It is surprising how such a large number of businesses are owned by entrepreneurs in their personal capacity even though significant improvements to the regulatory business setting have been made.
Sole proprietorships/establishments have naturally been embraced in this dominion as they are thought to be cost effective, and also quick and easy to establish relative to the Limited Liability Company (LLC).
However, sole proprietorship, unlike the Limited Liability Company, does not promise the business owner tranquility of mind and financial safety.
While acknowledging that local involvement, in the Middle East, is an essential part of doing business, numerous business owners still continue to employ a sponsor or locally based partner.
However this can be troublesome for the business in case of the sponsor’s demise.
An established business may quickly become economically/operationally unstable up until prolonged bouts of litigation have been employed by the successors in order to settle inheritance matters.
Foreign business owners must aim to adopt a business structure which safeguards their assets and also lessens the possibilities of business disruptions which are a consequence off the UAE inheritance law.
It is imperative to obtain the optimum professional advice to make sure that the business is established perfectly.
This depends on your business type, budget and longer-term aims for the business, but commonly consists of ring-fencing foreign and domestic ownerships both.
Many foreign investors can safely retain 100% business control and all its revenues after having employed a specialized sponsor that fulfils the country’s input necessities.
Individual business owners must also look to safeguard their assets by holding their UAE business’s interests in a holding company offshore.
The Abu Dhabi Global Market (ADGM) is one option. A chief advantage to it is the decreased cost on the expensive foreign attestation and lawful translation fees.
Establishment of a new Limited Liability Company has so much simpler now after the latest introduction of streamlined processes by the Dubai Economy which allows the incorporation procedure to be conducted in one location.