For those looking to make a promising investment while avoiding the lengthy process of registering and launching a business, buying a ready-made business in the UAE is a convenient alternative. This is an excellent way to enter the Dubai market due to the established operational processes and the ability to start working and earning profits immediately.
Entrepreneurs do not need to search for a free niche; they can use an established brand name, customer base, and partnerships to find new areas of development. Investing in shares of functioning companies also qualifies you for a residence permit in the UAE.
Advantages of buying a ready-made business in the UAE
The decision to buy a ready-made business in the UAE will give you the following advantages:
- Established main operational processes within the company;
- Access to equipped offices and warehouses;
- Ready-made client, partner, and supplier bases, so you won’t have to spend time searching for them;
- A formed business model that can be modified at your discretion;
- The opportunity to generate profit from the first month of operation while keeping taxes low;
- Established reputation that allows for easy market development, attraction of new specialists, credit approval, and partnership building;
- Low risk due to having already passed the formation stages with more obvious prospects for further development;
- No need for a lengthy business registration procedure: you can handle all formalities quickly and start generating income.
Investing in a UAE business gives you an opportunity to obtain a resident visa and an Emirates ID (resident identity card). Competent entrepreneurial investments offer favorable prospects for profit growth and immigration opportunities.
How to find the best business opportunity in the UAE?
Despite the many advantages of purchasing an existing business in the United Arab Emirates, one important task is selecting an investment opportunity. The Eastern market has its own distinctive features and differs from the European market. Entrepreneurs need to know where to look for ads and what to consider when making a decision.
Online platforms and marketplaces
For Europeans, offers to sell a business are freely available on various specialized platforms, allowing them to immediately learn about the company’s basic operations and details. However, a slightly different approach is used in the UAE. In this country, you will not find ads for firms for sale on open marketplaces. Such transactions are carried out only through specialized companies. You can submit a request for what you’re looking for in Dubai and receive interesting proposals.
This approach is quite justified. Open sales can damage a company’s reputation because potential clients, partners, and counterparties may draw conclusions about problems in the business, which will lead to problems for the new owner. Company owners in the UAE prefer confidential sales, which positively affects the business’s future functioning, preserves partnerships, and maintains a good reputation.
Legal assistance
When buying a ready-made business in the United Arab Emirates, legal support is an integral part of the process. Before concluding a contract, it is important to carefully analyze all company documents to ensure there are no debts, fines, or blockages. This analysis should be performed by an experienced lawyer.
Additionally, professional assistance is required when drafting a sales contract to ensure that the terms meet the requirements of both parties. A lawyer can also accompany the transfer of ownership rights, allowing you to quickly and efficiently complete the process of buying a business.
A UAE residence permit gives you the opportunity to:
- Live in a country with a developed economy;
- Open accounts in reliable banks;
- Do business in the UAE;
- Obtain permits to enter Schengen countries and the USA under simplified procedures.
Leave an application and get a consultation with an immigration specialist
The process of buying a ready-made business
According to the following algorithm, the process of buying a business in Dubai is as follows:
- Contact a specialized company and select an investment opportunity.
- Legal verification of the business.
- Sign a sale and purchase agreement.
- Register the title in the new owner’s name.
Preliminary analysis and data verification
At this stage, a thorough study of the company’s activities is necessary to ensure that there are no issues that could interfere with its future growth. First, financial reports, bank statements, and turnover figures are evaluated to get an objective picture of the company’s financial situation. The potential owner needs to understand if the company is profitable, how much it is profitable by, if there is a credit load, and how significant it is. It is important to assess if the entire business is funded by loans.
Be sure to analyze contracts with customers and suppliers. For example, the business’s main profit should not depend on a small number of large buyers because terminating work with them could result in serious losses. It is also important to check if the Ministry of Economy has blocked the company’s activities.
Evaluate contracts for the lease of premises and employees to ensure the documents are in order. Otherwise, deficiencies will have to be corrected after the purchase of the business. For example, if there are errors or contracts that have been incorrectly concluded, or if not all employees are officially employed, these issues will have to be corrected. The future owner should also assess the company’s reputation in the market with regard to conflicts, lawsuits, and negative media publications.
