Articles

Guide to Doing Business in the United Arab Emirates 2020

by Elaine E. Traditional Chinese Medical Center


(Source: https://www.pexels.com/photo/tallest-structure-and-building-in-the-world-3214991/)

The UAE comprises 7 Emirates; Dubai, Abu Dhabi, Ras Al Khaimah, Ajman, Sharjah, Umm Al Quwain, and Fujairah. Before the Emirates discovered oil, nomadic farming, fishing, date cultivation, seafaring, and pearling were the primary driving forces of their economy.

The discovery of oil changed the economy for the better. Different sectors like the real estate, construction, extraction of crude oil and gas, repair services, and wholesale and retails now influence the economy. The UAE continues to enjoy economic stability because of its strategic location, sufficient financial reserves, consistent government spending, investors, and large sovereign wealth.

Understanding the UAE Business Laws

The UAE has put in place several laws for people to conduct business smoothly. As an entrepreneur, it is your responsibility to adhere to laws that control your business, protect the environment and health and ensure safety, control the free zone which your business is set up, and protect consumer, labor, and intellectual property rights.

Business bankruptcy law in the UAE provides a legal structure to help struggling companies in the Emirates to avoid liquidation and bankruptcy through different strategies. This includes financial reconstruction, mutual out-of-court financial reconstruction, ability to secure new loans under the terms outline by the law, etc.


Doing Business in the UAE

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If you’re looking to establish a business in the UAE, you should be familiar with the options available to foreign investors. They include;

Trade from Overseas

The UAE allows foreign companies to conduct business activities in the country. A foreign company can trade in the UAE from its home country. Foreign companies can retain ownership by creating a representative office or branch; this gives them full ownership of the company under the UAE Commercial Company Law.

A branch can conduct commercial activities and enjoy profits without any issues. It is necessary to consult a law firm in Dubai where the experts will help you to understand the commercial law. A branch is licensed to only conduct the activities outlined in its commercial license or similar activities carried out by the parent company in its country of origin. A representative office, on the other hand, is not allowed to earn profits and its commercial activities are limited. It can only promote the services and products of its mother company as well as engage in promotions.

Conducting Business through an Agent

A foreign investor can choose to have an agent representing his interests in the region rather than establishing a physical presence. This is the most common type of distribution. The agent represents the foreign investor in the sale and distribution of products or other services for an agreed fee.

The UAE Commercial Agencies Law provides guidelines to protect distributors and agents. This is why you need to consult a law firm in Dubai to understand the complexity of conducting business through an agent. The law requires you to choose UAE nationals as agents or companies owned by UAE nationals and located in the Emirates.

Setting Up a Local Establishment

A foreign investor has 2 options for setting up a local establishment; mainland or offshore businesses. Your decision depends on the distribution of your potential customers and the nature of the business you intend to do.

The onshore or mainland businesses have fewer limitations on how to conduct commercial activities, and there is no restriction on where you can open your business as long as it’s onshore. Free zones, on the other hand, are managed by different authorities and they are free to conduct commercial activities in their free zones and outside the Emirates.

Joint Venture

Many foreign companies who wish to join the UAE market can opt for joint ventures. This type of investment allows you to own equal shares, take a leading role in the management of the enterprise, and to enjoy the company’s profits.

A joint venture allows a foreign investor to venture into new markets, create new products, and share resources and risks. Before starting a joint venture, you should decide whether you will establish it in the free zones or the mainland. This depends on the type of business and customers you want to attract.

Acquiring an Existing Local Business

Did you know that foreign investors can acquire or invest in already existing local establishments? Before investing in this type of business, you need to hire professionals from a reputable law firm in Dubai to advise you and investigate more about the establishment. It is also necessary to consider the location and type of business. It’s always wise to consult a professional to avoid being scammed.


The UAE has one of the fastest-growing economies in the world; this is one of the reasons why it is attractive to foreign investors. The laws also favor businesses by providing guidelines and cushioning investors from losses and ensuring that they conduct their commercial activities smoothly.



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About Elaine E. Junior   Traditional Chinese Medical Center

0 connections, 0 recommendations, 5 honor points.
Joined APSense since, July 1st, 2019, From Dubai, United Arab Emirates.

Created on Jun 15th 2020 07:22. Viewed 116 times.

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