A downturn in the economy, living and working in sunnier climates, lower VAT rates, no corporate and personal taxes and ease of doing business in the UAE are just some of the main pull factors for those wanting to start or expand their business in Dubai.
Being self-employed, running a business the right way, working the hours that suit your lifestyle and being your own boss all sound extremely satisfying. However, before you decide to quit your day job and start the entrepreneurial dream there are a few things to consider for starting a company in Dubai.
1. Business Idea
Every good business idea involves some degree of research. Check to see if someone is already doing the proposed business. Find out who is your competition. Identify if there is an opportunity in the market, can you find a unique angle or find a better approach to solving a problem or meeting demand?
2. Business Plan
It is essential to create a sound business plan as it can help guide you in the right direction. Many new business owners overlook this step and end up having to later create a business plan for licensing authorizes and banks, therefore, it is important to have your business plan in place from day one.
A business plan is a continuous work in progress and new businesses should periodically review this in line with commercial aims and objectives.
Starting a business in Dubai can be expensive therefore, every penny counts. Ensure that you have set aside a budget for the company incorporation and licensing, employment, marketing, and advertising, stock inventory and miscellaneous fees (as there are always surprise costs that have not been budgeted for). Plan for the future, think big and ensure your budget allows for future expansion and any opportunities that require capital.
4. Company Structure
There are many variables involved when deciding on the right company structure for your Dubai company. Foreign entities wanting to perform a business in the UAE can establish a formal permanent presence or by using a commercial agent.
A foreign entity may be licensed by:
We strongly urge you to contact the experts for a consultation. At Creation, we will explore your options and advise the correct business activity that permits you to be able to trade without any restrictions and whilst being fully compliant with UAE Commercial Companies Law.
5. Share Capital
Certain business activities and specific free zones will have share capital requirements. Dubai Multi Commodities Centre (DMCC) free zone authority require the minimum paid-up share capital amount at AED 50,000. Therefore, can you really afford to pay up any additional capital? Whereas, other free zones only require the share capital amount to be mentioned in the Memorandum and Articles of Association and do not require paid-up share capital these include: Dubai World Central, International Free Zone Authority and Umm al-Quwain to name a few.
6. Business Activity
Certain industries and business areas require you to trade within a particular free zone. For example, the Dubai International Financial Centre (DIFC) is predominantly used for business activities related to financial services. Therefore, your business activity may only be restricted to a particular free zone. Since this free zone is centrally located in Dubai there are mandatory requirements that must be fulfilled in order to obtain the issuance of a trade license for your Dubai company.
7. Visa requirements
When starting your business you must consider the present and the future growth. Business owners are often confused with the visa entitlement and their availability. As a shareholder, you may be eligible for an investor visa. One of the main reasons shareholders opt for a UAE residency visa is due to wider banking facilities that are available to investors. Even if you do not need visas immediately, plan for your business expansion. A General Manager of a new company often requires a UAE residency visa, therefore, ensure your business structure will permit your company to hire and employ staff.
8. Business Premises
In order to complete a company setup in Dubai, a business address needs to be attached to the trade license. Even if you do not require office space your business must fulfill this requirement. A Dubai onshore license will require a lease agreement to have a certified Ejari attached. The Ejari copy must be produced to Dubai Economy to issue the trade license. In general, most free zones provide virtual offices (no physical location), flexi desks (limited and capped at hours per month), smart desks, shared offices, permanent smart offices, and warehouses etc. Depending on your business activity, location and the number of UAE residency visas that are required each business premises type will satisfy your company licensing requirements. Note leasing business premises in a free zone can be restricting and more expensive when there are additional residency visas required. Whereas, leasing business premises onshore/mainland UAE there is more of a variety, better value for money and a lot fewer restrictions especially with visa eligibility.
9. Time frame
We often get asked by clients how long it takes to setup up a Dubai company. The answer does vary depending on:
Creation can have a straightforward onshore Dubai Limited Liability Company setup within 7 business days. We have issued certain free zone licenses within the same day and the fastest license we have issued to date is within two hours. Some free zones can take upwards of 6 weeks or more to issue a new trade license. Again each Dubai business setup is different and it will depend on your business needs.
Last but not least an important factor to consider is outsourcing services such as digital marketing, accounting, manufacturing and distribution, importing and exporting. Startups and SMEs could save a lot of money by outsourcing such tasks rather than employing and keeping this in-house. Identify if there are any tasks that can be outsourced for your company. At the end of the day, you really have to assess where your time is best spent and know which tasks you are able to outsource in order to get jobs completed on time.
We hope these top 10 tips give you food for thought and help you consider some of the important things when starting your Dubai company setup. There are many opportunities available in the UAE for startups, entrepreneurs and those looking to expand their business to the GCC market. Take the first step toward your international success story and contact us. The team at Creation Business Consultants are waiting to speak to you today and guide you towards building the business you deserve.
Creation ensures clients receive a seamless, cost effective and proficient entry to the GCC market. We provide clients with the foundations and best practices empowering them to build and control a successful business.
We continuously strive to exceed client’s expectations whilst making certain they are protected from undue risk at all times. Creation Business Consultants is the preferred and truly trusted business partners for the GCC.