With its near overnight economic growth, looming skyscrapers, and boundless wealth, it can be easy to see why Dubai has become a global hub for commerce and trade. From its once humble beginning as a sleepy Gulf port, Dubai has emerged as one of the region’s business crossroads. It’s even received the nickname, the “City of Gold.”
For entrepreneurs, the UAE government introduced favorable corporate policies. Its business-friendly tax system, excellent infrastructure, and numerous free zones make it easy to see why Dubai is a strategic place for entrepreneurs looking to gain a foothold in the Gulf peninsula.
But like any other city, there are hurdles awaiting entrepreneurs looking to set up shop. For those looking to gain a distinct business advantage, here are five things to consider.
1. Target market
When operating within a new market, it’s pertinent that entrepreneurs are knowledgeable about the region. This includes market research; understanding your target audience, the competitive market, and forecasting results. But it also goes so much further than that.
Doing business in Dubai is far different from doing business in countries like the United States or parts of Asia. Foreign entrepreneurs must also be aware of the local business culture. Being mindful of these cultural differences will go a long way in significantly improving the success of your new venture.
2. Business legalities
Beyond market research and cultural considerations, there are other elements that must be considered when starting a business in Dubai. The first is deciding the type of business to operate.
The type of business will determine the necessary trading license required from the government. Certain business activities, such as the trade of goods (food, jewelry, etc.), legal consultancy, among others will require extra approval from the right authorities.
The Department of Economic Development (DED) has outlined over 2,100 activities to select from, all complete with the necessary paperwork and approval formalities. Other legalities to consider when starting a business in Dubai is your company’s trade name and business proprietorship. The DED covers all of this in more detail.
3. Office location
Once all the business legalities have been dealt with, it’s important to start considering a short list of offices operates from. Choosing the right premise can be decided by financial capital, company size, and client accessibility.
Dubai has designated free zones throughout the city to encourage foreign investment. Advantages of choosing your premise in a free zone include:
- Easier startup processes
- 100% company ownership
- Waive corporate taxes
- Exemption of personal, import, and export taxes
- Simplified documentation, recruitment, and workforce processes
- Long-term leasing options
For startups looking to gain a foothold in Dubai, it’s advisable to start their enterprise in a free zone as the Dubai free zone company setup cost offers flexibility and scalability.
4. Opening a bank account
To undertake any kind of business in Dubai, one is required to open a corporate bank account. Since Dubai is home to many well-known global banks and several local ones, there many options to choose from.
It’s important that entrepreneurs do their research before selecting a financial institution. Different banks will employ different charges. Many of these charges vary depending on the account required. Requirements for opening a bank account will also vary by financial institution.
To establish an account with a bank, entrepreneurs must have all the necessary corporate documents, all the appropriate legalities (reference letters, business plan, etc.), and detailed company records.
5. Hidden costs
Dubai may have a progressive business landscape that assists entrepreneurs in creating new business ventures. But it’s important that entrepreneurs read the fine print to get the full understanding of requirements and charges beforehand.
Failing to do so maybe a costly mistake; both in money and time.
Depending on the company’s license and location, fees may vary. Legal fees and administrative costs aren’t the only things to consider when setting up shop in Dubai. Additional costs include:
- Residence visa
- Visas for staff
- Annual license renewal fees
- Relocation fees if the business needs to move shop.
Entrepreneurs may benefit from hiring a company that specializes in assisting in the setup process of foreign companies.
Not only does their knowledge and expertise make the process go a lot smoother, but they provide complete business transparency so there are no hidden costs to surprise entrepreneurs down the line.
Dubai may be the ideal destination for entrepreneurs looking to start a business. At the same time, starting a business in Dubai can be a challenging experience. It’s essential that any entrepreneur looking to make their mark in the “City of Gold” be knowledgeable about the cost of starting a business in Dubai to ease the process, save time, and most importantly, save money.
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- 5 Things to Consider When Starting a Business in Dubai - December 28, 2017