Business Setup Scams in Dubai: How to Avoid Getting Burnt

Rajinder Singh Nagiyal

December 15, 2025

Accounting

Business Setup Scams in Dubai: How to Avoid Getting Burnt

Dubai’s reputation as a global business hotspot has attracted thousands of entrepreneurs and investors eager to launch new ventures in the UAE. But with opportunity comes risk—particularly for those unfamiliar with the local landscape. Business setup scams in Dubai are on the rise, targeting expats and first-time business owners with promises of quick licences, guaranteed approvals, and “all-inclusive” packages.

This article exposes the most common scams, the red flags to watch for, and the steps you must take to protect your investment. If you’re considering company setup in Dubai, read on to learn how to avoid getting scammed and ensure your business journey starts on solid ground.

What Are the Most Common Business Setup Scams in Dubai?

Dubai’s booming business environment has unfortunately made it a magnet for scam artists and fake agents. The most common scams include:

Fake Agents and Unlicensed Consultants: Many scammers pose as legitimate business setup agents or consultants, promising fast-track company formation, visa processing, or trade license approvals. They often operate without a valid agency licence and may disappear after collecting fees, leaving business owners in legal limbo.
False License Promises and Forged Documents: Some fraudsters issue fake trade licences, visas, or company registration documents. Victims only discover the fraud when they try to open a bank account, apply for a visa, or conduct business—only to find their company isn’t registered or their documents are worthless.
Ghost Offices and Virtual Addresses: Another common scam involves agents offering “prestigious” office addresses or ghost offices that don’t exist. This is especially prevalent in free zone company setups, where a physical office is often required for licence approval. Victims may find that their company is registered at a fake address, putting them at risk of licence cancellation and legal trouble.
Overcharging and Hidden Fees: Some consultants lure clients with low upfront costs, then add hidden charges for government fees, PRO services, or “urgent” approvals. Others promise “all-inclusive” packages that turn out to be incomplete or only cover a freelancer permit rather than a full business licence.
Local Sponsor and Shareholder Fraud: For mainland company setup, scammers may pose as local sponsors or partners, demanding unfair profit shares or control after the company is formed. In some cases, they may not even be legally authorised to act as a sponsor, putting the business at risk of closure.

How Do Scammers Target Expats and First-Time Entrepreneurs?

Expats and first-time business owners are prime targets for business setup scams in Dubai. Here’s how fraudsters exploit them:

Exploiting Lack of Local Knowledge: Newcomers to Dubai often don’t know the difference between a legitimate agency and a fake one. Scammers use this to their advantage, offering to “take care of everything” and using impressive-sounding terms like “government-approved” or “exclusive agent”.
Playing on Urgency and Fear: Fraudsters know that many entrepreneurs are eager to get started quickly. They create a sense of urgency, claiming that licences are running out, fees are about to increase, or approvals will be delayed unless you act now. This pressure tactic often leads people to skip due diligence and hand over money without proper checks.
Using Digital Channels and Social Media: Many scams begin with slick websites, WhatsApp messages, or social media ads promising fast, cheap business setup. Fake agents may use spoofed UAE phone numbers, digital signatures, and even forged government portals to appear legitimate.
Targeting Non-Arabic Speakers and Remote Investors: Expats who don’t speak Arabic or who are setting up a company from abroad are especially vulnerable. Scammers may provide fake translations, misrepresent legal requirements, or claim to have “special connections” with licensing authorities in Dubai, Abu Dhabi, or popular free zones.

What Red Flags Should You Watch For During Registration or License Application?

Spotting the warning signs early can save you from falling into a business setup scam. Here are the biggest red flags:

No Physical Office or Refusal to Meet in Person: A real agency or consultant in Dubai will have a registered office you can visit. If the agent avoids giving you an address, insists on WhatsApp-only communication, or refuses to meet, be cautious.
No Trade License or Company Registration: Legitimate agencies must provide a valid UAE trade licence and company registration details. If they refuse to show these documents or use fake company names, walk away.
Requests for Payment to a Personal Bank Account: Never transfer funds to a personal bank account or accept handwritten receipts. All payments should go to a company bank account with proper invoicing.
Vague or Hidden Pricing: If the fee structure is unclear, keeps changing, or is “too good to be true”, it probably is. Watch for hidden charges or promises of “all-inclusive” packages that don’t specify what’s included.
Unrealistic Promises and “Guaranteed” Approvals: No agent can guarantee instant licence approval, visa processing, or government approvals. Be wary of anyone who claims they can “guarantee” results or bypass official procedures.
No Official Documentation or Receipts: A legitimate consultant will provide official documentation for every step—trade licence, visa, company registration, and government receipts. If you don’t receive these, you may be dealing with a scammer.

Checklist: What Documents and Licences Should a Legitimate Consultant Provide?

Before you hand over any money or sign any agreement, make sure your business setup consultant provides the following:

Valid UAE Trade License: Proves the agency is legally registered and authorised to provide business setup services.
Company Registration Certificate: Confirms the agency’s legal status and registration with the Department of Economic Development (DED) or relevant free zone authority.
Detailed Service Agreement: Outlines the full scope of services, fees, timelines, and refund policy.
Official Receipts and Invoices: Every payment should be documented with an official receipt from the agency’s company bank account.
Government Approval Documents: Copies of all approvals, including initial approval, trade licence, and visa processing documents.
Proof of Office Address: A real, visitable office location in Dubai or the relevant emirate.
Bank Account Details: Ensure all payments go to a corporate bank account, not a personal one.
Contact Details: Landline, office address, and an official email—not just a mobile number or WhatsApp.

