Setting Up a Business in Dubai: Myths vs Facts
Dubai is known for many surprising world records. Be it the tallest, largest, biggest, best, one of a kind – Dubai is full of these. Actually, these adjectives do not only concern the economic and technological miracle that has happened in the United Arab Emirates (UAE) over the past 50 years but are also connected to creating the best investor-friendly environment for foreign entrepreneurs.
Notwithstanding this fact, due to the lack of knowledge, still there are many myths about Dubai that prevent foreign investors from choosing this city as a primary destination for setting up their new businesses. Leveraging over 12 years’ experience of management consulting in the UAE market, we decided to dispel the most common myths about life and business in Dubai.
Business Setup in Dubai is very expensive
The fact is, you need capital investments to start a business in any country, but when you start counting how much it will cost to set up a company in Europe (with its huge taxes), Russia (with its long approvals), and the United Arab Emirates (with its preferences for any business type), you realize that business heaven exists and it’s in the UAE. Thanks to the diversification of the economy, starting a business in the Dubai is much easier and cheaper than, for example, in Europe.
For example, here are some typical numbers for three popular niches:
- IT business. To open an IT company in the best UAE Free Zone, you will need on average from USD 7,700 to USD 14,000.
- Beauty salon. Licensing fees will be around USD 8,700 and the rent of premises in the best district of Dubai starts at USD 17,700 per year
- Trading company. Starting a trading company will cost you from USD 7,700 to USD 14,200.
You can set up your business quickly and may not need excessive capital to open a company in Dubai, which distinguishes the UAE from Europe or the CIS region. At the same time, there are no illegal fees involved and the UAE is a tax paradise for most business types. There is simply no income tax, VAT is as low as 5% (and not all areas of activity are subject to it), there is no corruption and bureaucracy.
Business Setup in Dubai is complicated
This myth says that it’s much harder and takes longer for foreigners to set up a business in Dubai than for locals. Let’s have a look at the numbers again.
95% of all companies in the UAE are SMEs, according to official statistics. The second fact is that 89% of the population are foreigners (non-UAE citizens). So, if you compare facts, you’ll understand that the majority of companies in the country are founded by foreigners who are engaged in SME sector.
To break the myth about complicated procedures you should be aware that there are 3 simple, basic steps involved in company formation in Dubai:
- Get your Dubai Business License.
- Obtain your UAE Residence Visa.
- Setup your Dubai bank account.
Local legislation reliably protects foreign investors and simplifies their everyday activities because foreign investment for the UAE economy is so very welcomed. To set up a business in Dubai you need from 1 to 4 weeks, a properly prepared set of documents, and knowledge of procedures, or you can hire experienced business setup consultants in Dubai to do it all for you.
You need a local partner or you will not be able to start a business in Dubai
Many foreigners think that in order to obtain a business license in Dubai, you need to partner with the UAE citizens. But what is not yet common knowledge is there exist over 60 Free Zones in the UAE where you can register your company and enjoy 100% ownership! A “Free Zone” is considered the simplest and most advantageous option for a foreigner. And despite common misconceptions, Free Trade Zones are very often located right in the city center and not in the desert. It is also possible to obtain a professional license: prove that you are a professional in your field and you will also own 100% of the company.
Working and doing business in UAE is impossible for women
Dubai is one of the most liberal cities in the Middle East region and, hence, a popular destination for businesswomen from all across the globe. There is a great opportunity for career advancement and setting up a business combined with the perks of tax-free income, making the prospect of working in Dubai more appealing, even for women.
Here are some interesting facts:
- Around two-thirds of the public-sector jobs in the UAE are filled by women.
- Women-owned businesses contribute to about 10% of the total value of the private sector.
- UAE is the first country in the world to make it mandatory for corporations and government agencies to include women on their Board of Directors.
- About 20% of the diplomatic corps in the UAE are women.
- 23,000 Emirati businesswomen run projects worth over AED 50 billion and occupy 15% of the positions on the boards of chambers of commerce and industry nationwide.
Women here have been in senior positions in international corporations and major government posts for a long time. Women are starting businesses, driving cars, and getting an education, as the UAE is ranked as a leading country in gender equality in the region, according to the World Economic Forum’s 2018 Global Gender Gap report.
You should know Arabic to fit into the UAE business society
In the UAE, you will work with people of hundreds of nationalities and religious beliefs and everyone wants to find a common language, so English has become that language.
In Dubai, for example you will always be able to get along if you have at least a basic command of English: all street and indoor signs and official documents have been translated into English, and newspapers, websites, radio, and television largely communicate in English. When you make a call to any company, you will be answered in English in 99% of cases.
Yes, the laws in the UAE may seem strict for newcomers, but they are enforced for the good of businesses and people. After all, how else can you make over 200 nationalities live in peace, especially when such huge amounts of money are involved?
Dubai is one of the safest places in the world just because the law works so well. Here, you can walk around wearing diamonds at 3:00 a.m. and no one will disturb you. You can leave your iPhone on the bench and no one will steal it. Dubai’s rule: as long as you respect the law, you live in peace and wealth.
Thus, it looks like the myths about the United Arab Emirates are being created and held by people who have never been there or simply do not know the facts. And the facts prove that it is 100% easier to start a business with one of the competent business consulting companies in Dubai than in Europe, and everything can be done remotely.
The UAE is a tough world of international business, but one that is easy to enter. However, not everyone can stay afloat among ambitious professionals and big money from around the world. That’s why a business consulting company is useful to help you with your business plans.
An honest business in Dubai, as everywhere else, has one path: take risks, invest, and work hard. And if you manage to adapt to the frenzied rhythm of Dubai, find a common language with 200 nationalities, build work processes properly, withstand competition, and expand your business, you can do better in the Emirates than anywhere else.
Leveraging over 12 years’ experience on the market of UAE we at My Business Consulting DMCC will be glad to assist you with your business plans. To obtain further information in a fast and professional way, reach out to us for an expert advice: [email protected] or contact our Business Setup Experts directly via WhatsApp +971 55 147 9576.