Though business in Dubai is booming, its entrepreneurial landscape has changed significantly in recent years. In spite of the several initiatives to help develop new businesses by increasing regionally focused efforts and investment opportunities from global funders, several challenges about infrastructure, finance, and people remain. To realize the full potential of entrepreneurs in Dubai and help them become successful, there is a need to address these challenges. Let us try and understand what some of these challenges are.
Top 10 Challenges Faced by New Entrepreneurs in Dubai:
- Limited Access to Funding:
- Lack of funding is the biggest hurdle to starting a new business in Dubai. The top challenges are – access to capital and lack of financial support from banks. Many banks and investors fail to understand the startup business model and the need for long-term investment.
- Different sources of funds, such as venture capitalists, business accelerators, angel investment networks, and crowdfunding platforms, are often insufficient for entrepreneurs’ needs.
- Even when funding is approved, it takes several months for the funds to get credited to the bank account.
- Need for a Local Business Partner
- To form a Limited Liability Company (LLC) or an onshore company in Dubai, you need to have a local partner who is a UAE National.
- Also, finding a reliable and trusted partner becomes a major challenge.
- Minority Company Ownership:
- The entrepreneur can have only 49% ownership and the local partner has 51% ownership of the company.
- Even in a free zone, you cannot deal with the local UAE market without a service agent or distributor.
- Language Barrier:
- In Dubai, everything is in Arabic and foreign entrepreneurs who are not proficient with the language, find it hard to go through the business process setup alone.
- High Competition:
- Entrepreneurs need to constantly focus on quality and continuous innovation to ensure increased efficiency in business and to stay ahead of the competition.
- Stringent Legal and Governmental Regulations:
- Many entrepreneurs find it hard to understand government regulations, ownership structures, legal and compliance frameworks.
- The fees for business registration and licensing are high.
- The tax and business laws in Dubai are subject to spontaneous revisions.
- Bureaucracy:
- Bureaucracy and red tape act as a major barrier to progress entrepreneurial ideas.
- Logistical Complications:
- Logistical issues include a complicated process for securing licenses, visas, and work permits.
- Lack of Good Talent:
- Non-availability of skilled and technical staff is a challenge in Dubai.
- Moreover, the cost of acquiring qualified and skilled personnel is very high.
- Cultural Differences:
- Due to Islamic values, there are cultural challenges that affect daily life and business.
- Dubai business culture is all about networkers and you need to make yourself known on a personal level before you can form a business relationship.
With so many challenges to face, entrepreneurs should seek professional help for their start-up’s. Business startup consultants like Creative Zone can assist you with all the requirements in setting up your new business in Dubai. Creative Zone is the largest consulting company for business setup and support services in Dubai. Call 800 LICENSE (5423673) or fill out the online form to schedule a free consultation with one of our Business Advisors today!