Legal aspects and paperwork
When it comes to legal matters, it is important to review the company’s foundational documents, such as the articles of incorporation, license, meeting records, and joint venture agreements. The lawyer must ensure that the business operates in accordance with the law. Next, a sale and purchase agreement with the following information is drafted:
- Identification of the parties;
- Description of the object of the transaction;
- The value of the company and the payment processes and terms;
- The guarantees and representations of the parties;
- Other details may be included depending on the circumstances.
The buyer is only required to provide proof of identity. The seller should provide a passport, corporate documents, financial statements, and tax payment data. After signing the sales agreement, ownership of the business is transferred. The current owner submits a corresponding request to the Ministry of Economy online and provides the contract and other documents. Payment is then made in accordance with the agreed-upon terms and conditions. Additionally, data must be updated at the Chamber of Commerce of the relevant emirate.
Financing the purchase
You can purchase an existing business in Dubai or another emirate with personal savings or credit funds. To make a transfer from personal finances, open a UAE account and confirm the origin of the funds. An effective option is to attract investors. The UAE has a strong economy, which contributes to the successful promotion of businesses. As a result, most of the companies sold generate high profits. Investments in such projects pay off quickly and may be of interest to many investors.
Different aspects of doing business in Dubai
The cost of operating a business in Dubai depends on many factors. First, the price is influenced by the type and scale of the business activity. Obviously, an online store that uses dropshipping will cost much less than a fully-fledged enterprise that produces certain goods. At the same time, the difference in profitability is also significant. Companies that function online, without a physical office or large team, cost the most. There are advantages to buying such a business: you don’t need to delve into many processes, and you can immediately start working. With a good approach, you can successfully scale up over time.
The price is also determined by the business’s physical location. For example, companies in more developed and well-known emirates, such as Dubai or Abu Dhabi, will be much more expensive than those in less developed emirates. The location of the company within a particular area of the emirate also provides a strategic advantage. For stores, salons, and restaurants, the location largely determines the customer flow.
The manner of conducting business is determined by its location within mainland or free-zone territory. In the first case, trade relations can be conducted throughout the country, but the activity is subject to a fee. Also, 100% company ownership by a non-citizen of the UAE is rarely allowed. A zero rate is applied to income up to AED 375,000 (USD 102,000), and taxes in the UAE are paid at a rate of 9% after exceeding this limit. In free zones, entrepreneurs can enjoy a preferential 0% tax rate regardless of their level of profit, but they can only work within the zone and abroad.
Laws and business regulations
Although the UAE’s laws are loyal to entrepreneurs, current regulations must be followed to operate legally and increase profitability. The federal decree-law “On Corporate Companies” is the main legal act that regulates most issues. The document outlines the types of activities and the requirements for them, as well as the specifics of how businesses function. Additionally, there are legal acts that address more specific issues, such as “On Commercial Transactions,” “On Financial Crimes,” “On Family Companies,” “On Taxation of Corporations and Enterprises,” “On Trademarks,” and “On Copyright and Related Rights.”
What is better: buying an existing business or registering a new one?
There are undeniable advantages to working with a ready-made business in Dubai. Entrepreneurs invest in functioning projects, immediately profit off them, and develop new business strategies with a creative outlook. There are no unnecessary expenditures of time or finances for launching the project, setting up operational processes, finding staff, or building a client base. A functioning company already has all of the above, and the new owner’s task is to guide the business in the right direction, join processes, and improve the strategy if possible.
However, there are pitfalls to buying a business in the UAE, such as a dubious reputation, surfacing debts, obsolete equipment, inefficient work processes, and team problems. To avoid these issues, carefully analyze the project before purchase and review all legal aspects.
Starting a business from scratch can be more of a hassle for the entrepreneur in the initial stage. Depending on the niche, launching a project can entail many tasks and expenses, such as arranging premises, purchasing equipment, finding employees, and registering bank accounts. Despite having to start from scratch, there is an opportunity to work for yourself rather than correcting someone else’s mistakes. There is no risk of negative reputation; you can form partnerships and attract clients with a clean slate.
Although you will have to spend time finding the right specialists, you will be able to build a team that meets your needs and values. When buying an existing company, there are potential restrictions in management due to the existing charter. When creating a business in Dubai from scratch, the entrepreneur acts according to his own rules and can attract partners with whom he is comfortable working. There is no need to compromise with existing shareholders. Experience shows that it is often easier to create something new and effective independently than to try to adapt someone else’s project to your preferences.
Entrepreneurs and their families can obtain based on starting a business without fixed investments.
