In an amazingly good turn out of entrepreneurs, expats and locals alike, it’s clear to see there is a huge passion in the UAE for entrepreneurialism.
What’s less clear are the rules and regulations that come with this. Frankly, doing business in the UAE can be a newcomers nightmare. Not because there aren’t laws, but because there are laws that aren’t necessarily applied. In addition there are side agreements and other ‘common practices’ that are generally accepted but would unlikely stand up if challenged in court.
Helping entrepreneurial wannabes through this minefield, Mark Gilligan from law firm Squire Patton Boggs walked the eager audience through the various corporate structures that exist in the UAE to legally trade and the difference between on-shore and off-shore businesses.
Of particular interest to many in the audience was the operation of free zones – very much favoured by many expat entrepreneurs due to the ability to have 100% foreign ownership and no minimum share capital requirements, as well as lower regularity requirements.
Mark pointed out though the very important factor that many entrepreneurs over look, that if you are selling your services or trading on-shore in the UAE, despite where your license is held, you need an onshore presence. Physical trading always requires an on-shore LLC (Limited Liability Company), whilst if you’re operating a free zone license for a service business and wanting to trade outside of the free zone, you need a branch company in the UAE to be trading legally; this can be offered by some free zones but is a certainly a grey area that you should investigate before starting to sell your services.
Have I lost you yet? It’s complicated I know. I’ve come from a background of dealing with corporate structures so I could keep up; unfortunate even the jargon alone can be very off-putting to someone looking to simply see their idea come to life – or turn a hobby into a small business.
The bottom line is do your research thoroughly. Understand exactly what your start up or idea will do. Who will you be looking to trade with or serve, what are you trading? Anything that involves physical trade as supposed to a service needs to be on-shore.
Need help to cut the jargon? Why not contact me for a free upfront consultation. I can help you work through the terminology and where you can start your lines of inquiry before digging further into your ideas and business plans. Even the best thought out business idea still needs to fit within the legal framework of the country your trading from.
Top Tip; Never rely on just one source of information in the UAE. Speak to multiple free zone companies in different Emirates, the Department of Economic Development, and understand the full range of business offerings.
The UAE might have some barriers to entering business but the reward for those who preserve can pay off.
Thanks ever so much to the organisers of the Start Up Series 2016 – Sponsored by StartAD (New York University Abu Dhabi) with Flat6Labs Abu Dhabi, Mark from Squire Patton Boggs and hosts GlassQube Co-working Space Reem Island. A brilliant example that entrepreneurship is alive and well in the UAE and the although the country is still in its infancy, so many see the opportunities that lie ahead.