How can you set up new business in Dubai?
To set up new business in Dubai has always been appreciated and encouraged by local authorities of Dubai, UAE. That is why Dubai has started to attract business minded people since it started to show its economic stability to the international market. Present market trends in Dubai offer a number of opportunities for local people and foreign investors as well. There are still many reasons to choose and set up new business in Dubai despite some economic down turn in past years. Dubai has now managed to stabilize itself economically and has already started to give signs of a very significant revival.
Reasons to choose Dubai:
There are a number of industries in Dubai including Shipping, Media, IT, Tourism, Retail, Banking, Gold & Diamond business, Exhibitions and General trade etc. It has become one of the world’s biggest travel hubs among visitors. People of other countries get attracted because of easy geographical access, strong economies of the Gulf and economic growth margins. It is a great place in the Middle East with no tax, low rents, comfortable life style and great weather. Set up new business in Dubai could be a challenging task for newcomers but people need to get familiar with the various factors associated with new businesses and try to avoid those problems which they mostly encounter while launching a profitable business in Dubai/ UAE.
Types of businesses:
There are two types of businesses which can be set up in Dubai.
- Free zone Company
- Offshore Company
- Mainland company
Free zone Company:
Selecting free zone district is the only option to get 100% ownership of the business in Dubai. However this is not possible for those businesses to grow which should be established in city markets like retail stores and restaurants and businesses that link with the government must be registered with a local sponsor first. For set up new business in Dubai free zone area must be expensive for the budget initially. Anyhow free zone district offers other great advantages like:
- 100% ownership
- Quick start up
- Duty free customs boundary
- Run international businesses
- Buy properties and do multiple activities
- 0% tax
- Low renewal charges
Offshore Company:
In this category those trades are included which are already operating businesses outside UAE for instance; a business in England opens up a similar branch in Dubai/UAE. The offshore company is usually set up to provide “tax relief invoice facility” to the companies. Following advantages:
- No minimum capital requirement
- International standard regulations
- One director for each company
Mainland Company:
If you choose to set up new business in Dubai, you can also set up a mainland company in any part of UAE while giving 51% of partnership to local sponsor.
Major points to consider:
Select a local sponsor:
If someone really wants to set up new business in Dubai, he must have to include a UAE national as a partner of 51% ownership for establishing a mainland company. This local sponsor or company gives freedom to choose best location for the business that suits one’s budget. You have to pay a yearly fee to the local sponsor for this business which can be negotiated between both parties.
Suitable location:
Another factor to establish new business in Dubai is to select suitable location according to customer convenience and effective cost. While selecting free zone area, one should keep in mind the factors of distance, cost, product suitability and trade requirements.
Visa eligibility and requirements:
Set up new business in Dubai also requires visa eligibility and other entry requirements. According to the business nature investor or business visa could be applied. Visas are allowed for all type of businesses in Dubai.
Services of registration agent:
It is very important to hire a registration agent to start the process of a new business. He will thoroughly guide and complete all legal procedures for a new business. In many cases these agents offer great strategies that can help to run a business smoothly.
Office sizes and preconditions in free zone:
It usually happens that new businessmen often register their companies in free zone without taking a look in the area. The actual availability keeps on changing. When someone actually goes for registration and they come to know that only certain size offices are available so it is important to have a look on office facility sizes. Sometimes certain size offices allow only one visa which is only for investor and not for the employees.
Published information:
Before set up new business in Dubai and finalize things, don’t always only believe in published information about business. It keeps changing in free zone and also in the local Department of Economic Development for registration. Try to contact a business consultant and relevant authority before finalizing things.
Choose the accurate trade license:
It is very significant factor for set up new business in Dubai that one should always choose the right trade license for business. Because sometimes it happens that specific license gives narrow options and possibilities for the business activities. Dubai’s Department of Economics Development decides which type of license one’s company needs. There are 3 types of key licenses such as commercial, professional and industrial licenses but there are more than 2000 activities which can be selected for a business.
Opening bank account charges:
Bank’s rules and regulations may vary according to the circumstances. Always confirm before opening a bank account in Dubai about its charges and requirements. Try not to choose a bank only on reputation.
Written legal agreement:
Set up new business in Dubai initially demands a lot of support. Therefore it is always a better option to have a written legal agreement in which everything is mentioned about share of every stakeholder. A local sponsor may want to charge a new businessman for every single service.
Cost:
Dubai tax free nature is very attractive to many businessmen but establishing a new business in Dubai could involve major money matters on many occasions for example; trade license cost, business start up fees in free zone, minimum capital amount for business, cost of sponsoring employees and future cost of importing goods to the country etc.
Conclusion:
To sum it up, it can be clearly narrated that there is a lot of potential in the business market of Dubai. However set up new business in Dubai is a detailed procedure in which everything should be legally acknowledged and approved to avoid any hassle in the future.
