Scams in buying or selling a business in Dubai and the wider UAE are rarely clever.
- A seller overstates revenue, hides debts, or sells something they don’t fully control.
- A “buyer” asks you for fees or fishes for your data.
- Money moves before ownership changes on the official record.
- Check every licence on the government register yourself.
- Pay only into escrow or a company account, against signed terms.
- Release sensitive data in stages, and only to people you’ve verified.
Below are ten patterns, the check that stops each one, and a safe order for moving money and documents. For the full checklist, see our buyer due diligence guide.
Red-flag phrases to watch for
| What they say | What it usually means |
|---|---|
| “Another buyer is ready to pay today.” | Pressure to skip your checks. |
| “Send the deposit to my personal account; the company account is being updated.” | The money may never reach the company, or the company isn’t theirs to sell. |
| “My partner is only on paper.” | Someone else legally controls the shares. |
| “Most sales are cash, so the books understate it.” | Revenue you can’t verify. |
| “Here’s the licence on WhatsApp.” | A screenshot proves nothing. Look it up yourself. |
| “We just need a refundable due diligence fee from you.” (to a seller) | Advance-fee scam. Real buyers pay their own advisers. |
| “Send the full financials first, we’ll sign the NDA later.” | Data fishing. |
| “We’ll pay the balance in post-dated cheques.” | A bounced cheque is now mainly a civil debt to chase in court. |
How buyers get scammed in UAE business deals
01The business, or its licence, isn’t real
Forged trade licences get passed around as PDFs and screenshots. In one Dubai case reported by Gulf News, a man sent an investor a forged licence over WhatsApp for a petrol services company that didn’t exist. He took money for “renewing the licence before a sale”, then stopped answering. In court he admitted the fraud.
Never rely on a licence someone sends you. Look it up yourself:
Confirm the licence is active and that its activity matches the business you’re buying.
02The seller doesn’t control all the shares
A company with several shareholders needs every one of them to sign the transfer. A seller who “speaks for” a silent partner may not have that authority, and the deal can unwind later.
Get the current memorandum of association (MOA) listing every shareholder and their stake. Every shareholder signs in person, or through a notarised power of attorney you have verified. Match each name to a passport. Pay the bulk of the price only after the licence or MOA shows your name: in most cases, shares don’t legally transfer until then.
03The nominee arrangement
Before 2021, most mainland companies needed a 51% Emirati shareholder, and many foreign operators held their stake through side agreements. A 2021 reform allowed full foreign ownership of mainland companies for most activities, but many older businesses never restructured. The person on the register is the legal owner. If the seller’s control rests on a side letter, you’re buying a potential dispute.
Ask in writing who the legal and beneficial owners are. If there’s a nominee, make restructuring to direct ownership a condition of completion. More in our licensing and transfer guide.
04Revenue that only exists in the POS
Cash-heavy businesses like cafés, salons and laundries are where numbers get padded. A POS report is easy to edit. Bank deposits and VAT returns are much harder to fake.
Put 12 to 24 months of these side by side:
- POS totals
- Bank statements
- Delivery-app payout statements
- VAT returns
If the seller says “a lot of it is cash”, price the business only on what can be proven. Our valuation guide explains why.
05Debts that come with the company
In a share sale, you buy the company’s history: unpaid rent, supplier balances, bank facilities, pending cases and staff entitlements. Staff contracts don’t end at a sale. Under Article 48 of the labour law, they stay valid, and the new employer becomes responsible from the date the company’s records are amended. That includes years of accrued gratuity, often the largest item nobody mentions. See how gratuity transfers when a company is sold.
- A signed schedule of every liability
- Warranties in the sale agreement that the schedule is complete
- Part of the price held back for 6 to 12 months
06The lease that won’t transfer
A restaurant’s fit-out is worth little if the landlord won’t accept a new owner, or if the lease has eight months left.
