Best Tips on Business Law in Dubai | LegaMart Articles
Business Law in Dubai

Best Tips on Business Law in Dubai

Dubai is a leading business hub. Investors and entrepreneurs from different countries strive to start their businesses there. One of the main reasons that attract entrepreneurs is Business Law in Dubai.

The Business Law in Dubai makes it hassle-free and straightforward for businesses in multiple ways. With the right understanding of its accommodating laws and the various ways in which you can set up your firm, Dubai is amongst the best regions to establish a new venture or expand an existing one.

Also, if you are interested in setting your business up in Dubai, the article below will be handy for you:

DUBAI: Best Place to Start Your Business

Mainland vs. Free Zone: Which One’s Better for Your Firm?

It is great to take the leap and set up your own organization. However, it is crucial to have a proper understanding of the type of company you should register as. This is because the company’s type defines the working of its daily operations. At the same time, you must also look into the other affecting factors too. These include ownership, place of work, and scope of business, amongst others.

Mainland Companies in Dubai enjoy the freedom to work in any place in the UAE. However, a foreign investor is allowed only a 49% share, while 51% of the company’s share would have to be owned by a citizen of the country.

On the other hand, Free Zone companies are allowed to work only in their own zones. Nevertheless, the firms in these zones enjoy a much more relaxed business law, and incentives are better too. Dubai has around 40 business zones, including the International Airport and the Dubai Techno Park. Foreign investors operating in the Free Zones can hold 100% of their companies’ shares as opposed to the Mainland Companies.

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The Basics for Expats

Dubai has a large pool of expatriates from all across the globe, most of which wish to have their own business in the city that they now call home. The business laws in Dubai are extremely accommodating when it comes to ex-pats registering their businesses. However, there are a few things to keep in mind here.

As a limited company, you, as an owner, will be enjoying all the privileges just as a local company when it comes to setting up a business. This holds true only in adherence to the mainland or free zone laws. Sectors such as investment, banking, and insurance also should not be included.

You would also need to get a license and approval from the Economic Department and register your business at the Dubai Chamber of Commerce and Industry. The business owners have an option to choose between a joint venture with a local company or a sole proprietorship.

According to a legal expert, Dr. Hassan Elhais;

Joint venture is beneficial if you have a specific project or technology. For a strategic partnership, lawyers in Dubai can advise on structuring, drafting, and negotiating.”

Business Law in Dubai

Bankruptcy Law

The Bankruptcy Law is one of the most talked-about business laws in Dubai. This is because of the hassle it caused in 2008, as well as the resolving of said hassle in 2017. Therefore, it is essential to understand this business law properly before deciding.

Federal Law No. 18 (1993), or the old law, aligned itself to the framework of the Commercial Companies Law, the Civil Code, and the Commercial transactions law. Due to this, owners who declared bankruptcy faced harsh consequences and criminal charges. With the new law, Federal Law No. 9 (2016), the business law has set up a Financial Restructuring Committee and strives to find new alternatives to insolvency. Overall, the law is less harsh and more understanding for the individuals. Thereby making Dubai’s business sector a booming industry where everyone feels secure in their investments.

However, it is always a good idea to advance with caution. This is because the laws may provide more leeway, but they are still stringent and very strict with their penalties. Prison sentences up to 5 years and a fine of Dh 1 million is not uncommon if you mess with this business law.

General Laws Applying to All Business Ventures

Regardless of what sector you choose to set up your business in, there are a number of business laws to follow. These laws include those that govern the Electronic Transmissions and Commerce laws. Also, these comprise of Federal Law No. 4 (1979), which combats Commercial Fraud, Federal Law No. 20 (2016) on Mortgage to secure debt, Customs law of the GCC States, and the Protection of Intellectual Property and Trademark laws.

The business sector in Dubai is growing at a rapid rate, and the business law setup accommodates the ventures perfectly. However, it is always imperative to know all aspects of the law before setting up your business venture.

Also, you can ask for help and a legal consultant from our lawyers in the United Arab Emirates.

How Can Corporate and Commercial Lawyers Help You?

Corporate and commercial lawyers usually deal with commercial and business legal matters; they assist with transactions, documentation and paperwork, but they may also help in other company issues that require motions, actions and issues with the courts.
For example when you hire a commercial lawyer for running your business in Dubai, the person usually owns a business or is a manager of one. These legal professionals are versed in transactions, financial matters, economic and legal disputes, litigation and various other issues.

They tend to have extensive experience in contract drafting, company merges and acquisitions, employee agreements, negotiations and similar items. As with other lawyers, some work through a law firm, and others are hired exclusively through a business and tend to the needs of that corporation specifically. These legal professionals have a law degree and have passed the bar exam with all accompanying rights and duties of other legal representatives.

Corporate Lawyers in Dubai

Here are some of our best Contracts in LegaMart that can provide your Contract drafting needs;

Of course, you can see the whole list here.

  • Gaurav Bangia
    Gaurav is an independent lawyer having enrolled with the Bar Council of India and Bar Council of Delhi. He is a broad-based corporate, international commercial and business lawyer.
  • Ayham A. Othman
    Ayham A. Othman is currently the Corporate Dep. Director and the Co-Managing Partner of Clout Legal Consultancy Firm in United Arab Emirates. Ayham has brought to the firm’s practice over 14 years of experience in corporate and commercial legal matters, civil and commercial litigation, in addition to his negotiation and mediation recognized skills. His pragmatic and results-driven approach has made him a trusted advisor to both national and regional corporations as well as many prominent members of the UAE and Jordan business landscapes.
  • Federico Vasoli
    Federico is a cross-jurisdiction and cross-cultural lawyer. He also is admitted to the Bar of Milan and to the Malta’s Chamber of Advocates as a European Union lawyer and by the Vietnamese Ministry of Justice as a foreign lawyer.

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