To begin with, establishing a business in the UAE is an exciting prospect. There is no doubt that the UAE provides enormous and lucrative opportunities for entrepreneurs, startups, and corporations.

The United Arab Emirates enjoys access to international markets and trade, as well as favorable business circumstances that promote economic growth. It is the 15th largest global commercial center and a global commercial hub. There is no limit to how far you can go if you successfully develop and expand a firm.

However, dreaming big about a concept isn’t enough; putting it into reality necessitates a well-thought-out strategy and careful consideration. Keep these seven factors in mind when approaching firms in the UAE to collaborate and utilize their business:

Understand the need of the business: Determine the type of business you want to start and if it will be based in one of the UAE’s several free zones; these two considerations will determine whether a local partner is required. Do you want to start a professional services firm? They don’t require a local partner if they’re 100 percent foreign-owned. The same can be said for enterprises that operate in free zones.

Know the partnership requirement: Obtaining a professional services license, establishing a free zone, or incorporating an LLC are the three most frequent options for foreign entrepreneurs to start a business in the UAE.

The only way for foreign entrepreneurs to own 100% of their business and operate outside of a free zone is to obtain a professional services license.

Zones with no restrictions This is another option for international entrepreneurs who want to keep 100% ownership of their company. Free zones are essentially defined regions around the UAE that provide different incentives to people looking to start a business, including 100 percent ownership and tax exemption for both individuals and corporations.

LLCs are required for firms that intend to trade locally in the UAE and fall under either commercial or industrial licenses –including retail and trade businesses as well as manufacturers.

Analyze the deal: The profit distribution is an important aspect of the partnership agreement, and each partner’s profit share is clearly defined in the written agreement. This enables for the straightforward and transparent processing of profits and their distribution to partners following the conclusion of the company’s audited financials. 

When comparing profit share to shareholding in a corporation, it’s worth noting that profit share can be set at a higher percentage for one partner regardless of shareholding control.

The capital contribution, which is the company’s paid-up capital, is determined and included in the partnership agreement. This is noted in the agreement, and the share capital is distributed among the partners as a result.

Plan out the business activities: A partnership agreement establishes the company’s goals, which serve as the foundation around which the organization is built. In the event of future development or the addition of new operations to the company’s portfolio, all partners’ consent may be necessary, and the agreement may need to be revised to reflect the new goals.

Keep the reports ready: The partners agree on how the company’s financial reporting and auditing will be handled, particularly how the audited reports will be acknowledged formally every year by the board of directors.

The partners agree in advance in the partnership agreement on how the voting processes within the organization will work when major decisions must be made. 

The voting rights of the company’s shareholders, as well as the minimum vote percentage required to accept crucial decisions, are pre-determined and agreed upon in the partnership agreement, allowing for smooth operations.

Prepare for future disputes: The dispute resolution forum is also included in the partnership agreement, and by pre-determining it and ensuring that specific mediation options are included before starting with litigation, any conflicts between the partners can be attempted to be handled amicably in the first instance.

Understand primitive rights: Existing partners may be granted ‘preemptive rights’ under the terms of the partnership agreement. By incorporating preemptive rights into the partnership agreement, an existing partner ensures that he has the option of purchasing the other partner’s shares before they are sold to anyone else. By integrating the said word, an existing partner secures the legal protection of its interest.

The United Arab Emirates is home to a diverse range of enterprises and startups. This may give you the impression that any business idea will run easily, but it will almost always necessitate a significant amount of labor in the background. This research can help you understand the business environment and how to proceed with your endeavor. This comprises laying out the business’s model, foundation, and architecture.

If you’re seeking a reputable organization to assist you in establishing your business in Dubai, YouFirst is the place to go.

YouFirst is a Business Setup Company that offers a wide range of Business Setup Services in the UAE, from company creation to business consultancy to legal procedures and obtaining UAE Government permissions on business problems.