IS there a risk free way to create a startup?

Well, perhaps nothing in life is risk free. However, many budding entrepreneurs may be quite unaware that there is a way to minimize startup costs significantly however, in the Middle East, particularly in Bahrain and Dubai (the UAE).

By minimize, we mean start a legitimate business, or put a business idea into practice, with LIMITED CAPITAL REQUIREMENTS, LIMITED INVESTMENT, and LIMITED RISK and LIABILITY. The only costs a business person would have in this circumstance would be operational; the costs of putting their idea into action.

How is this possible?

Both the UAE and Bahrain have interesting commercial and contractual laws, related to the formation of new companies. Prior to investing in and forming a company, oftentimes a business person can put their idea into fruition by way of a Joint Venture or Agency agreement in Bahrain/Dubai, which is allowed under the Civil, Commercial, and Commercial Agency laws in effect.

Under the Law, a budding entrepreneur can begin experimenting with his idea, by appointing an agent or partner. Basically, they can find a locally residing individual or company, licensed to engage in the commercial activity they would like to partake in, and simply establish an Agency or Joint Venture contract with them.

However, in order to protect their rights, and minimize risk, the agency or joint venture agreement must be carefully drafted to ensure that it is in compliance with local laws, and covers all the necessary requirements of the principle/partner. These agreements should also specify the compensation to the principle/partner, whether on a fixed or commission basis, and the rights/obligations with respect to the management of the project.

What about Incorporating?

There are a number of incubators and office spaces in Dubai and Bahrain which allow startups to rent desks or office spaces. Cheaper commercial premises can be sought out to help entrepreneurs establish their entities independently and obtain visas for themselves and their staff. To register an entity, the Ministry of Industry and Commerce will require a registered office address. Through the incubator and startup programs available, incorporation can cost as little as USD $1500-$2000 in some cases, and through the use of specialized commercial premises, the registered office address can be obtained in this price as well. In addition, a company can invest as little as USD $1500 (or even less!) as capital in their new venture, in many cases.

There are a number of procedures and background checks of the corporate documents and investors which need to be completed prior to official registration with the Ministry. There will usually be some government fees to pay as well. However, once these procedures are cleared, the investor can go about their business freely.

So if this is something that could be of use to you, do get in touch and organize your free consultation with us today.