The right way to do business in the UAE: Do's and Don’ts

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Considered the gateway to the Middle East and as a strategic location between Europe, Asia, and Africa, the UAE is a magnet for businesses that are looking to expand their operations worldwide. Almost all major brands and business groups have made the Emirates their home; and why not, when the UAE Government is ready to welcome with open arms by way of zero corporate tax, minimum import duties, 100 percent foreign ownership, minimum regulations, and maximum opportunities. As a result, the UAE sits pretty at 16th position in the World Bank’s ease of doing business rankings.

Even though the UAE is a business paradise due to a conducive commercial ecosystem, companies looking to foray into the Arab’s second biggest economy need to understand certain aspects related to business practices, culture, custom, and etiquettes in order to become part of a burgeoning economy, successfully. 

The following are the do’s and don’ts for the businesses looking at the UAE as their next destination:

The Do’s of Doing Business in the UAE

1. Do select the ideal company formation

There are three types of companies’ formation in the UAE, namely Mainland, Freezone, and Offshore. First carefully understand the market you are targeting and then decide the company formation, as each comes with its own merits, geographical restrictions, and ownership limitations. Considering the long-lasting impact of the decision, it’s advisable to take the help of company formation specialists to guide through the procedures and legal requirements.

2. Do get the right licence

Depending on products, services, and objectives, businesses are required to opt from three types of licences — Commercial, Industrial, and Professional. Companies involved in trading activities, like sales, go for commercial licence, those involved in manufacturing apply for industrial, and for personally offered services, such as consultancy, professional licence is required. The license should carefully be selected as the documentation and approval procedure varies.

3. Do find a reliable sponsor

The most preferred type of company in the UAE is the limited liability company, which requires an appointment of a local sponsor/agent for registration. In Mainland business formation, the local sponsor owns 51 per cent of the total share of the company. It’s important to select a reliable sponsor, which manages official formalities and keeps you away from unnecessary procedural hassles. 

4. Do get your visa requirements sorted 

Since it’s the most basic requirement to operate in the UAE, procuring an investor visa is not a complex or time-consuming process. Authorities, too, are considerate in facilitating your foreign investor visa. However, you will still be required to complete all legal formalities to start business operations. The work visa is issued based on the type and duration of the business. A local sponsor again can be of great help by handling the application process.

5. Do team up with a strategic partner 

A new market, like the UAE, even though full of potential, can possess stiff challenges. Therefore, to gain a foothold in the region and reap maximum benefits, new businesses must ideally enter into mutually beneficial partnerships with reputed players. The Seed Group, for example, has diversified business operations across various sectors, along with strong connections in the business corridors of the UAE and the wider Middle East and North Africa region. Businesses from across the globe have forged strategic partnership with the Seed Group to benefit from its extensive knowledge and expertise of the business landscape.

The Don’ts of Doing Business in the UAE

1. Don’t be too casual

Modesty and mannerism play an important part in terms of overall business etiquettes in the UAE that business professionals are required to follow. To avoid any awkward business situations, it is important to study the cultural characteristics and business etiquette of any country and the same holds true for the UAE. Though very accepting and warm, the business community in Emirates might expect specific behaviour, when it comes to business dealings. This is one important aspects that business professionals must consider before meeting an associate or business partner in the UAE.

2. Don’t keep to yourself and operate in silo 

Being the access point to 1.5 billion consumers across the Middle East, Africa, and Asia, the UAE is abuzz with commercial activities. It makes sense for new businesses to socialise and create awareness about the brand and operations to gain a foothold in the region. The more you network and hold conferences, meetings, and public relations activities, the more business opportunities you create.

3. Don’t complicate things – take professional help

Right from the business registration to establishing a setup, the processes involved are just like venturing into an unchartered territory. Therefore, foreign investors should avoid handling business, registration, and licensing by themselves and involve local professionals who can help navigate through legal and official processes, which can become complex in the absence of required knowledge.

4. Don’t rely on verbal commitments

Any partnership or sponsorship should be entered into in black and white. To make things work and avoid legal troubles, draw a written legal agreement and get it attested in the local court. Do not rely on verbal commitments.

5. Don’t overlook the cultural sentiments

The UAE represents the quintessential cosmopolitan lifestyle and multinational workforce. The multicultural society lives in harmony due to mutual respect for each other. Therefore, new companies should ensure all their services, adverts, and official statements are in consonance with the local, religious, and cultural belief systems. At no point should sensitivities of any community or religion be hurt, which can adversely impact your brand image.

Following the aforesaid guidelines, any foreign business can easily become part of the UAE’s ever-expanding economy and grow its business manifold by talking along local aspirations in the best interest of everyone. 

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