Legal Challenges for Startups in  UAE

Legal Challenges for Startups in  UAE

Establishing a company in the United Arab  Emirates is one of the most popular things for investors and businessmen on a global scale to start their businesses in the United Arab Emirates, especially the Emirate of Dubai, as this emirate alone includes more than 280,000 companies registered in the Departments of Economic Development.

 When we talk about establishing a company in the United Arab Emirates, we realize that entrepreneurs face many questions regarding compliance with the law during this process. Such as choosing the appropriate region, property rights, how to deal with partners… and many other concerns. Start-up companies are considered risky projects that aim to transform an initial idea for a product into a profitable and rapidly growing business model. Naturally, this is done through different stages during which different goals are achieved. During the initial stages, the company moves from building an initial product to expanding into new markets on a global scale. During the later stages.

 There are a number of advantages of opening a company in UAE and having an Emirati commercial register in this developed country, which has now become one of the most competitive countries in the commercial market among the countries of the world. The presence of supportive legislation for businessmen and investors opens horizons of ideas for establishing different and diverse companies in the Emirates. This affects the growth of the national economy and the commercial aspect of the state. Enhancing stability during the practice of commercial activity by establishing a company in the Emirates, while providing some supporting rights for that. The founder obtaining an exemption from import and export costs at a rate of 100%. Being able to practice any commercial activity he desires. Founder and own the presidency in its own market, given that the country has extensive international relations with an innovative system that supports economic flexibility.

 So,what are the Legal Challenges for Startups in  UAE ?

There is no doubt that the steps for establishing a company in the Emirates differ based on the type of company that the investor agrees to establish. On the other hand, it must be taken into account that establishment policies differ from one state to another within the country. However, the procedures for establishing a company in Dubai will be mentioned, which are the fixed steps that must be implemented according to different types of companies and in application of UAE law in establishing companies. Which are:

  • Determining the nature of the commercial activity.

The UAE provides more than 2000 activities and 6 types of licenses, the most famous of which are commercial licenses. It is worth noting that one license can include more than one economic activity.

  • Choosing the legal form of the company.

If you want to open a company in Dubai, you must determine the legal form of your company, as there are 13 types of companies in Dubai. From this step, the legal form is what determines the regulations and laws that your company will be subject to later by the UAE.

  • Reserving and registering the company’s trade name.

The trade name is the name that distinguishes your company from other companies, and it is considered one of the most important services for establishing companies in the Emirates or abroad. Also, registering it means protecting your company from falling into legal problems.

  • Articles of incorporation and agreement with the local service agent.

Depending on the legal form of the company, it may be necessary to draft and sign a contract of incorporation, and in some cases it may also be necessary to conclude a local service agent agreement.

  • Choosing a location to establish a company in the Emirates

The government of the United Arab Emirates requires a headquarters within the Emirates and a real address for the organization, and the facilities, buildings and spaces on the site must meet the special requirements stipulated by the Ministry of Economic Development of the emirate in which the economic activity is located.

  • Receiving the license

 Sometimes the investor must obtain approvals and additional special licenses from the federal government of the United Arab Emirates or from the local government of the emirate in which his economic activity is located.

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