Common Mistakes People Make When Setting Up a Business in the UAE

One of the common mistakes we make when considering the IFZA business setup is choosing the wrong type of business activity. While there are more than 2,000 types of business activities in the UAE, only a few of them are legal and require a corresponding license. Unfortunately, we often choose the wrong type of license, which will cost us around $ 1,000 and make it difficult to begin our new business. Fortunately, you can take a few steps to avoid this mistake and start your new venture successfully.

Choosing the wrong jurisdiction:

A common mistake is choosing the wrong jurisdiction. Choosing the wrong free economic zone can cause problems with the implementation of your business. There are more than 50 independent jurisdictions in the UAE, each with specific features for different businesses. Choosing the wrong jurisdiction can slow down or prevent your company from going ahead. In addition, the cost of registration can be anywhere from 11,000 to 30,000 US dollars.

Not knowing the laws and regulations of the free zone you choose:

Before incorporating a business in a free zone, there are many things to consider before incorporating a business in a free zone. One of the most important things to remember is that you must follow the laws and regulations of the free zone you choose. There are many pitfalls to avoid, and making a mistake can cause many problems for your company.

Not knowing what type of business you want to start:

The next step in setting up a business in a free zone is choosing a license. Once you’ve chosen your business activity, you’ll need to choose a license. There are several types of licenses available, and you should select the one that suits your goals and vision. Once you’ve decided on the type of business you want to start, you’ll need to choose the proper form to start your new venture.

Choosing the wrong trade license:

Another mistake we make is choosing the wrong trade license. This document is required to prove that you have the capital necessary to operate your business. The requirements for a trade license vary between free zones and the type of business you’re looking to establish. Depending on the type of business you’re planning to set up, you’ll need to invest between US$10,000 and US$300,000 in capital to ensure your company’s stability.