Business setup in UAE can be complicated as there are thousands of activity licenses and several different jurisdictions for entrepreneurs and investors to choose from. A lot of jurisdictions also offer packages such as office space with visas and certain business activities.
In the UAE, each emirate has its own legal registration jurisdiction and each free zone has a local authority. It certainly can be confusing and time-consuming to navigate! In order to provide you with direction, we’ve compiled the factors that you should consider when it comes to UAE business setup. Let’s start!
Picking the Right Jurisdiction
There are so many free zones spread across UAE with over 30 based in Dubai. Every single one of the free zones abides by local regulations and geographic boundaries. Each of them also offers a favorable environment with regards to the implementation of certain business activities. Jebel Ali FZ, for instance, has a seaport which means it is ideal for logistics companies and distributors. A low cost jurisdiction like Ajman is ideal for a small enterprise or startup. There’s a common feature among all free zones and that is its attractiveness to foreign investors which prefer having their business owned fully by an expatriate.
Understanding a Trade License
It’s illegal for a business to operate in the UAE if it does not have a proper license. The most common business structure or corporate vehicle utilized by companies in the UAE is a Limited Liability Company or LLC. A LLC is more commonly used for entrepreneurs and investors that are from abroad and want to establish joint entire operations with UAE nationals. When it comes to costs, expect them to vary. An LLC, for example, can range anywhere between AED 5,000 to 60,000. In order for you to save resources and yourself from legwork, a firm that offers business setup in UAE will be able to help you with the process and also provide advice regarding the kind of licenses and the business structure that would be best for the nature of your business.
Take note: it is absolutely crucial for entrepreneurs and investors planning to undergo business setup in UAE to consult with business setup experts as mistakes in the process can result to the denial for business registration by authorities.
Hiring the Correct PRO
Businesses can apply for the residency visas of employees and administration. But, the number of visas that will be issued will depend on a lot of factors like the size of premises utilized by the business, type of business, category of each employee, as well as the investor. It’s crucial for a business to track the number of staff members it wants to retain and provide sponsorship for a working visa.
A business should also remember that most paperwork required by the government is in Arabic. This means it is best to hire a PRO that also offers in-house translation to save you from hurdles that are associated with UAE business setup. Also, it is best if the PRO offers efficient turnaround times as it is likely that you want the process to be completed as soon as possible. In addition, make sure that the service provider offers a one-stop shop for opening of bank accounts for the newly established business as well as all other required administrative tasks.
Defining Expectations of Entrepreneurs
Timeliness is important when you are starting a new enterprise. But, one must remember that delays are always not the fault of anyone as approvals will entirely be up to the government authorities. There may also be unexpected paperwork that the government authorities want the business setup applicant to comply. Make sure that you add delays to your expectations with business setup in UAE and be flexible so you will prevent financial implications for delays.
This is also where the relationship of a PRO with government authorities comes in. If the hired PRO has an established relationship with regulators in the country, it may not instantly mean approval of application but it can hasten the process a bit. It may also provide a higher chance for the business to get approved. But, remember that not all PROs are alike. Choose one that is reliable and reputable.
Making sure the Marketing Plan is Tailored to a Customer Base
Dubai, in particular, enjoys a rare stance compared to other cities as the landscape for business is rich with different cultures, professional practice areas, and languages. There is a need to make sure you’re reaching the target customer base of the business through the selection of media according to the preference and interests of customers. Business setup in UAE means the PR plan of the business, advertising budget, and any other marketing activity, are to include the correct channels.
If you want to know more regarding business setup in UAE, call us here in FAR Consulting Middle East!