he Article was published on Gulf News newspaper on 20 March, 2017, written by Miraziz Makhamatzhanov, CEO of Corplex
- Select the right legal from and license type. Make sure to select the right legal form and license type from the beginning for your start-up in UAE. It is not possible to transfer one type of company into another type (e.g. a Free Zone Company can not be transferred into a Mainland Company).
- You cannot do everything under one license. For instance, if you have a Service License, you can not do or add any trading activity under the same license. Also, you can have limited number of products or services in one license. So, do not expect to provide all types of services if you have a Service License or trade in everything if you have a Commercial License, unless you get a General Trading License. It is important to be precise with your startup’s business activity.
- Be ready for a challenge to open a bank account. Due to stricter compliance requirements, opening a bank account for startups in UAE could be a challenging task. However, if you have a genuine business plan for your startup, then this is not a big challenge.
- Do not expect to get bank loans immediately. You need to rely on your own resources or personal loans in the initial years if your startup in UAE. The banks in UAE require the company to be at least two years old and a minimum turnover of AED 2 to 5 million to be eligible for a loan.
- Calculate carefully before hiring employees. Under UAE labour laws, the employers are obliged to provide a medical insurance and be responsible for employment residency visa costs. This can be heavy burden for small startups. Therefore, select your employees carefully and calculate hiring expenses thoroughly before signing the contract.
