Dubai is a dream destination for every businessman and investor, provided its outstanding infrastructure, favorable business environment, diverse economy, and many more countless benefits. Besides, the business networks in the country have developed rapidly over time.
In addition, the recent market trends offer a plethora of opportunities for overseas business people to tap into the Dubai business world. Hence, it is the best time to start a business in Dubai.
Although the business setup process in Dubai is quite straightforward, you still need to be familiar with different facts associated with the process in order to avoid any probable errors or shortcomings. Hence, this article will guide you with all the compulsory details required to set up a business in Dubai and UAE.
Start a business in Dubai – Things to consider
Starting a business in Dubai feels like an exciting opportunity and a beneficial experience. However, there are a few things to consider before diving into the setup procedure –
1. Fix a budget
Starting a new business can be heavy on your pockets. Therefore, it is necessary to set a fixed budget to handle major expenses such as business incorporation, inventories, recruitment, licensing, advertising, marketing, and other hidden costs. Furthermore, planning for future expenses would enable you to gather a considerable amount of funds for unforeseen events. Thus, always think big, plan for the future, and make sure to prepare a budget that would cover all upcoming capital-intensive opportunities and growth.
2. Study your competitors
Dubai comprises a competitive business market. Therefore, make certain to research the market thoroughly and identify your prospective competitors. Analyze their business models, pricing strategies, and marketing techniques, as well as their consumer base. Carefully study if your desired business activity is already existing in the market, or whether you can fill a specific niche. Look for more effective methods to fulfill customer demands or resolve any existing concerns. Thus, identifying your competitors’ strengths and weaknesses would help you distinguish your business from theirs and achieve a competitive edge.
3. Pick an ideal business structure
There are several options for business structures available in Dubai such as sole proprietorship, limited liability company (LLC), branch office, etc. and it is crucial to choose the right one according to your business necessities, objectives, and budget.
Since every structure possesses its own pros and cons, the assistance of a trusted company formation expert like UAE Expansion can help you pick the apt one and create an ever-lasting presence in the market.
4. Draft a detailed business plan
Before getting on to the setup procedures, it is essential to draft a proper plan for the business that outlines your organizational goals, target audience, marketing plans, operations, and financial projections. A well-designed plan can assist you in regulating expenses, attracting potential clients, and managing your business choices, thus leading the company in the proper direction.
Additionally, banks and licensing authorities also demand a solid business approach in the form of a detailed blueprint of the organization.
We recommend you speak with the business specialists of UAE Expansion for thoughtful advice for your company. They will carefully examine your business requirements and guide you with the best course of action accordingly.
Economic zones to start a business in UAE
UAE offers three main business economic zones to set up a company – Freezone, Mainland, and Offshore. Each of these zones has its own unique advantages and disadvantages. Therefore, it is essential to understand these differences and make a wise decision as per your business needs. Below is an overview of jurisdictions available in Dubai, UAE –
1. Free zone
Free zones are designated economic zones specially designed to attract foreign investors to set up their companies in UAE. Free zones are widely known for their liberal features providing multiple benefits to businesses as well as their owners. These features and benefits include 100% foreign ownership, zero tax on corporate and personal income, zero customs charges, easy company setup, and quick processing of visas. Moreover, it accommodates industries like technology, media, and logistics.
However, one of the major drawbacks of running free zone companies is that their operations are generally limited within the free zone or with other free zones. In other words, they cannot trade directly in the UAE market.
Unlike free zones, mainland companies are allowed to trade and conduct business within the UAE market and across international borders. This thus facilitates global reach and a significant presence in the local market. Nevertheless, depending on the nature of the business, you might need to hire a local partner or a local service agent to establish the company in Dubai.
Mainland business setup features a wider range of activities, access to government contracts, and opportunities to trade with other UAE companies. The Department of Economic Development (DED) regulates the functioning and licensing of Mainland ventures.
Investors looking for a tax-efficient and cost-effective way to conduct international business can opt for an offshore business setup. The benefits offered offshore include 100% ownership, no corporate tax, and confidentiality. Moreover, business owners do not have to set up a physical office or plant to run their business. Nonetheless, they are restricted to conduct any business within the UAE market.
What are the types of business licenses in Dubai?
While establishing a new company in Dubai, you must choose a proper license to run it lawfully. There are three main categories of licenses available for business setup in Dubai.
- Commercial – This license deals with the purchase and sale of commodities or any other type of trade activity carried out by businesses in Dubai.
- Industrial – This license covers manufacturing activities involving the mechanical or manual transformation of raw materials into final products.
- Professional – This license is issued to entrepreneurs or firms offering professional services to their clients.
Steps to Establish Your Company in the UAE
Starting a business in Dubai involves a list of crucial steps –
- Determining the legal structure
- Selecting a business activity
- Deciding a location
- Choosing a business name
- Designating start-up capital
- Getting pre-approvals
- Securing office premises
- Applying for the license
- Recruiting staff and workers
- Applying for visas and bank account
There might be a requirement for additional documents depending on the business activity, legal structure, and jurisdiction you choose to start a business in UAE. This whole process might feel a bit exhausting, but you do not have to worry as UAE Expansion agents can arrange all these documents for you and even submit them to the relevant authorities on your behalf.
Few business ideas to consider starting in Dubai:-
- Real estate
- Travel and tourism
- Pharmaceuticals and Healthcare
- Handyman services
- Cleaning services
- Salon and spa
- Restaurants/Cafes/Bakeries/Cloud Kitchen
- IT solutions
- Fashion boutiques
- Digital Marketing
Make it easy with UAE Expansion
Consult UAE Expansion Business Setup for your new company setup in Dubai or anywhere in UAE. We are a one-stop-shop providing comprehensive company formation services to investors all around the globe.