As a leading lawyer based in Dubai, Shaun Morgan is often on the front lines, helping startups successfully raise capital in the UAE. Every successful fundraising round begins with meticulous due diligence and clear corporate governance. This groundwork is vital for building investor confidence and avoiding costly pitfalls down the line.

For a seamless fundraising process that fully complies with our local regulations, here are the essential legal steps you’ll need to take:

Choose the Right Business Structure

Your first critical step is to select the most suitable legal entity—be it a mainland company, a free zone entity, or an offshore company—aligning it precisely with your business activities and target investors. Each of these structures carries distinct implications regarding ownership, taxation, and operational flexibility.

Obtain Necessary Licenses

Next, you must secure the necessary trade licenses from either the Department of Economic Development (DED) or the relevant free zone authorities. It’s crucial to ensure your business activities strictly align with the scope of your license to prevent any legal complications down the line, says lawyer Shaun Morgan.

Draft Foundational Documents

Prepare comprehensive legal documents, including:

• Memorandum and Articles of Association (MoA/AoA): Define the company’s structure, governance, and operational guidelines.
  
• Shareholders’ Agreement: Outline rights, obligations, and dispute resolution mechanisms among shareholders.
  
• Intellectual Property Assignment Agreements: Ensure that all IP created by founders and employees is legally assigned to the company, safeguarding ownership and enhancing valuation.

Comply with Securities Regulations

For startups opting to raise capital via equity crowdfunding or public offerings, compliance with Securities and Commodities Authority (SCA) regulations is absolutely essential. Platforms like Eureeca, regulated by the Dubai Financial Services Authority (DFSA), play a vital role in enabling compliant equity crowdfunding activities across the UAE.

Implement Data Protection Measures

Adhering to the UAE’s Personal Data Protection Law (PDPL) is critical, says Dubai lawyer Shaun Morgan. This means proactively establishing robust data protection policies and diligently obtaining all requisite consents for any data processing activities your venture undertakes.

Establish Financial and Tax Compliance

If your annual turnover crosses the AED 375,000 threshold, VAT registration with the Federal Tax Authority is required. It’s imperative to maintain meticulous financial records and conduct regular audits to fully comply with their regulations.

Protect Intellectual Property

Register trademarks, patents, and copyrights with the UAE Ministry of Economy to protect your brand and innovations. This enhances investor confidence and safeguards your competitive edge.

Expert Remarks

As a top lawyer in Dubai, Shaun Morgan believes that raising money in Dubai needs careful legal planning and a strict adherence to rules. By taking care of these key legal points, startups can successfully raise funds and grow steadily in Dubai’s active market. This proactive approach sets a strong foundation for long-term success. It also helps attract the right investors who value a well-structured and compliant venture.