How to Start a Business in Dubai

For years now Dubai, and the United Arab Emirates as a whole, have been attracting the most successful western businesses. This is partly due to its strategic location and partly to business-friendly practices instituted by the UAE government.

It’s important to note that that starting a business in Dubai requires a business owner to jump through hoops that are a bit different than the ones they might be used to. The basic principles however, remain the same; a business owner should rally on their lawyers, tax accountants and financial advisors in the early years of doing business more than ever.

Jurisdictions

The first thing to do when setting up a business in Dubai is to choose a proper jurisdiction. The country is divided in jurisdictions because the government is trying to promote industries located in the particular parts of the country and to prevent competition between different areas.

This is done via tax incentives and other governmental subsidies. Choosing the right jurisdiction therefore means you might get a head start on your competitors especially in regards to how you’re taxed and how easily you get access to governmental resources.

A local partner

You’re obligated by law to have a business partner if you’re working outside the free zone, which is a business-friendly jurisdiction. The partner needs to be a local company founded and based in Dubai. This partner will technically control the business. They will own the majority of your company’s stocks.

The partner can be another business or an individual you trust. They don’t need to contribute to the business in terms of providing their own funding if you don’t need them to. This law is currently being revised and it will probably be changed soon, since the country is looking for ways to encourage foreign investments.

Have enough money

When you set up the company you’ll need to prove to the government, that you have enough money to operate in Dubai. There are no small- or medium-sized businesses in the UAE and every company needs to have a set minimum of funds to be able to operate in the country in the first place.

The amount you need to have on your account depends on the type of work you’re in and the state you’re based in. It’s technically used as insurance but you can usually withdraw the money after a while.

Approving business activities

The business activity you plan to start needs to be approved by the government. It’s a good idea to ask around about that process before you make any investments because this isn’t a formality. There are certain business activities that are banned in the UAE and there are some that are restricted.

There’s also a process of choosing the company name which is more complicated than it is in the West. The government can refuse to set up a company if they don’t like the name you’ve chosen.

Cultural differences

In the end, it’s important to state that there are significant cultural differences between Dubai and the western world. This may sometimes seem like a minor issue, especially because the UAE looks and feels like a modern and vibrant country. They are just that in many ways, but still those who come from secular countries might experience a bit of shock.

It’s useful to have a cultural translator on board that will help guide you through the process of establishing a business in a new and strange environment. It’s been done for years and there are many western businesses thriving in Dubai but it takes time to learn how to adapt to it.

Starting a business in Dubai can be a lucrative idea. It’s a complicated process and you’ll need someone to guide you through the legal and cultural rules that are different than the ones in the West.