Starting a business takes courage. It requires a leap of faith to leave behind the comfort and stability of a regular job to pursue your dream and turn it into reality. That’s because launching a new business isn’t easy. Success depends on hard work, dedication, and perseverance.
If you’re ready to take that leap and start your own company, Dubai is a great place to do it. According to startupgenome, Dubai is one of the world’s top 20 ecosystems for startups. And with over 350,000 startups and small and medium size enterprises (SMEs) already operating in Dubai and the wider UAE, what are you waiting for?
Helping you take the leap
Starting a business in any new country can be daunting, especially if you’re not familiar with the local laws and regulations. Whether you’re a first-time entrepreneur or an experienced business owner, this blog post will help you take the leap to starting your company in Dubai.
The first thing to say is, you’re not alone. Many entrepreneurs consider starting a business in Dubai. With its strategic location, supportive government policies, and business-friendly environment, Dubai is a thriving hub for startups and entrepreneurs from around the world. However, from company registration and licensing to networking and building a team, there are many factors to consider when starting a new business here.
But this isn’t a how-to guide. Instead, if you’re ready to take the plunge and start your own company in Dubai, this blog post gives you valuable insights into potential challenges and opportunities that come with launching a new business in the UAE – and where to get the best support.
Following in famous footsteps
There are a number of successful entrepreneurs who’ve already made the leap from paid employment to founding their own businesses in Dubai or the UAE.
Abdelrahman Fahmi is the co-founder and CEO of MaxAB – a B2B e-commerce platform for the food and grocery industry. Prior to founding MaxAB, Fahmi worked as an investment professional for companies such as Citadel and the International Finance Corporation.
Another great example is Ahraf Sheet. The co-founder and CEO of Swiffi – a mobile car detailing and maintenance service – worked as a software engineer for companies like Google and Careem before starting the company.
Other employees-turned-entrepreneurs on the list include Ankit Yadav – the co-founder and CEO of Grocemania, a same-day grocery delivery platform; Hassan Albalawi – the co-founder and CEO of Lamsa, an edtech platform for children; and Rami Shaar – the co-founder and CEO of Qafila, a digital freight forwarding platform.
These individuals and their respective startups demonstrate the growing entrepreneurial spirit in Dubai and the UAE, as well as the potential for success for those who transition from employee to entrepreneur.
Why Dubai is a great place for startups
Dubai attracts entrepreneurs, business owners, and investors from all over the globe. There are many reasons why people choose to do business from Dubai.
The city’s location – between Europe, Asia, and Africa – makes it ideal for businesses that want to reach markets in these regions. For international entrepreneurs, it’s good to know that Dubai is a cosmopolitan city with a diverse population from all over the world. This gives businesses an advantage when it comes to building a multicultural team and getting the right people to tap into global markets.
The UAE government provides strong support for entrepreneurship and innovation, establishing several initiatives and programs to encourage startups and create a favourable business environment. It has a simple and efficient process for business setup with minimal bureaucratic hurdles, and streamlined procedures. This makes it easier for startups to get up and running quickly.
On top of that, several government-funded programs provide additional funding and support to startups. The favourable tax regime also appeals to businesses looking to minimise their tax liabilities with competitive rates of personal income tax, corporate tax, and value-added tax (VAT).
Dubai has a thriving ecosystem of investors and venture capitalists that are willing to invest in startups. It also has state-of-the-art infrastructure, including modern office spaces, high-speed Internet connectivity, and advanced transportation networks – ideal ingredients for business growth.
What you need to know
Successful startups are well-prepared. They know what to watch out for and what to have in mind as the business takes flight.
Company formation and licensing is one of the areas you’ll want to get right from the get-go.
Dubai has a list of business activities that require special permits and licences, so you need to make sure that your business activity is allowed and regulated by the relevant authorities.
When you know the applicable and permitted business activities, you’ll need to choose the right legal structure for your needs. This could be a sole proprietorship, partnership, limited liability company (LLC), or any other recognized form of business structure.
Your business will also need a trade name. It must be available and compliant with the regulations set by the Department of Economic Development (DED). Alongside your business plan, feasibility study, and other required documents, you’ll need to obtain initial approval from the DED. Once approved, it’s advisable to open a bank account, so your business can start to carry out financial transactions.
With these things in place, you’ll want to find suitable business premises and get them registered with the authorities. This is likely to involve obtaining a tenancy contract, and registering with the Dubai Municipality. If you plan to hire employees, you’ll also need labour cards and residency visas for them.
