5 things no one tells you about starting a business in the UAE

It’s a well-known fact that setting up a business in the UAE is fairly easy, and the process is one of the simplest in the world. With the country’s business-focused outlook, the benefits of starting a business here are plenty – amazing infrastructure, low taxes, free zones, strategically beneficial geographic position, to name a few. However, there are a few things that people typically only realize once they’ve started the process of setting up their business. In this article, we uncover some of the things no one really tells you about starting a business in the UAE.

1. Administrative work

The legalities and paperwork involved in starting a business aren’t talked about as much as the glamorous, fun part of starting new ventures. However, it’s one of the most important aspects of company formation, and neglecting it can result in hefty fines and other negatives. You will need to understand exactly which authority to approach, and the relevant paperwork and licensing required to start operations smoothly.

2. Finances

More often than not, entrepreneurs underestimate how much they need to invest in their new business. The initial costs involved in a company set-up can reach astronomical heights, and not being prepared for these expenditures can pose a huge setback for your organization. Licensing alone can cost up to 10,000 AED, and adding up additional annual costs and infrastructure investments can cause a major financial strain to your business’ bank account, if you aren’t prepared for it. Accounting for these expenses before you enter into the field of business is the best way to mitigate the risk of financial failure.

3. Culture and Values

The UAE is in a particularly unique situation, wherein the number of expatriates significantly outnumbers the locals within the country. This means that there exists multiple cultures and values due to the various nationalities within the country. This mix of various cultures makes the country’s environment diverse in nature, making it crucial for companies to establish a corporate environment that respects all cultures equally. The most successful organizations harbor an environment of understanding and communication. Before you start your business, you will need to understand the cultural needs of your potential employees and prepare to foster those needs effectively.

4. Ownership and legal structure

The most well-known and common form of ownership structure is the Limited Liability Company, wherein part ownership (at least 51%) is given to a local sponsor. However, there are many other forms of business structure that are slowly gaining speed within the country. Some of these forms are as follows:

a. Sole Proprietorship: This form of organization is only available to UAE and GCC nationals and gives the entrepreneur 100% ownership.
b. Civil or Professional Company: Doctors, Lawyers, Accountants, and other professionals can open this type of business. Similar to an LLC company, this form of business structure requires a UAE national sponsor to hold at least 51% of business ownership.
c. Free Zone Company: Businesses that choose to set up operations within a free zone come under this category. Similar to other free zones, SPC Free Zone offers 100% business ownership to the entrepreneur, without the need for a local Emirati sponsor.

5. Finding the right location

Choosing the right location to conduct your business is harder than it seems. Selecting a substandard location can result in heavy financial losses. There are a variety of office spaces available in the UAE. Traditional workspaces, co-working spaces and even spaces offered by free zones are available for new company set-ups.

Starting a business in the UAE doesn’t have to be challenging. Our experts at SPC Free Zone can answer all your business needs. With our easy set-up process, everything from licensing and visas to ownership perks is only a click away. Call us at 800 SPCFZ to get in touch with our experts today.

Start Small. Dream Big. Grow Faster.

SPC Free Zone offers a wide range of business support services as a one-stop shop solution for your business needs.