Tip: Always keep copies of every document and receipt for your records. If anything seems off, verify the agency’s details with the relevant authority before proceeding.

How Can You Verify Licensing Authorities Like DED, Free Zones, and FTA?

Verifying the legitimacy of your business setup is essential. Here’s how you can check your agent’s and your company’s status:

Dubai Department of Economic Development (DED): Visit the DED’s official website and use the “Search License ”Information”—portal. Enter the company’s trade name or license number to check if the agency is registered and in good standing. The portal will show the licence status, expiry date, and authorised activities.
Free Zone Authorities: Each free zone in the UAE (e.g., DMCC, Dubai Airport Free Zone, Abu Dhabi Global Market) has its own online portal for verifying licenses. Enter the company name or license number to confirm registration and validity. Be cautious if the agent can’t specify which free zone your company will be registered in, or if you can’t find your company listed on the official portal.²⁸.
Federal Tax Authority (FTA): For VAT registration and tax compliance, check the FTA’s official website. You can verify your company’s tax registration number and compliance status. Beware of agents who promise to “handle your tax” without providing official FTA documentation.
Ministry of Economy and Other Authorities: For certain business activities, you may need additional approvals from the Ministry of Economy, Ministry of Interior, or industry-specific regulators. Always check that your consultant provides all required approvals and certificates.
Google and Public Reviews: Search for the agency’s name, licence number, and reviews online. Look for complaints, fraud alerts, or negative feedback from other business owners. If you find multiple complaints or unresolved issues, consider it a major red flag.

How Does RSN Finance Ensure a Legal and Transparent Setup Process?

RSN Finance is a trusted name in business setup in Dubai and the UAE, known for its transparent, legal, and client-focused approach.

RSN Finance holds a valid UAE trade licence and is registered with the relevant authorities. Clients can visit their physical office in Business Bay, Dubai, to meet with consultants and review documentation in person. RSN Finance also provides detailed service agreements that outline all fees, timelines, and deliverables. There are no hidden charges or vague promises—every step is documented and explained before you commit.

From trade licence application to visa processing and tax registration, RSN Finance handles every step with official documentation and government receipts. Clients receive copies of every approval, licence, and certificate, ensuring full transparency and legal compliance.

RSN Finance verifies every client’s company registration with the DED, free zone authorities, and FTA. They guide clients through the process of checking licence validity, bank account setup, and compliance with UAE regulations.

Unlike shady agents who disappear after collecting fees, RSN Finance offers ongoing support, regulatory updates, and business advice long after your company is established. Their goal is to build trust and long-term relationships with every client.

Consult with Our Vetted Advisors Before You Commit

Don’t let your Dubai business dreams turn into a nightmare. Before you invest, sign, or transfer any funds, consult with RSN Finance’s vetted advisors. We’ll review your business plan, verify all documents, and ensure you’re dealing with a legitimate agency. Protect your investment and start your business journey in Dubai with confidence and peace of mind.

Frequently Asked Questions

What are the most common business setup scams in Dubai?

The most common scams include fake agents, forged licences, ghost offices, and overcharging for government services. Always check the agent’s trade licence, office address, and payment methods before proceeding.

How can I spot red flags during the business setup process?

Red flags include no physical office, refusal to provide a trade licence, requests for payment to a personal bank account, vague pricing, and promises that sound too good to be true. Always demand official documentation and receipts.

What documents should a legitimate business setup consultant provide?

A legitimate consultant should provide a valid UAE trade licence, company registration certificate, detailed service agreement, official receipts, government approval documents, proof of office address, and corporate bank account details.

How do I verify a business setup agency’s licence in Dubai?

You can verify an agency’s licence through the DED’s official website or the relevant free zone authority’s portal. Enter the company’s trade name or license number to check registration status and validity.

What should I do if I suspect I’ve been scammed during company setup in Dubai?

Report the issue to the Dubai Department of Economic Development, free zone authority, or the police. Keep all documentation, receipts, and communication as evidence. You can also seek legal advice or file a complaint through official government portals.

How does RSN Finance protect clients from business setup scams?

RSN Finance is fully licensed, provides transparent agreements, handles all documentation, and verifies every step with government authorities. Clients can visit their office and receive ongoing support to ensure legal and compliant company setup.

Why is it important to consult vetted advisors before starting a business setup in Dubai?

Consulting vetted advisors ensures you avoid scams, receive accurate guidance, and protect your investment. Experienced consultants like RSN Finance help you navigate the process legally, verify all documents, and provide peace of mind throughout your business journey.

Looking for an expert corporate tax consultant in Dubai?

Let our experienced team guide you through every step of UAE corporate tax compliance.

Book your consultation now

The FTA can freeze your business bank accounts to recover unpaid VAT, making it impossible to pay suppliers, staff, or other obligations.

Have Any Questions?

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Business Setup Scams in Dubai: How to Avoid Getting Burnt