Business Disputes in UAE

You want to run your business as smooth as possible. However, sometimes, it is inevitable to encounter business disputes. In the UAE, businesses aren’t immune to disputes, litigations, and lawsuits that may arise from breach of contract or unmet expectation. Thus, it is not surprising to note that legal services Dubai are highly in demand in the UAE.

What are business disputes?

Business disputes happen when there is a breach over the terms and conditions of a contract or a disagreement between two parties. Disputes may happen between two or more companies, businesses and customers, employers and employees, and even between business partners.

There are different reasons for business disputes to happen. However, the bottom line is that when a promise is not delivered or an expectation is not met, then a business dispute can possibly arise.

What are the negative effects of business disputes?

No company owner would ever want to have business disputes to deal with and for good reasons. Business disputes have a wide range and far-reaching negative effect on companies.

In the UAE, many businesses have lost valuable time, opportunities, and money because of disputes. Some even have lost their good reputation and eventually have to close down because they fail to hire expert corporate lawyers in Dubai.

In some cases, businesses are not only ended when disputes are filed but also relationships and trust.

How are business disputes resolved?

The most common methods of resolving business disputes in the UAE are litigation in the courts or arbitration. However, between the two, arbitration is more popular. The reason behind this is that the latter is more cost-effective and less stressful.

Other methods of dispute resolution are mediation and conciliation. In Dubai particularly, the Centre for the Amicable Settlement of Disputes exists since 2009. If the dispute’s claim is under AED100,000, it is most likely to be handled by the Centre. The Centre aims is to seek a settlement between the involved parties to avoid litigation.

What to do when a business dispute happens?

The best thing to do when having a business dispute is to resolve the problem as soon as possible. The main goal here is to avoid going to court as much as possible and to keep the dispute at its minimum level. Try to negotiate with the other party and find a win-win solution to your problem. To know more about how to handle a dispute, you can visit a law office.

If the dispute is serious enough and you have to proceed with a higher level of dispute resolution, then it is time to take a more aggressive approach.

Gather as much evidence as possible. Take note of the people involved and how you can use them as witnesses. Extract evidence from various resources. Take note that the UAE law favors documentary and written proof over oral testimonies.

Finally, you will be more successful in dealing with business disputes when you hire an expert commercial lawyer in Dubai from Motei & Associates. They have been helping clients win their disputes since 2002. 

Why Setup Free Zone Business in UAE

Are you starting a business setup in UAE? If yes, then you need to consider setting up a free zone business.

Free Trade Zones (FTZ) or simply free zones are special economic areas in Dubai. There are currently more than 30 free zones in the country and are home to more than 150,000 companies. The free zones were established with the aim to attract more foreign investors and to ensure the continuous growth of Dubai’s economy.

So, the big question now is, “Why should you choose the free zone of Dubai?” Here are some reasons you should know about.

Tax exemption

Perhaps this is among the most attractive feature of the free zone business. Considering the chunk of money that goes to taxes, most businesses now are seeking shelter within the free zone. Selected free zone business enjoys complete income and export and import tax exemption.

100% business ownership

Most countries would require local businesses to be owned by its citizens. For foreigners, they would need sponsors to be able to own their company. However, this is not the case in UAE’s free zones.

If you establish a business in one of the UAE’s free zones, you can own your business completely and there is no need to get a sponsor. According to some business consultants in Dubai, they consider this to be the biggest advantage of a free zone.

Generally, people can only start a company in the UAE if 51 percent of the company’s share is owned by an Emirati national. However, this is not the case in free zones. The company can fully owned by a foreigner or companies outside of the UAE.

Innovative free zone infrastructure

If you have been to one of the free zones in Dubai, you would immediately conclude that the area is designed to help businesses grow and thrive. The infrastructure around and within free zones include innovative buildings, wide roads, communication systems, and other important amenities needed to create the best possible environment for your businesses.

Easier application for residency visas

Outside of the free zone, foreigners have to go through stringent visa. However, shareholders, company owners, and employees within a free trade zone follow a special and unique residency law. For example, if you leave a free zone company before completing two years of your contract, your employee cannot place a six-month ban on you, which is something applicable to employees outside of the free zone.

To get more familiar with the labor laws, you may want to look for professional legal advocates in Dubai.

Starting your free zone business

Now that you know some of the most important reasons why you should choose one of UAE’s free zones, it is time for you to get more familiar with the legalities. Aside from seeking legal services in Dubai, you should also speak to one of the experienced and knowledgeable legal advisors of Motei & Associates. They have the right expertise to guide you through the process of starting a free zone business. 

Difference Between LLC and Sole Establishment in Dubai

There are two ways you can establish a business in Dubai. You can either choose Limited Liability Company (LLC) or sole proprietorship. Of course, before you make a decision, it would be a good idea to learn the difference between the two. Better yet, seek the help of a commercial lawyer in Dubai to ensure you cover all the bases when you start your business. 

So, here are the differences between LLC and sole establishment or sole proprietorship in terms of ownership, control, budget, liability, and existence.

Ownership

Obviously, a business that is established under the sole proprietorship scheme is owned by one person. On the other hand, LLC can be owned by multiple people or shareholders. In some cases, it can also be owned by foreign businesses, partnerships, corporations, and even other LLC entities. Dubai law firms can help you establish your business.

Control

Sole proprietors can enjoy having a full control of their business. Whatever you want to do with your business, you can do it without seeking approval from other shareholders.

For LLCs, it could be an advantage to have other people who can share their ideas. Managing a company can be complicated but with the help of multiple people who owns the business, the best course of action is explored.

Budget

It is costlier to set up an LLC in Dubai. For example, if you are going to apply for a business license, you can expect to spend around AED 17,000 (as of 2018). However, if you’re seeking to establish an LLC business, the fee can increase by as much as 30% or more. Seek the help of one of the law firms in Dubai to meet legal requirements.

While it is easier to start a sole establishment business, it is harder to sustain this business model and even raising money for the business is more challenging. With LLC, there are more people who are contributing to the company and thus, expanding your business is more attainable.

Liability

There’s a reason why LLC is called a limited liability company. A sole owner of a business can be liable for lawsuits, debts, and other obligations. So, if your business goes bankrupt, creditors may go after your other possessions.

This is not the case for LLC. Liabilities are distributed throughout the shareholders. Creditors can’t even confiscate personal properties.

When things get more difficult, you might consider hiring an experienced attorney in Dubai.

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How to Resolve a Labor Dispute in Dubai

The least among the things you want to happen is for a dispute to arise between an employer and employee. When things get out of hand, it would be good to know how to resolve labor disputes in Dubai – fast and cost-effective. Thankfully, you can always hire some of the best lawyers in Dubai, UAE.

The best way for you to patch things up between two parties is to have even some of the basic knowledge of the UAE Labour Law. Ignorance of the law would simply lead to a lot of problems both now and the future. Thus, you need to know the labor law even before signing any document.

For example, get familiar with the different laws governing public and private employees and domestic workers. Knowing which UAE employment law applies to you allows you to ensure you are not violating anyone’s right. A good piece of advice is for you to take some time reading a summary of the Labour Law.

Before exploring how to file a case in labour court in Dubai, it is always best to talk things out first. If you can come to an agreement within the personal level, a great amount of resources and energy is saved.

Now, if labor dispute isn’t avoidable, there are a few steps that you should take.

According to the Article 6 of the Labour Law, both the employee and employer has the right to file a dispute with the labour department. The same department will then summon the concerned parties and seek a resolution to the conflict. At this point, it would be helpful if you seek the right legal services in Dubai to guide you through the dispute process. 

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