Some of you may know that in order to get a business license in Dubai, whether it is a freezone or a local company, you need to have a rental agreement.
It becomes an interesting matter when paying for rental in advance forms the bulk of an
advance payment for the purchase of commercial real estate.
Being a legal adviser is not just about giving legal advice. It is also about exploring the
commerciality of decision making for business owners. One of the most important decisions to make is where to have an office and also whether to rent or to buy an office.
There are many options when it comes to offices, whether you take a serviced office (with
various facilities available and a readymade office) or a core and shell office which needs to be fully converted or developed into a usable office. As a commercial decision, this should not only include rent, but also other fees such as service fees or deposits which have to be paid in advance. These deposits can form large amounts and may end up being the difference between a yes or no. There may be security deposits, fit-out deposits or cooler deposits. Be sure to check with the real estate brokers whether your checks will be held as security or whether they will be cashed and then ‘refunded’.
The process involved in making these decisions can be enjoyable, but the approach must be detailed in nature and must also be focused. Seek assistance from a legal and business advisor where possible and ensure that these long term decisions are made correctly.