UAE, the land surviving with success is always a perfect option to choose. Starting a business abroad can be a daunting prospect. When the foreign country in question is the UAE, however, it is anything but. The Emirates is an incredibly welcoming and supportive business environment where many startups and entrepreneurs are growing without any limit. The land is rich by birth and it flourished thousands of entrepreneurs within a short duration.
With the development the country is progressing to its peak holding many businessmen as a winner.
That’s one of the many reasons why some 20,000 new businesses launch in Dubai alone every year. With an expat community of 80-90%, many of these new businesses are set up by international entrepreneurs.
If you’re considering adding to that number, here’s everything you need to know about starting a business in Dubai – from the key benefits, to how to choose a company name and apply for licenses and visas.
Benefits of starting a business in Dubai
There are plenty of reasons why thousands of entrepreneurs over the world flock to the UAE and Dubai to do business. These include:
Low tax
The most beneficial part in setting up a business in Dubai is that the UAE still proudly boasts zero tax on both personal and corporate incomes. The only significant tax to be aware of here in the Emirates is VAT – introduced in January 2018 – which stands at a flat 5%.
Set up in a free zone and you’ll also benefit from 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption.
What does this mean for the entrepreneur?
Tax is a major outgoing for most businesses in other parts of the world. When cash flow is tight in the early days of a startup, it can be a significant, and completely unavoidable, expense.
UAE, benefits entrepreneurs in exempting from a huge TAX where they can improve many things in their preferred business. You will pay zero tax on both
your personal and corporate income. This not only improves the profitability of your operation, but at the same time it also gives your business much more liquidity, potentially improving your cash flow and leaving you with more disposable income to reinvest in your company.
Startup support
The Emirates is home to many funding initiatives designed to accelerate business growth. The AED 2bn Mohammed Bin Rashid Innovation Fund, for instance, helps UAE companies finance projects and offers expert guidance and support to turn business ideas into reality. Many of the UAE’s free zones also feature startup incubators and venture capital forums aimed at helping small businesses grow and find funding. Startup support was one of the great thing to be taken into consideration where UAE supported and welcomed new entrepreneurs giving complete rights and assistance.
The UAE government is also committed, by law, to award at least 10% of government contracts to small businesses every year. Meanwhile Dubai recently unveiled its plans to shorten payment cycles for SMEs in an effort to increase liquidity and promote growth.
What does this mean for the entrepreneur?
The benefits of working in an environment that is not just welcoming to small business but highly encouraging, cannot be overstated. UAE gives an effective support to new entrepreneurs and a good working environment for growing the business. An environment that is set up to help businesses grow means
you’re never short of options whether you’re looking for advice, mentorship or
even funding.
And clearly, it is a system that works – SMEs account for 95% of the enterprise
population in Dubai and contribute 40% of the emirate’s GDP.
Vibrant economy
The Emirates is home to the second largest economy in the Arab world, with a GDP of around AED 692bn, behind only Saudi Arabia.
A large diverse land, with several industries from healthcare and hospitality to technology and trade in the ascendancy in this part of the world. This has led the Index of Economic Freedom to praise the UAE economy for its broad-based and dynamic growth underpinned by continuous efforts to strengthen the
business climate, boost investment, and foster the emergence of a more vibrant and diverse private sector. UAE is known for its development and progress where still in this century it beats down other countries
What does this mean for the entrepreneur?
A large and diverse economy presents a wide range of opportunities for the entrepreneur to grow. A strong economy promotes trust and encourages investments. All the entrepreneurs are happier to invest in new offerings and the cycle of economic stimulation continues.
A strong economy also tends to lead to higher wages. In the UAE, wages increased by 3.9% in 2019, leading to a net positive increase in disposable income – great news if you’re selling straight to the consumer.
Strategic location
Location helped in growing business so far where Dubai’s location makes it the ideal hub from which to trade with the vast markets of East and West. Its time zone overlaps with that of many global business cities and its two busy airports put one-third of the world’s population within a four-hour flight and two-thirds within eight hours.
What does this mean for the entrepreneur?
The UAE is the perfect place to conduct international business in the world. Its strategic location at the heart of the Middle East affords it a time zone that overlaps with the working day of most leading business cities in Asia, Africa, Europe and the east coast of America.
The Emirates is also home to two of the world’s busiest airports – Dubai International and Dubai World Central – offering direct passenger and cargo services to much of Asia, Africa and Europe – and even as far afield as the USA and Australia. If you’re looking to import or export, the UAE is also well served by sea, with Jebel Ali port among the world’s top ten busiest.
Ready to start your business in Dubai? Here’s how to get things underway:
Choose an activity
This needs to be decided upfront because your chosen activities can affect where you can set up. The Dubai Department of Economic Development lists over 2,000 activities that your business can fall under.
Choose free zone or mainland
In setting up a business in a free zone, you’ll benefit from 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption, you will need to work with a partner to trade locally in the UAE. Business set up in the mainland is different where you can trade directly with the local market and take on government contracts.
Choose a company name
A company name is mandatory for your progress and there are some
conventions in UAE for naming a company. You’ll need to adhere to the UAE’s strict naming conventions to move your business forward. A company formation specialist can help and ensure you meet the criteria.
Apply for a license
There are some papers to be submitted for applying for a License. You will usually only require a few standard documents including a completed application form, shareholder passport copies, and so on, whether you’re setting up in a free zone or the mainland.
Open a bank account
After getting your license in hand, you are free to open a UAE corporate bank account. You can choose from a host of international, local, and Islamic banks based here in the UAE or you will be assisted by a business expert
Apply for your visa
The final step in the business setup process is immigration and visa processing. Again, a perfect company formation specialist can guide you through this process.Post navigation