How to buy and how to sell a business in the UAE

0
438

The UAE provides opportunities for doing business in different spheres and this country is interesting for investments from around the world.

Doing business in the UAE has many advantages. For example:

1. Developed infrastructure. The country gives opportunities for opening a business of any price segment. Goods and services can also be targeted at different consumers.
2. Safety and Tolerance.
3. The lack of corruption.
4. A large number of free economic zones.
5. Uncomplicated taxation system.

The sale or acquisition of a business is a complex process that requires serious preparation and much time.

How to buy business in the UAE

When registering a business for the first time, entrepreneurs often make mistakes due to ignorance of local laws and a lack of understanding of cultural features. Therefore, it is a good option for a beginner to buy a ready-made company. At the moment, the market offers a large number of enterprises.

Advantages of such a purchase:

Earned customer base.
Established relations with suppliers.
Good reputation.

The buying process takes place according to the following algorithm:

1. Search for an enterprise.
2. Contact the seller.
3. Examination of corporate documents (legal expertise).
4. Economic expertise, which includes the analysis of all assets and liabilities, financial and accounting calculations, production capacity. As a result of this examination, one can judge the profitability of the company of interest.
5. Reputation verification (reputation in the business world and the reputation at the authorities of the emirate). In case of improper performance of the work and incorrect behavior with clients and suppliers, fines may be imposed on the enterprise, which will determine the attitude of others towards it.

How to sell a business in the UAE

Business owners may not be fully aware of the financial and legal complexities of the sale.

A significant role in the sale of business, in addition to the company’s management, is played by financial and legal consultants.

In most cases it is recommended to hire third-party specialists who have extensive experience in conducting similar transactions.

It is very important to execute a transaction properly and give an adequate assessment to the business.

Qualified consultants need to be hired from the beginning of presale preparation – financiers will supervise the whole process, assist in assessing the company and potential buyers, and lawyers will prepare a purchase agreement and all the necessary documentation so that the transaction fits within the framework of the legislation in force in the jurisdiction.

In the process of presale preparation, the buyer conducts a detailed audit of the company – its financial and operational status. If he discovers a serious discrepancy between the data received and the information provided by the seller, he may refuse the transaction. Therefore, it is critically important for the seller to conduct his own audit before entering into negotiations with the potential buyer and to eliminate the problems, if there are any.

Due diligence also helps in the preparation of legal and financial documents necessary for conducting a sale and purchase transaction: its results not only speed up the process, but also demonstrate to the potential buyer a competent organization and efficient operation of the company.

After the issue of the contract of sale, the seller is obliged to inform the bank about changes in the corporate structure, and also to make sure that the bank has received the documents of the new owner and the manager. In case the bank has not received a notification or it has not been sent, the bank has the right to call the former owner to clarify the details of the turnover of the company and its affairs as a whole.

So, selling a business is really a long and complicated process with a lot of nuances. Getting the right advice, adequate and timely planning are success factors for the seller, which will make the transaction faster and easier, and also let to sell the company at the best price.