The Legal Mistakes Costing People Money in Dubai

This episode of the Dubai Stars Podcast went legal. My guest is Amin, a lawyer who was born and raised in the UAE, whose family has a business here in immigration work, company setup and visas, and who did his law school in France before coming back. He said he came back because Europe is a good place for safety of work, but not a place where you grow exponentially.

The one idea behind the whole conversation is simple. Most problems people bring to a lawyer in Dubai are not accidents. They are the predictable result of a contract nobody read, a business model with no cushion under it, or a setup chosen by someone who earned a commission on it. Amin's line for this was the cleanest thing in the episode: come before you get sick.

In this episode

0:35 Meet Amin: from law school in France back to the UAE

3:57 Can you exit an MOU using force majeure?

5:30 Subleasing: the million dollar lesson and 1.5m in penalties

16:38 Rumours versus official sources: WAM, NCEMA, MOI, DLD

29:37 Early exit from a five year office lease

31:49 If a tenant does not pay, what actually happens

35:44 Corporate tax, VAT thresholds and fines

37:35 Free zone versus mainland and why agents push one

Force majeure is not an exit door you can use whenever it suits you

A lot of people wanted to know the same thing. They signed an MOU with a 45 or 60 day transfer window, then circumstances changed, and they wanted out without losing the 10 percent cheque. Amin's answer was no. His explanation was that force majeure only applies when there is actual impossibility to continue the contract. If power of attorney still works, governmental systems still work, institutions still work and people are still going to work, then nothing is impossible.

I pushed on the harder version of that question. What about someone who was put on forced unpaid leave, or laid off because the owner shut the business down? Amin said not possible. His reasoning: you could have lost your job for non-performance, so this is something you should have predicted before the purchase. In his view it does not cover it at all.

The practical takeaway is that your personal circumstances changing is not the same as performance becoming impossible. Read your exit clause before you sign, not after. If you want to know what you actually owe, get it calculated by someone whose job is contracts.

Subleasing looks like a business until the ground moves

This was the most personal part of the episode. Amin used to be in the sublease business before Covid. He said he got screwed, a bit more than a million dollars, and that it became his biggest lesson. His conclusion was blunt: he will never sublease again even if he would do 200 percent.

I made a video about this model when it was at peak euphoria, and I said the same thing. You cannot predict the future. You could get sick. Your system could fall apart. There are a hundred things that can take the profit away from you, and losing the profit does not remove what you owe the landlords. Some well known people doing that model reposted my video and made fun of it. I did not reply.

Amin then gave a live example. Two weeks before we recorded he sat with a client who came to him as soon as things started happening and asked what he would owe if the situation worsened. The client had around 30 contracts. Going through notice periods and penalties one by one, Amin calculated roughly 1.5 million just in penalties, before licence cancellation, employees and everything else. Amin said he gave him the legal ways to handle it, including how to negotiate and possibly delay payments, but that he does not recommend the model.

His fix, if someone insists on doing it, is to build ground that is not the sublease itself. Take the yearly cheque, keep the money aside like a bank in your house, reduce the sublease exposure, and only spend the surplus. My own version of the same principle: I would never take a mortgage unless I was guaranteed to cover the payment even if I was sick in bed.

Verify before you repeat: only official sources count

A big part of the episode was about noise. Amin described how Emirates and flydubai listings, exception conditions and customer service answers all had to be checked directly, and said he timestamped his own posts so people knew exactly when he checked. On property, I mentioned Iranians I spoke to who completed transactions, and brokers who said some properties were blocked for a few days and then released. Amin's point was not to jump to conclusions, because the decision comes from the government, then to authorities, then to employees, then to an agent, then a client, then a friend. By the time it reaches you it is the Chinese whisper game.

He also made a fair point about intent. The person passing bad information often has no bad intention. They are passing on their own understanding of something they are not qualified to read, and the legal consequences get dropped along the way.

When I asked which sources to actually follow, he named WAM, NCEMA, the Ministry of Interior and DLD. His practical advice was to follow them on all platforms, because an update sometimes appears on one and not the other, and he finds X the better feed for the latest because you can sort by time. On Instagram you refresh and something from three weeks ago pops up looking like news.

On the one billion relief announced by the crown prince, Amin was honest about the limits of what he knew. He said he only saw the news itself and did not go deep into what qualifies, and that as per his understanding it works through removing fees rather than handing out cash. That is worth remembering as a model for how to talk about policy you have not verified.

