Dubai is one of the most popular tourist destinations in the world. This Emirate is an important hub for trade and commerce, with a booming economy that attracts people from all over the globe. A staggering 81% of Dubai’s population are foreign-born residents, so it is unsurprising that there are many different cultures living here side by side. These diverse cultures have led to some unique business practices in this part of the world which you may want to take into account when starting up your own company.
In particular, if you plan on setting up a business in Dubai it will be necessary to understand how contracts work as well as hierarchies within organizations – both essential factors when doing business abroad! Read more below about what these cultural differences mean for your business.
Business Contracts in Dubai
If you are looking to do a Business setup in Dubai Freezone, or even just enter into a rental agreement for an apartment there, it is vital that you understand how contracts work so that any issues can be resolved by the courts. The UAE has developed its own form of law which includes standards not usually found in other countries – such as Sharia law. However, the principles of English law are still applied and you can refer to laws from Great Britain if there is any dispute between parties.
The main difference between contracts in Dubai and those in the UK is that joint or several liabilities applies. This means that all signatories to a contract will be held accountable for any wrongdoings, rather than just the original party who commits an offense. For example, if you are entering into a contract with someone in Dubai and they fail to uphold their side of the agreement, you will be legally obligated to fulfill your side as well. This is part of how UAE law encourages transparency between companies.
Another difference is that a contract is a legally binding document. If a party decides not to fulfill its contractual obligation, they will be held responsible by the courts and will have to pay damages to the other party involved.
The seniority of staff in Dubai organizations
In most Western countries, everyone has an equal level of responsibility regardless of their age or position within a company. In Dubai, different staff has varying levels of seniority and it is important to know how the hierarchy works before setting up a business in Dubai here.
When a company first sets up in Dubai, the employer should choose what level of seniority they would like for each member of staff – these can either be Junior, Senior or Executive grades. This should be done in conjunction with the Human Resources Department of the company to make sure that they choose the right level.
The ranking of employees will affect their employment benefits and responsibilities, particularly for things like pension contributions and how much medical insurance is required. Sometimes companies may want to classify an employee as Senior or Executive without increasing their salary or benefits, but just changing their rank. This is not always allowed by law and it is best to check with the Human Resources department before making such a decision.
The Emiri Decree and the role of Minister in UAE
In UAE, every Emirate has its own minister (or minister of state) and these ministers all work together under the direction of the President. The Emiri Decree is passed by the President and outlines all policies for each Minister to follow. These decrees are legally binding documents that must be obeyed by all UAE citizens, so even if you are not Emirati it is important to know what they say.
For example, the Health Ministry has the power to regulate health care within Dubai, including how all hospitals and medical facilities should be set up.
All major changes to the Emiri Decree come into effect after they are published in newspapers, although smaller amendments may just be announced verbally. You can find many of these documents on the internet so it is worth searching through them if you are planning to start a business here…
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