Dubai is undoubtedly one of the best places to start a business. However, you have to adhere to the strict laws and regulations of the country. If you are thinking of relying on a Business setup company Dubai to help you out, wait a second. Not all business setup companies are green flags. Some of them can be red flags, and being unaware of them can cost you big.
For a first-timer, hiring a consultant is the safest option. But do not rush into it without understanding the system or learning about the consultants you hire. If proper research is not conducted before hiring the consultant, it might later lead to complications such as hidden costs, legal troubles, or unnecessary delays. In this blog, we will look at some of the red flags to watch out for when hiring a business setup company in Dubai.
Lack of transparency about ownership
What makes a business setup company in Dubai truly great? Its transparency. Some consultants mislead the clients about the ownership without clarifying anything about restrictions. While 100% foreign ownership is allowed for various business activities, some sectors still have certain regulations regarding ownership. If there are no written agreement explaining about the ownership structure, it is a red flag to look out for. You need to demand documented proof of ownership rights before proceeding with the registration of the company in Dubai.
Unrealistically Cheap Packages
If a business consultation company in Dubai promises you with unrealistically cheap packages, be cautious about them. Some companies might promise you a company setup within a day or two at an unbelievably low price. If they have not provided a breakdown of the package, with vague pricing, it could probably be a red flag. You need to ask them for the complete cost structure, including the license fee, visa renewal, and additional charges. Some business setup companies come up with hidden charges at a later phase. The package might look affordable at first, but later it might cost more at the end. And cheap packages may also include unlawful practices.
No clarity about jurisdiction
You might be familiar with the various jurisdictions that Dubai offers for businesses, such as the mainland, free zone, and offshore. Each of these jurisdictions have their own rules A reliable consultant service will guide you through every rule and regulation in Dubai and will also help you choose which jurisdiction suits your business type. There are also limitations to market access when you choose certain jurisdictions. It is important that you have a clear understanding of all these before starting your business in Dubai.
A shady consultant will be vague about these advices. They often suggest a free zone, mainland, or offshore without understanding your business model, and only by prioritizing their commission. A local sponsor is needed to set up a business in mainland Dubai. If your consultant has not given you a legitimate sponsor, they might pose a threat to your business operation at a later stage. So, it is very important that you choose your sponsor and consultant carefully.
No physical office
A professional business setup company in Dubai will have a registered office address, trade license details, a landline number, and a corporate email. If a company only operates through social media applications like WhatsApp and refuses to meet in person, you should be concerned about its credibility. Make sure to verify the consultant’s trade license through the UAE portals.
You must also check their client testimonials or customer reviews before proceeding with the company. Customer reviews and client testimonials can tell you a lot about the company and its approach to the clients.
Ignoring Post-Registration Requirements
If you are a newbie entrepreneur, you might have a notion that company registration in Dubai is a one-time thing. Whereas in reality, the role of the consultant is not over with the license issuance. In the long-run, you will need the help of a consultant with license renewals, visa renewals, filing government documents, tax compliance, etc. Some consultants will disappear after the registration, leaving the clients in total confusion. While choosing a business set-up company in Dubai, choose one that offers long-term support and services.
Delays in the process
A genuine consultant will reach out to you at each stage of the setup process, and they will also notify you regarding the timeline. It is common to have delays in government approvals. However, in such a situation they will notify you on a timely basis. If repeated delays occur that go unexplained, it indicates inefficiency on their side. Make sure to understand the timeline or reason for delays before making the payments.
Conclusion
Dubai is a magnet attracting entrepreneurs from around the world. It is one of the ideal places to set up your business. However, if you are new to Dubai, you need to understand the rules and regulations very carefully. Most entrepreneurs choose a business setup professional in Dubai to help them set up their business. Choosing the wrong business setup company in Dubai can lead to a lot of troubles, including financial losses and legal complications. Before proceeding with company registration in Dubai, verify the credentials and choose a company that is transparent about its operations. A reliable consultant will act as a long-term partner in the success of your business.
