Setting Up a Business in Dubai
An Entrepreneur’s Guide to Setting Up a Business in Dubai
Dubai has emerged as one of the biggest destinations for setting up a business in Dubai. If you are looking for setting up a business in Dubai, then there are a lot of things that you should know. In the following post, we are going to take a look at those critical things.
The Dubai government offers different types of business models to choose from, like as direct sale, commercial agency arrangements, branch or representative office, limited liability company and special free zone investment. So, let us delve into the details now, shall we?
Here are the some of the most critical things you must know before setting up a business in Dubai:
- Knowledge of the Region: You must have a good knowledge of Dubai and the UAE in general. You should take the time and effort to do extensive research into the business sector you aim to operate within. For such purposes, you can hire a professional business consultant as they would help you in the process. You must have a viable business plan, and for that you would need to do a study of the market conditions and the competition. You must be prepared to arrange for the necessary investment from your own resources or through your bank. Applying locally is a bit challenging particularly if you’re new to the region and without a track record. However, once you get through the initial hurdles a credible plan might attract local support, possibly government support.
- Having a Local Partner: If you are looking to setting up a business in Dubai in a freezone and not in the free zone, then the law requires that you have a local partner who holds the majority interest and can therefore control the business. Since, partner will own 51% of the company, he/she/they would be able to call all the shots regarding it. Whether they are a company or an individual, the local partner doesn’t need to contribute to the start-up investment or participate financially at all. If you don’t want to get a local partner, then you need to look at setting up a business in Dubai Freezones. But that would come with restrictions, especially if you want to cater the UAE Domestic Market
- Having Enough Money to Invest: When you are setting up a business in Dubai, you need to show the Ministry of Commerce that you have enough money to invest. The required sum varies from emirate to emirate (it’s between $10,000/£6,500 and $50,000/£33,500 in most cases).It is usually regarded as a guarantee against liabilities, and you may withdraw the money shortly afterwards!
Setting Up a Business in Dubai Free Trade Zone
If you want to own 100% of your company and do not want to have a local partner, the only option is to starting a business in Dubai is complex and financially risky as well. This is why local knowledge . However, if your business requires being near the city, it will probably be challenging to run it in the Free Zone as most FTZs are located at a faraway place from Dubai. Additionally, rental costs in the Free Zone are usually higher than regular rental prices within the city.
Understand the Complexity of Opening Setting Up a Business in Dubai
You must understand that setting up a business in Dubai is complex and financially risky as well. This is why local knowledge is crucial. You must also ensure that you have a reliable legal counsel right from the start. An experienced lawyer will guide you through the registration complexities and his help will be vital in protecting your interests in Dubai. This applies whether you’re opening a modest shop or a major enterprise.
At the same time, you must also realize that people have formed successful, highly profitable businesses in Dubai. New operations are encouraged by the authorities and if you are going with a local partner, then he might be enthusiastically supportive.
Export and manufacturing industries are especially supported by government. They have eased the process of acquisition of land on which to construct a factory. If you are setting up a business in Dubai free trade zone, you would be granted exemptions from import and export duties, commercial taxes, building and property license fees, land tax and restrictions on the transfer of capital invested in the zone.
Apart from setting up a business in Dubai, you can buy a going concern as well. It is actually easier, as it doesn’t involve lodging capital, obtaining sponsorship or registration. You have to agree a price and transfer the ownership of the business and you are good to go
Getting the Help of the Local Chambers of Commerce
Local Chambers of Commerce can give you useful advice about setting up a business in Dubai and also help you identify potentially profitable newcomers to the region. Winning the confidence and support of a Chamber of Commerce is great for your business.
Contact details are as follows:
Dubai Chamber of Commerce and Industry, PO Box 1457, UAE
(Tel. 971-4-221 181)
Federation of UAE Chambers of Commerce and Industry, PO Box 8886, Dubai, UAE (Tel. 971-4-212 977)
Dealing with the Arabs
When doing business with Arabs, you would understand the art of hard but polite bargaining and find they are experts at it. You need to be completely confident about the contents of your contractual agreement. If there are loopholes, Arabs are brilliant at finding and exploiting them. Nevertheless, Arab businessmen meet their obligations fully. The experience of doing business with them would be pleasant and friendly, and the trust built up on both sides will be long-lasting.
Arabs rarely say ‘no’ to a proposition directly, so you must listen and observe carefully. Look out for signs that tell you that someone is accepting without really wanting to do much, as there is good chance that the project will go nowhere in such cases.
Visa Eligibility and Requirements
Before setting up a business in Dubai, make sure you meet your visa eligibility and requirements. You will need a visa that allows you to live and work in Dubai. If you want to employ foreigners onto the project, you need to work closely with your local partner in order for them to sponsor your employment visas.
The potential gains of setting up a business in Dubai are huge, but it isn’t for the faint-hearted. You need to remember that you aren’t a citizen of the country and when the time comes to leave and sell your interests, your partner has time on his side, while you might not.
Company Registration & Legal Obligations
Corporate laws in Dubai are similar to that in western countries, as businesses can be run as limited liability operations, private companies or other types of concern. Setting up a business in Dubai or buying a going concern can be complicated and you must obtain local legal counsel and guidance about registration formalities. If you are a foreigner, you’re probably going to go for a western/Arab joint venture law firm. When choosing, you should seek the advice of the Arab-British Chamber of Commerce, the DTI, Middle East Association and your Embassy’s commercial sections.
Western expatriates are generally well qualified. However, the qualifications are carefully checked with the issuing bodies, irrespective of where they were obtained. Western expatriates therefore tend to occupy senior positions, with high salaries and great perks. On the other hand, workers from south-east Asia and the Indian sub-continent (who are sometimes – politically incorrectly – referred to as ‘Third Country Nationals’ or ‘TCNs’) usually occupy unskilled or semi-skilled jobs and are paid accordingly.
Business etiquette in Dubai
An effective sponsor or employer is a great thing to start dealing with officialdom, and observing his skillful negotiating would be a helpful experience. If you are setting up a business in Dubai are usually helpful and don’t tend to be strict unless they have good reason. You will find your working life in the UAE get much easier if you’re polite and patient. Smile and seek ‘advice’. Requesting advice confers respect on the person asked and you will find that Arabs are friendly and helpful when you do that. When you are setting up a business in Dubai, you should realize that the recruitment of foreign staff is an expensive exercise for employers, as it includes recruitment consultant fees, legal expenses and travel costs.
When you are looking for setting up a business in Dubai, you should get the help of a professional business consultant. You can take the help of Arab Business Consultant as they are one of the leading names in the business. They would help you in every possible way to ensure that the process of setting up a business in Dubai is easy and hassle-free and you enhance your chances of success!