Opening a business in the UAE attracts many foreign entrepreneurs who want to minimize the costs of its maintenance and reduce the tax burden. Instead of starting a new company and organizing their business from scratch, some choose to buy a ready-made business. Such a solution has advantages and disadvantages, which you should know in advance. We will tell you in more detail whether it is worth buying an existing company or registering a new one and how to buy a ready-made business in Dubai and the UAE.
How Best To Organize A Business In The UAE: Buy A Ready-Made Or Open A New One
If you want to open a profitable business in the Emirates, it doesn’t matter whether you buy a ready-made company that works for a certain period or register a new one. The main thing is correctly approaching the business organization process in both cases. In this article, we will focus on purchasing an existing company.
The Main Reasons For Selling A Ready-Made Business In The UAE
First, you need to understand that a ready-made company is often sold not because it is unprofitable or brought to bankruptcy, although this also happens. Therefore, it is essential to carefully check all aspects of the activity of the operating company. A successful and profitable company can be sold if:
- it was created for sale – in the UAE, some professional players especially generate and develop a promising business to sell it with maximum benefit;
- the owner urgently needs a large sum of money;
- disagreements or conflicts arose between several owners of the company, so they decided to sell it to divide the assets;
- the owner moves to another country for family reasons or to develop more profitable projects.
Pros And Cons Of Buying A Ready-Made Business
The decision to buy a ready-made company in the UAE has such vital advantages as:
- There is no need to understand all the intricacies of the legislation of the United Arab Emirates regarding the opening of a new company by a foreign investor, the nuances of the registration procedure, and the licensing process that will help to avoid technical difficulties and delays with registration;
- Quick profit thanks to the already established work of the company;
- Saving time on searching for employees and business partners and on developing a client base – all this remains from the previous owner;
- Good chances of getting a bank loan quickly, provided you buy an offshore or local company with an unblemished reputation and a good credit history.
The cons of buying a ready-made, operating company in the United Arab Emirates include:
- The obligation to conduct a thorough review of the business, which takes a lot of time, requires the involvement of experienced professionals in economics, financial activity, and jurisprudence and is quite expensive. If you want to check the company yourself, you risk missing something important and buying a company with debts or a damaged reputation, which will affect further business;
- The need to establish relations with an already established team, which is always more complex than forming a team from scratch;
- The complicated, expensive, and lengthy process of renaming the company if, for some reason, you want to change its name.
It is impossible to answer the question of which is better: to buy an already established business in the UAE or register a new company. But, having analyzed the pros and cons of buying a ready-made business, you can decide whether this option suits you or not.
The Most Promising Types Of Ready-Made Business In The Emirates
Having decided to buy a business in Dubai or another emirate of the UAE, you can choose any direction of activity. But foreign investors are mainly focused on the companies working in the field of:
- Public catering – the need for the services of cafes, restaurants, pastry shops, and others is extremely high not only among the local population but also among numerous tourists;
- Construction and real estate transactions;
- Car rent and service (service stations of broad and narrow focus or car washes);
- Tourism business, including agencies that organize excursions around the country and companies that provide the services of animators or diving instructors;
- Trade – from small shops selling souvenirs to supermarkets;
- Public service delivery – a sports club, a fitness center, a beauty salon, and other service enterprises.
How To Buy A Ready-Made Business In Dubai And The UAE
To establish a successful business in the United Arab Emirates by purchasing a ready-made, operating company, it is necessary:
- Check the financial position of the purchased company. You’ll need to conduct an examination of the primary documentation and obtain a statement from the bank confirming the turnover of monetary funds;
- Examine the client base so that it does not turn out that only a few large contracts brought all the company’s profit. Breaking them can be a problem in the future;
- Make sure that employment relations are correctly drawn up;
- Check the statutory documents, especially if there is a local co-owner, to make sure that he does not have the opportunity to influence the company’s work;
- Check the terms of the office lease and business premises;
- Check the bank account, and it is better to close it and open a new one;
- Analyze the business development plan;
- Make sure that the company is not blocked for violations by the Ministry of Labor and that the visas of the former owners and employees are closed.
- After conducting a financial and legal examination, the company will be re-registered.
If you want to buy a ready-made business in Dubai and other emirates of the UAE, which has no hidden problems, Dynasty Business Adviser specialists will select a suitable company, conduct an audit of its financial condition, help to conduct a sale and purchase transaction, and re-registration of the business in your name.