Factors To Consider Before Opening Your UAE Business

Know How to start a business in UAE free zone and factors to consider before your company formation.

The UAE is known to attract expats from all over the globe due to the opportunities they offer to budding entrepreneurs, start-ups, or corporates. Though the business-friendly atmosphere of the country attracts many, new start-ups, they may find it challenging If they are not well versed with the procedures and workings of setting up a business in the UAE.

This article explores the key factors that every UAE-based entrepreneur needs to consider before establishing their business set-up.

1. Business Set-up Costs

Capital investment is the bloodline to starting your new business. Starting a small business in the UAE involves operational costs, government fees, location-based payments, business licenses, visa and immigration, and other business expenditures. Understanding the amount of money you will need to start and run your business and arranging for it, can make the initial period of your newly set-up business flow smoothly.

2. Regulations and Paperwork

The UAE is known to be one of the best countries to start a business in due to its robust legal structure. With easy-to-understand laws, starting a small business has never looked simpler. However, you should be aware of the legalities involved in starting a business. Though documentation may not be as tedious as with other countries, failure to comply or fill out the right paperwork can cause a huge setback in establishing your new business. Some of the regulations and paperwork that you’ll need to keep in mind are as follows:
1. Economic Substance Regulation (ESR)
2. Anti-Money Laundering Regulations (AML)
3. VAT registration
4. Bank Account Registration and related paperwork
5. Business and Trade Licensing

3. Set-up Location and Jurisdiction

Locations to set up your business in the UAE can be broadly categorized into three jurisdictions:
1. Mainland
2. Free Zone
3. Offshore

The location you choose will correspond directly to the type of business you plan on starting. If your business taps into a more local market, you should select a mainland location. Free zones are a lucrative option for businesses that tap into foreign markets or larger industries. It’s an attractive option since it allows for 100% foreign ownership and has a lot of additional benefits. SPC Free Zone is a free zone wherein ownership benefits, consulting aid and export import exemptions amongst other advantages are provided to those who choose to set up their business there.

4. Ownership Options

Selecting the right ownership structure will define the probability of success of your business. The most common form of ownership structure is currently Limited Liability Company, though many are shifting to free zones like SPC Free Zone due to the 100% foreign ownership privilege, negating the need for any local sponsorship.

5. Recruitment and Employment Procedures

Employing staff is one of the most important steps in establishing your small business. Before starting the recruitment process, do some research on the talent pool available for the roles you plan to hire for, and any legalities involved in that process. Many industries need to follow employment quotas, like hiring a certain percentage of locals. If you plan to hire expats as well, the application for the same as well as relevant paperwork needs to be sent to the MHRE and the GDRFA in your local emirate. If your business is set up in a free zone, you’ll have to apply directly to the local authority within the free zone. There are many more regulations involved in hiring employees, so make sure you keep a note of the number of staff required, the jurisdiction in which you operate and other industry specific employee-based regulations.

Our team at SPC Free Zone has many years of experience within business setup and helped over 500+ businesses start and succeed in the past couple of years. The advantage of working with an experienced busines setup partner is they will be able to advise the best business setup solution for your business while making sure that your new business fits within the UAE Rules & Regulations. Contact us today at 800-SPCFZ to understand how we can help your dreams come true.

Afreen Razak

Meet Afreen Razak, a seasoned marketing professional with a strong emphasis on content writing and a decade of experience in the industry. With a specialization in social media, brand development, and digital marketing, Afreen possesses a well-rounded skill set that drives impactful marketing strategies. With her exceptional content writing skills, Afreen crafts compelling narratives that captivate audiences and align with brand messaging. She has a keen eye for storytelling and knows how to leverage persuasive language to engage and convert target customers. Her proficiency in crafting SEO-friendly content ensures maximum visibility and organic reach.

One Reply to “Factors To Consider Before Opening Your UAE Business”

  1. This blog post is spot on. I totally agree with your opinions and find them well-articulated. Keep up the good work!

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