Saturday, May 11, 2013
Dubai: Virtual office practices are illegal and the Department of Economic Development in Dubai fined 60 offices last year and warned business communities to seek this option in order to run any business activities in the emirate, Mohammad Shael Al Sa’adi, CEO Business Registration and Licensing of the Department for Economic Development in Dubai (DED), told Gulf News.
“There is no law allowing the setting up of a virtual office to operate any business activities. This will not be even allowed in the new version of the UAE companies’ law.”
The law does not allow free zone companies to set up a virtual office outside the free zones, and those businesses who violate the rules and regulations and will be liable to heavy fines, he added.
However, he added that only foreign companies are allowed to use the logistic and communication services of virtual offices inside the UAE but without engaging in any commercial activities.
Al Sa’adi said that some of the business centres in Dubai were found violating the rule by leasing virtual offices for a small annual amount.
Several business centres were found promoting the concept of virtual offices at a low cost offering services such as communication, fax, secretary, reception, post office.
Difficult to monitor
Omar Bu Shahab, CEO of the Commercial Compliance and Consumer Protection Division at the DED, said that the department fined 60 virtual offices in Dubai last year for running commercial businesses without permission.
He added: “Watching over these virtual offices across the emirate is a very difficult and complicated procedure.”
Virtual offices are illegal in Dubai as it is very difficult to control and monitor their business activities, he added.
DED has fined a number of businesses who set up virtual offices up to Dh20,000.
Running a business via virtual office might lead to violation of consumer protection law which will be out of DED control.
“Having a physical office is one way to protect consumer right as we can have regular inspection visits to these companies.”
DED called upon consumers not to deal with any business that have no actual existence in the market as it is very difficult to trace in case of filing any complaint against this business.
A recent report showed that the demand for virtual offices across Dubai has increased by 15 per cent in 2011, compared to 2010.
The increase in the number of people trying to run virtual offices shows that business owners want to run their activities with less cost, according to the report.
By Zaher Bitar Senior Repoter
Gulf News 2013. All rights reserved.