Before you sign anything binding, get the tenancy contract, confirm the remaining term, and get the landlord’s written consent to the change of ownership.
07The “broker” who wants a holding deposit
Someone shares a listing they have no mandate for and asks for a refundable deposit “to stop other buyers”. The refund never arrives.
Ask for the owner’s written mandate and the broker’s own trade licence. Pay deposits only against signed terms, into escrow or the selling company’s account. Never into a personal account.
How sellers get scammed
08The buyer who needs you to pay first
A “fund” or “investor” seems keen, then asks you to cover a valuation report, a due diligence fee or a “compliance certificate”. Serious buyers pay for their own diligence.
You never pay someone to buy your business.
09The buyer who only wants your data
A competitor poses as a buyer to collect your supplier list, margins and staff salaries. Nothing illegal happens, and you’ve still lost.
- Anonymous teaser
- NDA
- Identity and proof of funds
- Summary financials
- Full data room, only when an offer is close
10Payment that bounces
Selling for a deposit plus post-dated cheques for the balance is common, and riskier than it used to be. Since 2 January 2023, a cheque that bounces for lack of funds is generally a civil debt, not an automatic criminal case. You can enforce it through the courts, but the old deterrent is gone.
Don’t transfer the licence or shares until the money has cleared or sits in escrow.
A safe order for money and documents
The 10-minute verification table
| Check | Where | Red flag |
|---|---|---|
| Licence is real and active | DET (Dubai), ADDED (Abu Dhabi), or the free zone authority | Expired, not found, or names don’t match |
| Every shareholder is selling | Current MOA vs passports | “My partner is only on paper” |
| Revenue is real | Bank statements, VAT returns, app payouts | “Most of it is cash” |
| Liabilities are listed | Signed schedule + warranties | Seller won’t sign a schedule |
| Lease can transfer | Tenancy contract + landlord consent | Short term left, no consent letter |
| Broker is authorised | Written mandate + broker’s licence | Deposit to a personal account |
| Buyer is real | ID + proof of funds before the data room | Asks you to pay a fee |
What to do if you’ve been scammed in a UAE business deal
Bring in a UAE lawyer early. Evidence and speed matter.
Common questions
Is it safe to buy a business in Dubai?
It can be, if you verify ownership, revenue and liabilities yourself and pay through escrow or company accounts. The risk comes from skipping checks to move fast.
How do I check a trade licence in Dubai?
Search the Department of Economy and Tourism’s licence records by company name or licence number. Free zone companies are checked with the free zone authority that issued the licence.
Can I trust a trade licence someone sends me on WhatsApp?
No. A PDF or screenshot can be forged. Look the licence up yourself on the issuing authority’s website.
Should I pay a deposit to reserve a business?
Only against signed terms, into escrow or the company’s account, and refundable on clear conditions. Never into a personal account.
Is a bounced cheque still a crime in the UAE?
Not for insufficient funds alone since 2 January 2023; it is enforced as a civil debt. Fraud and bad-faith conduct involving cheques can still be criminal.
How do I know a buyer is serious?
They identify themselves, show proof of funds, sign an NDA before seeing financials, and pay for their own advisers.
- 01u.ae: Full foreign ownership of commercial companies
- 02Gulf News: Man fakes business licence, asks investor for Dh370,000
- 03Gulf News: Father and son jailed over Dh8 million supplier scam
- 04Gulf News: Article 48 and change of ownership
- 05Legal 500: Cheque bounce and debt recovery in the UAE
- 06Gulf News: How to act on a bounced cheque
- 07Khaleej Times: Dubai trade licence verification
- 08Khaleej Times: Reporting online scams in the UAE
- 09Dubai Police eCrime
- 10The National, Dubai court report on a sponsor’s alleged forged share sale
- 11Pinsent Masons (Out-Law), guide to UAE corporate acquisitions
This article is general information, not legal advice. Check your deal with a UAE-qualified lawyer.
