Dubai is a highly developed, ultramodern city in the UAE that links east and west. It is considered one of the best environments for starting and running a business.
Its economy has grown a lot – from relying on oil (which now forms a meagre 1 percent of its GDP) to becoming home to thousands of businesses every year.
In time, Dubai quickly developed into a prime choice as headquarters for many businesses that it could just very well be the start-up capital of the world. Case in point: The city has issued more than 15,000 new business licences in the first quarter of 2021 – 19 percent higher than in 2020.
Still, if you wish to make it big in the city, you’ll need a lot more than just a Dubai brand identity to get your business rolling.
Starting a business can be a complex matter, but with sufficient and correct knowledge and some help from professionals, things could be easier. With that said, here are the top three expert tips you should know when starting a business in Dubai:
1. Do your homework.
Every venture needs thorough preparation to work, and company formation is no exception.
There are mountains of information you need to dig through and digest. But where to begin?
Experts recommend having a good look at the statistics first to learn what works, what doesn’t, and what adjustments you need to make for your business to thrive. This information can also be gathered through market research and analysis.
Besides that, you also need to understand what exactly you’re getting into before diving headfirst into the venture. Learn some of the critical characteristics of the Dubai market and business scene to make a sound decision.
- Dubai provides tax incentives and implements a simplified tax structure with minimum taxes to help business owners grow their companies in the city.
- Dubai has a robust legal structure that works well for both local and foreign entrepreneurs.
- The government of Dubai supports businesses through their solid policies that create a more secure corporate environment.
- Expats can now gain complete ownership of their business. Recent amendments to the UAE law granted overseas investors the opportunity to own 100 percent of almost any type of company they form in the country, even under the mainland company setup.
- Free zones offer lots of other benefits, including lots of networking opportunities, flexible office options, sufficient infrastructure, and a streamlined immigration process.
2. Define your company.
Business formation comes with several challenges, which can be overcome with the right amount of knowledge and effort in preparation. One of them is defining your company.
Determining the type of company you plan to establish is not just about choosing an industry, mind you. You also need to select a type of licence and jurisdiction for your company registration that will suit your business’s nature.
The first thing you need to get when starting a business in Dubai, besides your passport and personal documents, is a business licence. The process involves acquiring approvals from the local government through the Department of Economic Development in Dubai (DED).
You’ll also need to complete a set of requirements, which includes:
- Filling out application forms.
- Providing proof of identity and qualifications where needed.
- Undergoing criminal background check.
Take note that you’ll need to submit other company formation papers from other UAE agencies that are applicable to the specific line of business you’ll be taking.
Business licences are industry-specific and will be based on the company’s structure and the business activities you intend to perform.
Business licences in Dubai mainly come in four types:
- Commercial licence – for general trading businesses.
- Professional licence – for service-centric firms.
- Industrial licence – for companies engaged in manufacturing goods.
- Tourism licence – for companies in the travel and tours sector.
Take note that the suitability of licences differs for every business. You’ll have to take factors into account when making the decision.
You also need to select a business jurisdiction where your company will be established. For this matter, you’ll need to consider a number of important things, such as:
- Strategic location
- Cost of living
- Target market
One thing you need to know about the UAE is that every jurisdiction has its own unique set of advantages as well as governing rules and restrictions. You need to review them before finalising the decision.
Below are the three main jurisdictions you’ll have to choose from:
- Mainland Company Setup: In this jurisdiction, the company can conduct trading activities with both local and international markets. Besides the main tax benefits in the UAE, it allows your firm to access the Double Taxation Agreements with any country you choose to engage in business with. Recent amendments to UAE law also allow foreign owners 100 percent ownership, provided that the company doesn’t fall under the exceptions.
- Free Zone Company Setup: A Free Zone company setup may conduct trading activities within the country, and foreign investors can also have full company ownership. Free Zones also have multiple tax benefits, including exceptions for corporate and income taxes, VAT, customs duty, and full return of capital.
- Offshore Company Setup: Like Free Zone companies, the offshore company setup comes with 100 percent ownership. However, it cannot trade or engage in the local market. Still, there are several advantages to this company setup, including privacy, security, and minimal maintenance cost, which extends to your
3. Get in touch with experts for the setup proceedings.
Establishing a business is not as simple as it sounds, though the UAE government has made it so that business owners have the least amount of trouble when setting up their firms in Dubai.
Still, there remain several challenges with the company formation proceedings that some entrepreneurs end up spending too much time, effort, and money on the endeavour. Because of lack of experience in the task, they end up struggling with administrative matters and get distracted from what they originally came to do: establishing the company.
Fortunately, many business formation agencies can help make things easier. You can avoid any time-consuming and expensive mistakes by seeking help from those most familiar with the processes and scene.
Some companies also offer a few other services that go beyond company formation, such as:
- Visa services
- Labour services
- Attestation services
- VAT services
- Legal advisory
- Audit and assurance
- Risk advisory
- Merger and acquisition assistance
- Company liquidation
Make Things Easier
Businesses in Dubai come in different shapes and sizes, but they all have one thing in common: They were built from the ground up and established according to the laws of the land. You can do the same and even make the path easier to walk through by following the best pieces of advice experts have to offer.