Due to the complexities of setting up a new business, it’s worth hiring a business consultancy service with local knowledge and expertise who can steer you through the initial setup and growth of your business.
Important considerations
When starting any new business – whether at home or abroad – there’s always a lot to consider. If you’re planning to start a business in Dubai, here are three important things to bear in mind:
1 Trade licences
To legally operate your business in Dubai, you’ll need a trade licence. Issued by the DED, it’s essentially a permit that authorises a business to carry out its specific activities within the emirate. The trade licence specifies the type of activity the business is authorised to perform, the location of the business, and the legal structure of the business. It also indicates the ownership of the business, including the name of the owner, partners or shareholders.
There are three main types of trade licence:
- Commercial: Issued to businesses engaged in commercial activities, such as trading or buying and selling goods.
- Industrial: For businesses that engage in industrial or manufacturing activities.
- Professional: Needed by businesses that provide professional services, such as consulting, accounting, or legal advice.
2 Tax and accounting
Dubai does not have income tax. However, there are other taxes and accounting rules with which businesses must be compliant. Here’s a list of the main ones for businesses in Dubai:
- Value Added Tax (VAT): Since 2018, all businesses in Dubai that meet the threshold of AED 375,000 in annual turnover are required to register for VAT and charge 5% tax on certain goods and services. Businesses must also file VAT returns and pay the tax collected to the Federal Tax Authority (FTA) on a regular basis.
- Customs Duty: Businesses that import or export goods in Dubai are subject to customs duty, which is a tax on imported and exported goods. The rate of customs duty varies depending on the type of goods and the country of origin or destination.
- Social Security Contributions: Businesses in Dubai are required to make social security contributions on behalf of their employees. These contributions are calculated as a percentage of the employee’s salary and are paid to the General Pension and Social Security Authority (GPSSA).
- Accounting Standards: Businesses in Dubai are required to maintain accurate and up-to-date accounting records, including financial statements and transaction records. These records must be prepared in accordance with the International Financial Reporting Standards (IFRS) and must be audited by a licensed auditor.
- Economic Substance Regulations: In 2019, Dubai introduced the Economic Substance Regulations (ESR), which require certain businesses to demonstrate that they have a substantive presence in Dubai and are carrying out real economic activities. The ESR applies to businesses engaged in specified activities, such as banking, insurance, and intellectual property
3 Recruitment
Dubai’s talent pool is made up from a diverse and international population. However, that doesn’t mean sourcing and recruiting the right talent for your business is any easier! You still need to know the best places to look. Try these:
- Job portals: Sites such as Bayt, GulfTalent, and Naukrigulf can advertise your job vacancies and attract a wide range of candidates. They enable you to filter candidates by job title, skills, experience, and other criteria to help you find the best fit for your business.
- Job fairs and networking events: These are great places to meet potential candidates and learn about their skills and experience. Attending these events can also help you build a network of contacts and identify potential hires.
- Recruitment agencies: Dubai has many recruitment agencies that specialise in different industries and job roles. These agencies can help you find qualified candidates and assist with the recruitment process, from screening and interviewing to background checks and visa processing.
- Social recruiting: Social media platforms like LinkedIn, Facebook, and Twitter can be useful tools for finding the right talent in Dubai. You can search for candidates with specific skills or experience, post job vacancies, and engage with potential candidates.
- Networks: Your personal and professional network can be a valuable source of talent. Let your contacts know that you’re hiring and ask for referrals or recommendations.
Business support and services
Dubai offers a range of business support services to local and foreign companies looking to establish or expand their presence in the city. Here are some of the main providers:
- Dubai Chamber of Commerce and Industry offers a wide range of services to businesses, including business registration, legal and regulatory advice, market research, and networking opportunities.
- The Dubai Department of Economic Development (DED) is responsible for promoting economic activity in Dubai and has a range of services for businesses, including company registration, licensing, and economic research.
- Dubai Silicon Oasis Authority (DSOA) is a technology park offering a range of business support services to companies operating in the technology sector, including licensing, funding, and incubation.
- The Dubai Free Zones Council is a government organisation that oversees the operations of all free zones in Dubai. It provides business services such as company formation, licensing, and regulatory support.
- Dubai Entrepreneurship Academy offers a range of training and development programs to entrepreneurs and small businesses, including courses on business planning, marketing, and financial management.
Final thoughts on getting started
Dubai or the wider UAE is a great place to start a business. Although there are important steps to complete as part of business setup, basing your business out of Dubai enables you to leverage a range of world-class business services, a thriving startup ecosystem, and a number of government initiatives that help small businesses land and expand.
