Top 5 Mistakes Entrepreneurs Make When Starting a Business in the UAE (2025 Edition)

Introduction

Starting a business in the UAE is straightforward, but choosing the wrong structure, activity, or Free Zone can cost thousands. This blog highlights the top mistakes new business owners make — and how to avoid them.

Mistake #1: Choosing the Wrong Jurisdiction

Entrepreneurs often select a Free Zone when their clients are mostly in Dubai Mainland — leading to compliance restrictions.
Fix: Choose jurisdiction based on client location, not price.

Mistake #2: Selecting the Wrong Business Activity

Choosing a cheaper or incorrect activity leads to:

• License amendments
• Delays
• Visa rejections
  Fix: Get activity approval from experts before applying.

Mistake #3: Ignoring Banking Requirements

Banks require:

• Office address
• Website
• Business plan
• Clear financial model
  Fix: Prepare documents professionally before applying.

Mistake #4: Underestimating Visa and Office Costs

Flexi desk licenses give limited visa quotas.
Fix: Choose office size that matches staff plans.

Mistake #5: Not Considering Corporate Tax Compliance

All UAE companies are now in scope of Corporate Tax.
Fix: Implement accounting from day one.

FAQs

What’s the biggest risk for new investors?

Selecting a Free Zone incompatible with their business activity.

 

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