Dubai has always been supportive of business startups. Since Dubai has shown its economic stability in the international market, it doesn’t come as a surprise that it is attracting business investors’ attention. UAE offers an almost unlimited number of opportunities for foreign investors to tap into commodities imports and exports. Additionally, the city’s growing tourist traffic provides potential customers and clients to foreign investors in any given area.
During 2015, the city issued 22 369 licenses, according to a report by the Dubai Statistics Center on business sector activity. You should pay attention to a few of the avoidable pitfalls of doing business in this dynamic, fast-moving, multicultural environment since we serve 1.5 billion consumers across the Middle East, Africa, and Asia.
In order to launch a successful enterprise in the United Arab Emirates [UAE], you should be familiar with the various facts related to a business start-up in Dubai, in order to avoid common challenges. As a result, you’ll need to pay attention to some Dos and Don’ts.
Do’s in launching a business
Do as much research as you can
Be sure you know a lot about the UAE before you launch a brilliant new company venture there. Understanding the different business conditions in each industry requires extensive research either by yourself or by a consultant.
Consider UAE national sponsors for local business start-ups
You need a locally registered LLC company if you want to start a business in Dubai that can take full advantage of its potential. Local ‘sponsors’ are UAE nationals who are taken as part of a 51% joint venture. Business can be located anywhere in a city with the help of a local company.
The best part about this is that it gives Dubai-based startup companies the chance to choose locations according to their budget. A sponsor gets paid a yearly fee, which can be negotiated. Assuring your sponsor you are comfortable with him so that he is prepared to assist you with any complications you experience along the way with authorities.
Ensure you are eligible for a Visa
Startup businesses in the UAE need a visa that will allow you and your employees to live there. For most businesses, visas are accepted. You should definitely work with your sponsor to get your visas if your business startup in Dubai is a local company – at least the first time.
For 100% ownership of your business, choose a Free Zone
A business startup in the UAE may not be able to start without a UAE national partner if your company is based in a Free Zone. Restaurants and retail stores must be located in city markets, so this is not practical. A local sponsor must be identified for businesses that work with the government. Free zones provide three great benefits to startups: 100% ownership, a fast start, and duty-free trade boundaries.
A location should be chosen based on suitability, convenience, and cost
The decision of where to establish a company in Dubai is another important step in planning a startup. Setting up a business in the city would not be useful regardless of the growing economy if your clients and customers cannot find you. Establish your company in a strategic area for your business that is profitable and convenient.
Get help from a business setup agent
For your business startup, you may want to consider hiring a business advisory firm. Not only will these consultants assist you during the process, but they will also register it for you.
Don’ts when starting a business
Don’t base your plans on anything but published information
In order to confirm that the published data is accurate, it is prudent to verify it before finalizing any business startup plans. The Department of Economic Development’s rules changes for business registration in free zones as well as in local government offices. Don’t go ahead before contacting the appropriate authority or consulting with a business consultant.
Do not register in a Free Zone unless you’ve checked office sizes and conditions in advance
Free Zones often give a wide selection of offices in their published information. In most cases, the cheapest option is preferred by startups. If you actually file the documents to register a company, you may only find certain office sizes available. Budgets will be thrown out of whack as a result. Changing your Free Zone may not be possible then. Don’t proceed until you know exactly what is going on with the office.
Don’t choose a license category without verifying that it allows your business model
Business models in the UAE don’t need to revise very often. The situation requires many changes or a few tweaks very often. If you plan to use an entirely new business model, make sure your planned license category allows you to perform all the expected activities. License categories should not be too narrow.
Don’t agree to sponsorship without a written contract
It may be difficult to start a business without much support. There may be some services that local sponsors wish to charge separately. A written agreement must draw up and attested in the local court before an agreement on sponsorship can finalize. It is not enough to rely on verbal communication.
Make sure you verify the bank fees before opening an account
The fees charged by banks vary. The sums can be significant for the startup of a bank-dependent company. Ensure that the costs and requirements confirm before you proceed. Banks should not choose solely on the basis of their reputation.
In this article, we hope to provide you with some guidance to help you avoid difficulties while starting your business in Dubai.