Dubai has been a booming business capital for years and shows no signs of slowing down. From man-made islands to towering skyscrapers, this is the city where entrepreneurial dreams can come true. If you are considering starting a business in Dubai, read below for an in-depth guide to what you need to know beforehand.
Market Research and Competition
If you are unsure what kind of business you want to start, you must first become familiar with all the types of businesses already established in Dubai. This will help you determine what businesses are thriving and what kinds of businesses residents are most drawn to. You can do this through market research like sending out surveys to Dubai residents and spending time in the city to get a better feel for current trends and interests in the city.
Once you choose your type of business, it is also important to check out the competition to see what they are doing well and what they are not. This will help you come up with a business plan that fills in the gaps that other similar businesses don’t fill. There is always a way to draw new customers to your business if you take the time to understand what your target audience wants and needs.
Choose the Right Business Structure
Although your business will be based in Dubai, there are three different structures you can choose from to best suit your goals. Read below for more information.
Mainland Company
This business structure option allows you to find a physical location for your business in the city of Dubai or anywhere in the UAE. The catch is that you need to find a local sponsor or service agent who will support you as you start your business. If this is something you are interested in, you can hire an expert team that is local to Dubai that can help you get your business started. They can work with you to set up your business with financial advisors, tax experts, and local business experts so that you will have a full picture of your business’s potential from the beginning.
Free Zone Company
Unlike a mainland company, you can start a business that has 100% foreign ownership with this option. Free zone companies do not need local sponsors and they are known for being the easiest and most cost-effective type of business to start in Dubai. With this type of company, you may also be eligible for full residency in the UAE as well, which is a highly coveted perk.
Free zones are classified as economic areas where goods and services can be traded, specifically in the international market. If you choose to go with this type of business, you will have access to benefits like low tax rates, preferential customs duty rates, and total import and export tax exemption.
Offshore Company
An offshore company exists as a legal entity and is located in a jurisdiction outside of the country where most business operations occur. Business owners who want to open a business in Dubai but have obligations in other parts of the world can start an offshore company in their home country but the travel to Dubai as much as needed to conduct business. The company will still technically exist in Dubai but much of the operations will be conducted elsewhere.
The benefits of this kind of business include tax optimization with the freedom to choose where your business will be taxed, asset protection, privacy, and simplified regulatory requirements. Many people choose offshore companies for asset holding and management, confidential transactions, and international trade and investment.
Legal and Licensing Requirements
Every business started in Dubai must be registered with the Department of Economy and Tourism or the relevant free zone authority. When you start your business, you will also need to obtain a trade license of some kind. Usually, these licenses fall under the categories of commercial, professional, or industrial. Depending on the business activities you will be conducting, you may need to get additional approvals from sector-specific authorities.
Visa and Residency Permits
If you are not a native of Dubai, you will need to find a way to obtain a visa or residency permit for yourself so that you can stay in the UAE to conduct your business. One way to do this is to apply for an Investor Visa if you an an entrepreneur or plan on investing a lot of money into the Dubai economy. Once you build your business, you will also need to obtain visas or residency permits for your employees.
Dubai is a hub for investors, entrepreneurs, and other kinds of business people, so starting a business there means there will be endless opportunities to network and grow. Remember to consider these steps before diving into a business venture in one of the top business capitals of the world.