The process of registering a company in the UAE varies depending on its location — on the mainland or in a free economic zone. The general process for registering a business from scratch involves the following stages:
- Determine the niche, type of activity, and location (search for office space and sign a lease agreement). Prospective entrepreneurs can choose from a wide variety of business structures, the most popular of which are the sole proprietorship, limited liability company (LLC), private joint-stock company, and branch of a foreign company. The requirements regarding the number of founders and the possible share of foreign ownership differ for each form. In free zones, the equivalent of an LLC is the most common form of activity, known as an FZ-LLC (free zone company with limited liability), which allows for 100% foreign ownership. At this stage, one must also find suitable premises and agree on the lease terms.
- Select the name. The business name must be unique. It can be niche-specific or completely abstract. Depending on the business structure, there may be requirements for mandatory prefixes to the name. Entrepreneurs should prepare several options and submit them to the Department of Economic Development for approval. For trademarks, approval from the Ministry of Economy is required.
- Register the company. First, the following documents must be prepared: an application form, a business plan, copies of the founders’ passports, specimen signatures, a plan of intent, a charter, financial statements for the previous two years, and a letter of recommendation from the bank.
Next, preliminary approval is sought from the Department of Economic Development. If necessary, additional permits required for certain industries (e.g., tourism or healthcare) can be requested from the relevant authorities. At this point, one must pay the applicable fees, obtain the necessary licenses, and register with the relevant Chamber of Commerce. Applications for registration can be submitted in person at government service centers or online via the Basher service.
Costs and processing times
A registration fee of AED 3,500 (USD 950) applies when setting up a company. A license issuance fee is required as well, the amount of which depends on the type of activity and averages around AED 10,000 (USD 2,700). Additionally, there may be expenses for preparing documents, such as drafting the memorandum and articles of association, a process that involves lawyers.
The company registration process takes about 12 days: 10 days are required for preliminary approval, and 2 days for final registration. Consider the time needed for preliminary document preparation and necessary formalities.
With legal support, the steps described above are mostly carried out by specialists, and the applicant receives the finished result in the form of a registered company and an visa within the agreed timeframe.
Successful management strategies for purchased businesses
One of the most important aspects of buying a ready-made business in Dubai or the UAE is carefully and competently analyzing the company’s documents. First, it is important to identify any legal issues and ensure that there are no outstanding debts, including taxes and supplier payments. To avoid problems at the beginning, it is important for the new owner to have full information on the company’s financial affairs. The entrepreneur must understand the cash flow at the time of purchase and consider specific ways to improve the situation.
Once the transfer of rights is complete and work on the new business has begun, implementing changes or making significant adjustments to the strategy is not recommended. After a change in management, the team and the company in general require an adaptation period. Therefore, it is best to stick to the current business model initially so as not to disrupt operational processes and then gradually introduce new solutions and approaches.
Foreign entrepreneurs should consider the local market’s unique characteristics, as well as the cultural and psychological traits of potential customers, partners, and employees. Approaches and tools that are effective in your home country may not be effective in the UAE. When working with locals, religious aspects of their lives must also be considered. For example, do not call or schedule appointments during mandatory prayers. Also, be mindful of holidays when scheduling appointments and weekends.
They appreciate a modest business dress code in the UAE. Despite communicating in English, they value respect for the Arabic language. For example, duplicate the translation on business cards. Arabs are flexible in their observance of schedules. They are conservative in their discussion of politics and religion, so try not to raise these topics in the business environment. In the UAE, business etiquette pays a lot of attention to gestures, so you should study some aspects in advance to avoid uncomfortable situations with partners.
Review of the unique aspects of buying a business in the UAE
Buying a ready-made business in the UAE simplifies the process and provides a functioning company with well-established procedures. However, there can be pitfalls, which can be avoided with the right research and assessment of options. Although registering a company can be worrisome initially, it allows you to immediately set the desired rhythms and strategies without adjusting to pre-existing schemes or correcting mistakes.
Everyone has their own preferences, but the conclusion is the same: developing a business in the UAE is profitable and promising. According to the Dubai Financial Market (DFM), companies operating in the UAE saw a 171% increase in net profit before tax in the first quarter of 2024. UAE banks operate under modern and flexible approaches due to the persistent exchange rate, and taxes, plus, government controls and restrictions are minimal. Entrepreneurship in the state is also an optimal basis for immigration because it allows you to obtain residency for yourself and your family members immediately on a long-term basis.
