GNcareers, from Gulf News

The nitty-gritty of business setup

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With modern business infrastructure and a multicultural populace, the UAE is considered one of the ideal destinations for any foreign investor to establish business. However, it always pays to carry out a sound due diligence process to ensure that all elements are in place before taking the plunge.

Location – Businessmen can choose to set up in the mainland or the free zone. Those who wish to own 100% of the business sans import and export taxes can opt for the latter. However, free zone firms cannot trade within the UAE market unless they have a local agent. Meanwhile, entrepreneurs who opt for a mainland setup are required to hire a local sponsor who will own 51% of the business.

Categories and licences – There are five categories open to foreign entities: limited liability company (LLC), joint venture, public joint stock company, limited partnership and private joint stock company, with LLC being the most common. And depending on the firm’s activity, it can be issued an industrial, professional or commercial licence.

Registration and costs – The process of registering a business entity with the relevant authorities and the fees involved vary, depending on the nature of the business and category of the investor. Thus, businesses are advised to factor into their business plan the required documents and financing options available for their type of venture.

For a hassle-free procedure, investors are advised to engage a business consultancy firm to help them through the entire formation process.



Handy Hints

• Businesses can set up in a free zone or mainland

• Licences are industrial, professional, commercial

• Consultancy companies aid in business formation



Source: Ellen Joyce Soriano, Special to Classifieds

The writer is a freelancer