Almost nobody buys a business in Dubai by handing over the full price in one transfer.
Sellers expect it. Buyers assume it. Then the deal reaches the paperwork and the price splits into three or four pieces spread across several months, tied to things that have not happened yet.
That is not a negotiating trick. It exists because of a real gap in the process. The buyer pays before the licence is theirs, and the seller hands over before the money is fully received. Payment structure is how both sides survive that gap.
Here is how the pieces work.
The deposit
A deposit does one job. It takes the business off the market.
It is usually paid on signing the MOU. At BFS the deposit is held by us rather than by the seller, so neither side controls it while the process runs.
The important part is what happens if the deal fails. A deposit should be refundable when the transaction collapses for a reason outside the buyer's control, the obvious one being that the authority refuses the licence transfer. It should be forfeited if the buyer simply changes their mind.
If the MOU does not say which is which, the argument happens later, and it happens at the worst moment.
The payment on transfer
This is the main instalment, and in most Dubai deals it is the largest.
It is paid when the licence actually changes hands, not when the parties agree it will. Those two dates are frequently weeks apart, and the difference matters. Tying the payment to the event rather than the calendar protects the buyer from paying for something the authority has not yet approved.
For clinics, pharmacies, nurseries and anything with a regulator sitting above the trade licence, this instalment often splits again, with part released on initial approval and the balance on final issue.
Retention
A retained amount is a portion of the price held back for an agreed period after handover, then released once the position is clear.
It covers the things nobody can verify on the day. Unpaid supplier invoices that surface a month later. A staff gratuity figure that turns out to be larger than stated. A DEWA or municipality bill nobody mentioned.
Sellers dislike it and often push back. The reasonable answer is that a seller who has disclosed everything gets the full amount released, so the only party the retention hurts is the one who has not.
Earn-outs
An earn-out ties part of the price to how the business performs after the sale. If revenue or profit hits an agreed level over an agreed period, the seller receives the balance.
It is used when the two sides disagree about the numbers. The seller says the business earns AED 80,000 a month. The buyer looks at the records and sees AED 50,000. Rather than argue, the deal is priced on AED 50,000 with the difference payable if AED 80,000 actually materialises.
Earn-outs solve a genuine problem and create a new one. The seller no longer controls the business but their money depends on how it performs. If the buyer cuts marketing or changes the pricing, the target may be missed through no fault of the seller.
So an earn-out only works if three things are written down clearly:
- The exact metric. Revenue, gross profit or net profit, defined so both sides read it the same way.
- The measurement period and who prepares the figures.
- What the buyer may and may not change during that period.
Vague earn-outs produce disputes with near certainty.
Staff and team retention
In people-led businesses, part of the price is sometimes tied to the team staying.
This is common in salons, clinics and gyms, where the customers follow individuals rather than the brand. A buyer who pays full price for a client list and loses the staff who serviced it has bought very little.
The usual structure holds back a defined amount, released if a named group of staff remain for three or six months after handover. It costs the seller nothing if they stay, which is the point.
What the seller should insist on
Structure protects both sides, and sellers should not treat every deferred amount as a concession.
- A deposit that is forfeited if the buyer walks away for no reason
- Clear conditions on what triggers each instalment
- A defined release date on any retention, not an open-ended hold
- Written definitions in any earn-out, with access to the figures
- Handover only on payment, not before it
The last one matters most. Once the licence is in the buyer's name, the seller's leverage is gone.
What tends to go wrong
Three things, repeatedly.
Conditions that are not written down. Both sides remember the conversation differently, and by then the money has moved.
Payments tied to dates rather than events. The transfer takes longer than expected, a payment date passes, and someone is technically in breach of a deal that is proceeding normally.
Nobody defining who pays the transfer costs. Government fees, licence charges and any outstanding liabilities should be allocated in writing before the first payment, not discussed at the counter.
The short version
The price is one number. The terms decide whether either side actually receives what they agreed.
Agree the structure at MOU stage, put every condition in writing, and tie each payment to an event that can be evidenced rather than a date on a calendar.
We handle business sales across the UAE and structure payment terms on every deal we run.
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