A tenancy case is a process, not a jail sentence

I asked him directly: if a tenant does not pay what they owe, do they end up in jail? He said not immediately, not directly, and not in every case. Then he walked the steps. The landlord, manager, agent or lawyer files the case, it goes to the Rental Dispute Centre, there is a first hearing, there may be an appeal, and a conclusion is reached on the amount owed. He also mentioned that a request can be made for a travel ban.

The point where it changes character is the promise. Amin said if the tenant signs a promise and a payment plan and then does not pay, you are possibly going to be put in a criminal situation, because you are now defrauding not only the landlord but your own promises made with the court. A delayed month or a cheque that bounced for a wrong signature is a different thing. He noted commercial cheques are treated differently, and that sole proprietorships and partnerships create their own nuances, including the unfairness of a partner committing something criminal without the other knowing.

He also said a judge can take circumstances into account. He used the French term for the appreciation of the judge: they look at the situation, do their own calculations based on ratios and percentages, and rule. So a tenant who paid on time until a documented salary deduction is not in the same position as one who never intended to pay.

Amin repeated the disclaimer that matters more than any single answer. These questions depend on a very specific case by case basis, the smallest detail changes the outcome, and you should never rely on legal answers that were not directed at you as a person.

Free zone versus mainland is a decision about your end goal, not a package price

Amin said VAT, corporate tax and adjustments are his bread and butter and about 90 percent of his clients work with him on that. He laid out the numbers as he knows them: 375,000 net profit is the corporate tax threshold, with 9 percent applying on the surplus above it. For VAT he said 187,000 revenue is voluntary registration and above 375,000 revenue registration is mandatory, with a window he put at roughly 10 to 14 days, and fines if you miss it. Those are figures worth confirming with the FTA before you act on them.

On structure, he said the UAE has 40 plus free zones and the choice depends on your end goal. Selling to mainland from a free zone is not possible by law, though he said a law introduced roughly a year to a year and a half ago allows an exception where the same person owns both a free zone and a mainland company, with big regulations and very specific conditions. His example was that a company buying and selling real estate cannot sit in a free zone. It must be mainland.

Then he explained the incentive problem, which I think is the most useful part of this section. Setup agents advertise free zone because they have a partnership with the free zone and take a referral. Mainland costs are clear and there is no kickback, so they can only add a service charge. That is why free zone gets pushed, even when mainland is the right answer. And because ChatGPT is a language model that summarises whatever is out there, if the source material is written by those same agents, you get the same bias back in a confident voice.

He gave a case to show what the wrong structure can cost. A client wanted to buy and sell vapes, set up in a free zone, shipped and then started importing inside. When criminals stole the goods, they assumed he would never report it. He did report it, and it became a case with public prosecution. Amin's summary: all from the wrong free zone.

Go to the lawyer before the problem, not after

Amin's comparison was that lawyers and doctors get lumped together, but people go to a doctor once they are already sick. He asked people not to do that with a lawyer. His words were come before you get sick, and he described himself as mostly a therapist, not a doctor. The biggest mistakes he sees are people who set up in the wrong way, or who think they can do it themselves off information from ChatGPT.

We also talked about why people do not reach out. My view is that most lawyers are invisible. You find a website, a chatbot, you send an inquiry and you never know if you will be called. Most people also do not know that lawyers specialise into civil, criminal, corporate and divorce. So they go to the first PRO they find, who says leave it to me, give me 30,000, consider it done. Amin added a point about incentives that I liked: once a setup agent registers your company, there is no more profit for him and he cannot guide you legally. A lawyer who guides you well grows with you, so your interests are aligned.

His golden advice at the end was short. If you are thinking of doing something and you are doubting whether it is going to be okay, it probably is not, so speak to a lawyer. Compare the cost of a consultation to the cost of 1.5 million in penalties or a criminal file, and the maths answers itself.

Watch the full episode for the detail behind each of these answers, including the tenancy process step by step and the free zone versus mainland explanation. And if you want to talk through a Dubai real estate decision before you sign anything, reach out to me. I am always happy to have the conversation.

Worth hearing in full

"CO taught me such a big lesson. Then I was like, I'll never sublease even if I will do 200% losses" (6:02)

"Force majeure only applies when there's actual impossibility to withhold and not continue the contract." (4:25)

"You are possibly going to be put in a criminal situation because you're now frauding not only the landlord, you're frauding your own promises that you made with the court" (32:53)

"If the source of information is wrong, it's going to give you wrong BS in return as well." (40:06)

"If you think of doing something and you're doubting whether it's going to be okay or not, it's probably not and speak to a lawyer." (43:11)

Watch the full episode on YouTube, and find Anthony's books and more at anthonyjoseph.com.