Common Mistakes That You Should Avoid While Setting Up Your Company in UAE
                     Common Mistakes That You Should 
Avoid While Setting Up Your Company 
in UAE
An Overview
United Arab Emirates or UAE is one of the most investor-
friendly destinations around the world. In fact, the United Arab 
Emirates or UAE is one of the most attractive locations for 
company formation. If you are new to business, then you have 
to go through certain parameters to undergo a hassle-free 
company formation. Milestone is a professional project 
management company that can help you with 
freezone company registration and renewal in Dubai, UAE. 
Certainly, setting up your company in the United Arab 
Emirates is quite easy but there are a few mistakes that you 
should avoid. 
Here are some common mistakes that 
can help you set up your company in 
UAE: 
01 Not Choosing the right free zone, company activity and business license
02 Improper legal agreements with local sponsor
03 Lack of agreements 
Not Choosing the right free zone, 
company activity and business 
license
You need to understand that choosing an appropriate 
free zone, business license and company activity is 
very important step in the process of company 
formation in the United Arab Emirates. Certainly, the 
United Arab Emirates or UAE offers several options for 
business incorporation. However, choosing the wrong 
business structure will result in penalties and 
blacklisting of your company. 
Improper legal agreements 
with local sponsor
When it comes to company formation in the UAE, you 
must look for a local sponsor. The UAE local sponsor 
must hold 51 percent of your company shares. 
Otherwise, you have to face legal penalties for your 
business. 
Lack of agreements 
When it comes to company formation in the UAE, 
businesses shouldn’t rely on verbal contracts. 
Wondering, why? Well, it’s pretty challenging to prove 
the statement in case of any future dispute. 
Thanks!
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