Useful Tips For Dubai Startup Business


Dubai is fast turning into a Startup hub and there is no single reason that entrepreneurs from all around the world are rushing to Dubai for setting up their businesses. Dubai is a tax haven (although the situation will slightly change after implementation of VAT in 2018) , where goods and service are exempted from taxes and duties. To setup a Dubai Startup Business, entrepreneurs are provided with immense business opportunities in the mainland, large number of free zones and even in the offshore areas for investment. Businessmen, whether big or small, are heading towards Dubai to secure their place in the area where there are lucrative business opportunities and no sane business-minded person would like to miss these chances.

But it is not a compulsory scenario that every business will thrive in any given place even if it is a business hub like Dubai. It should always be remembered that there are certain rules and regulations in Dubai that have to be followed and the Dubai government is quite strict in implementation of these business laws. Failure to abide by these rules may not only cost you financial loss due to fines but you can also face deportation from the emirate.

Another important thing to note is the reality that business opportunities in Dubai are available for everyone since 1970s. It means that you will face tough competition from the companies and businesses already settled in Dubai. It is not a simple task to make your place in such a competitive market.

Following are important and useful tips Dubai business setup that will help you startup your business in Dubai by understanding the business climate there.

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  • Mainland or Free Zone

As mentioned above, business in UAE can be set up in Dubai mainland and free zones present in Dubai. Both have their own advantages and setbacks. A business in mainland will require either a local sponsor (in case of a company) or a free agent (in case you are a professional and operating as individual entity). A local Emirati sponsor will hold 51% shares of a company (but you can sign agreement with him/her for yearly fee). There is no such issue in free zone areas and the foreign investors are allowed to own 100% shares of their company.

There are around 25 free zones in Dubai that allow business set up for entrepreneurs. But you may be confined to specific type of business in free zone (Dubai Media City, Dubai Auto Zone, Dubai Airport Free Zone are few examples), while businesses of all types are allowed in mainland Dubai. Duties are applicable for goods coming from free zones to mainland while goods from mainland to free zones are exempted from taxes.

So, we can easily say that if your intended business is related to the businesses allowed in any of the free zones and you are not supplying goods and services in mainland Dubai (i.e. you are covering import and export business), then free zone is the best location for setting up your new business. In contrast, you should setup your business in Dubai mainland if you have to sell products in Dubai mainland or if your desired business is not allowed in free zones.

  • Reduce start-up cost

Despite availability of several business opportunities in Dubai, you may have to spend lot of money even before start of your business. There are several restrictions in Dubai that are financial burden on new businesses like hiring or purchasing an office for startup, hiring a local sponsor, payment of license fee etc. You should try to minimize these expenses as much as possible. It will help you establish your business without worrying much on paying higher rent and sponsor fee at the start of every month or year.

  • Be aware of latest happenings

Rules and regulations are meant to change with time and any new investor must keep himself/herself fully aware about the latest changes adopted by Dubai government. These changes can occur generally, like the upcoming value added tax (VAT) that will be implemented from 1st January 2018 or changes can happen within rules of any specific department or free zone. Awareness about these changes in advance will help the entrepreneur choose the right type of business and know the limitations of his/her selected business.

  • Hire a Legal advisor

Minimizing unnecessary startup cost is suitable but it is not sensible on every occasion. Hiring a good legal advisor is a must when establishing a Dubai Startup Business. The legal expert will help you manage the documents to register your company, prepare right kind of agreement with local sponsor along with assisting you in solving problems that you may face later like understanding new rules and regulations. There is no doubt that spending slightly more on a good legal expert or lawyer can save you from nuisance and financial loss in initial as well as later stages of your business.

  • Know the issues related to bank account

Repatriation of profits is fully allowed in Dubai for foreign investors. But complete awareness about the bank account that you want to open is necessary because shifting from one bank to other is a strenuous process that may take lot of time and money. If you choose a bank account that charges higher rate for transactions to your desired country then it will result in regular loss of money that can hurt you especially in startup business.

Author Bio: Brenda Cagara

While Brenda Cagara got experience in setting up a business in Dubai with the top business consultants, she managed to flourish her writing career as well. In the past five years, she has emerged as a brilliant writer and writes on nearly every niche. Her office job expertise lies in business consultancy, visa processing, trade license, trade mark, local sponsoring, product registration and bank account opening. The reflection of her success in this field is often witnessed in her writing pieces written on business, taxation and finance.