Here are 5 Tips For Starting a Business in the UAE

With one of the most accessible trade regimes in the GCC, the UAE is the ideal place to establish a business, regardless of sector or size. In terms of ease of doing business, the UAE was ranked 16th out of 190 economies in 2019. It is a worldwide economic hub that connects the east and the west and provides a variety of advantages, including a stable political system, business-friendly taxes, and substantial capital inflow.

While it may be tempting to start a business in UAE, you will need the right approach to keep your business afloat and stay ahead of the competition. Your business may implode even before it has a chance to develop unless you are certain that the UAE market is the best match for the product or service you want to offer.

In this post, we have provided five tips for effectively entering the UAE market and establishing a lucrative business:

1. Choosing the right jurisdiction

In the United Arab Emirates, there are more than 45 free zones, with more than 20 of them headquartered in Dubai alone. Each free zone adheres to geographic borders and rules, and each one promotes unique commercial activity. Jebel Ali Free Zone, for example, has direct access to a seaport, making it excellent for wholesalers and logistics companies. Smaller, startup businesses thrive in low-cost areas like Ajman. A common aspect of all free zones that appeals to foreign investors is that they can be entirely controlled by foreigners.

2. Market research & Developing a business plan

The market in the United Arab Emirates is unique in comparison to that of most other nations. Because there is such a varied spectrum of nationalities present, as well as a genuine culture of innovation fostered by recent government efforts, trends change rapidly. Naturally, all of this has ramifications for businesses attempting to establish themselves in the region, and businesses that have proven viable in other nations may not be profitable in the UAE. As a result, conducting market research is an important part of establishing a business in the UAE and preparing your entry into the Middle Eastern market.

Market research is characterized as the collecting, evaluating, and interpretation of information on a sector of a certain market in its most basic form. Market research is used to assess how your product or service will fit into current market circumstances, and it will contain information about your rivals as well as the wants and preferences of your target customer.

You can establish a clear strategy and plan for your firm if you have a good awareness of the market circumstances. A business plan should include the critical parts, in addition to a high-level overview of your company's products or services.

A feasibility analysis is to determine if the company is likely to be profitable in the present market. Understand all of the expenditures associated with starting and running a business, as well as how you plan to acquire funds if necessary. There may be expenditures associated with starting a business that you have not anticipated, such as trade licensing fees, visa fees, and government fees, therefore it's always a good idea to obtain preliminary assistance from a business setup expert. An increasing number of SME initiatives and incubation platforms are available, notably in Abu Dhabi and Dubai, to aid with some of these expenditures.

3. Determine the most appropriate commercial structure

In Dubai, you can choose to form different business entities like an on-shore Limited Liability Company (LLC), a foreign branch, a civil company, or a Free Zone Limited Liability Company (LLC). In most circumstances, the cheapest choice isn't always the best one, therefore it's a good idea to work with a local consultant who has worked in the parts of Dubai, UAE before and can advise you on the best company setup alternatives for your industry, service, or product.

4. Understand the legal framework

The UAE features a one-of-a-kind legal system. You must grasp the nitty-gritty if you want to succeed in the UAE industry. The Emiratisation policy, for example, requires all enterprises with 100 or more employees to recruit a set amount of UAE citizens. To work lawfully in the UAE, a non-UAE national requires a work permit and a residency visa, as well as compliance with the General Directorate of Residency and Foreigners Affairs and the Ministry of Human Resources and Emiratisation's laws.

Not having a thorough understanding of the legal framework can increase your chances of non-compliance and put your interests at risk.

5. Understand your trade license

It is prohibited to do business in the UAE without first obtaining a valid license. Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs) are the most frequent corporate vehicles in the UAE (public and private). For overseas investors forming joint venture enterprises, the LLC is the most widely utilized vehicle.

The United Arab Emirates is a very promising market with a lot of room for growth. You may start a firm and benefit from the benefits of a liberal trade policy if you have a good strategy in place. However, as an entrepreneur, you may not be familiar with the UAE's fundamentals. After all, breaking into a new market isn't easy. You'll need a solid grasp of the market, consumer behavior, regulatory requirements, and local business culture. That's why working with a business expert may help you get competitive intelligence and fly to new heights.

Tetra Consultants provides business consulting services in the UAE to help your company develop and thrive. Our staff of highly trained financial, commercial, and business experts can help international investors enter the UAE market. We'll walk you through the process and advise you on the compliances and regulations you'll need to follow in order to conduct business in the UAE effectively. Our service package with regards to the incorporation of company in Dubai, UAE includes reserving of trade name, preparation of supporting legal documents, registration of company with the Dubai Department of Economic Development (DED), opening of corporate bank accounts, and assisting in tax and accounting obligations.

Contact us to find out more about how to start a business in UAE. Our team of experts will revert within the next 24 hours.