1. Choosing the Wrong Jurisdiction

Mistake: Setting up in a Free Zone when you need to trade in the local market – or going Mainland when you don’t need to.
Solution: Know your goals. If you need to sell directly in Dubai, opt for a Mainland licence. For international trade or consultancy, a Free Zone might be ideal.

2. Picking the Wrong Business Activity

Mistake: Registering an activity that doesn’t reflect your actual operations.
Solution: Match your activities exactly with those listed by the relevant licensing authority to avoid compliance issues later.

3. Misunderstanding Ownership Rules

Mistake: Confusion around local sponsorship – especially for Mainland setups.
Solution: Many Mainland companies can now be 100% foreign-owned, but some sectors still require a UAE national sponsor or service agent. Know what’s required for your industry.

4. Underestimating Costs

Mistake: Focusing only on licence fees.
Solution: Account for all costs – visas, office rent, insurance, deposits, legal fees, and renewals.

5. Renting Unnecessary Office Space

Mistake: Leasing a full office when a flexi-desk would suffice.
Solution: Start small. Many Free Zones offer shared or virtual offices, which can save you money in the early stages.

6. Rushing the Process

Mistake: Diving in without proper research or advice.
Solution: Take your time. Work with experienced consultants who can guide you through each step.

7. Choosing a Non-Compliant Name

Mistake: Using restricted words or formats that don’t meet UAE naming rules.
Solution: Follow DED or Free Zone guidelines – your company name should be clear, appropriate, and compliant.

8. Submitting Incorrect Documents

Mistake: Incomplete or incorrect paperwork causes delays.
Solution: Double-check every form, signature, and ID. Ensure documents are notarised if required.

9. Struggling to Open a Bank Account

Mistake: Assuming it’s automatic.
Solution: Be prepared with a solid business plan, complete company documents, and responses to KYC (Know Your Customer) checks.

10. Not Planning for Visa Requirements

Mistake: Assuming your trade licence automatically includes visas.
Solution: Each licence has a visa quota. Plan how many you need and budget accordingly.

Whether you’re choosing between Free Zones, evaluating costs, or navigating ownership rules, we simplify the process so you can focus on growing your business. Get in touch with our team today for tailored, expert advice.

Jenna Jenkins is Managing Director at Luxe Incorporations.
[email protected]
+971 4 410 7278