a luxury and not important.

In fact, there is essential relationship between the investor and the lawyer, and this relationship should start from the beginning not after the dispute arises.

I am fully aware that, all the investors are keen to manage their expenses but they must to put a budget from the business capital to protect themselves and their assets, by referring to the legal advice from the experienced and well-known Law firms in UAE.

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