Entrepreneurs around the globe are always on the lookout for good business opportunities that they can turn into viable businesses in the long term. Dubai is one of the best grounds for small business owners and entrepreneurs as it offers them a lot of value in terms of business connections, business support, and much more.
One of the biggest advantages of starting a business in the UAE as a whole is the flexible tax structure. It’s especially noticeable in Dubai where the tax regime is a considerable draw, levying zero percent on both personal and corporate incomes. UAE’s strategic location has also a huge part to play in convincing people to join them for business ventures, which has helped the country’s economy in the last decade.
Dubai has established itself as a business hub, moving away from its primary specialty of oil and petrochemical industries. This change has helped strengthen the economy of Dubai and businesses lay at the heart of it.
If you are looking to start a business of your own then you are at the right place because we will be discussing different opportunities and areas on which you should be focusing to make the most out of it.
Tips on Starting a Small Business in Dubai
When it comes to laying down the blueprint for a business, it can be a tedious task. However, Dubai has made it easier for people to achieve that goal by simplifying the processes.
Here are some tips that you need to consider to maximize your chances of making your business a success.
Look for Sponsorships
There are a number of things to look out for while starting a business; from obtaining different permits, figuring out the type of office space you want to go for, furnishing it, getting office furniture and equipment, paying the salaries of all the staff members, leveraging social media for brand awareness and promotion, and things along those lines. All of this is an expensive affair, it takes a lot of money to fund these things which often means you would need to look for a like-minded partner for your business or the venture. The other option to overcome the financial problem is taking a business loan. If you are a UAE resident then taking a bank loan is not a concern because most banks in Dubai and UAE do not require collateral, the repayment plans are flexible, and the loan application forms are easy to fill out too.
Dubai enables all foreigners 100 percent ownership under the commercial companies law. The drawback, however, is that you will require substantially higher deposits which might prove unrealistic. Under such a circumstance, you can find a local partner if you are looking to do a business in Dubai Mainland. The partner essentially acts as a service agent who will charge you a nominal fee on a mutually agreed upon yearly fee.
Documentation for Small Business Setup
The documentation is arguably one of the most important steps involved when it comes to things such as company registration. Although Dubai and UAE have made the company registration extremely easy and straightforward, the applications are often rejected due to incomplete or wrong submission of the documents.
This process requires a number of government agency inspections, their approval, then issuance of various permits which are required of you to successfully run your business operations. The most important document of all is the trade license, which is issued by the Department of Economic Development (DED) or the independent free zone authority where your business is supposed to be set up. Based on the free zone, the respective free zone authority will change as well.
Some of the basic documents that are must require are as follows:
- In-depth business plan highlighting your goals and vision for the company
- Complete documentation of forms from relevant government
- Memorandum of Association (MoA)
- Certification of your trade name registration
- Initial approval certificate
- Shareholders need to provide NOC, if applicable
- Passport copies of all the partners
- Copies of visa page
- Emirates IDs
- Copy of tenancy contract, also known as Ejari
Setting a small business in Dubai can be a daunting task if you don’t get enough guidance. Depending on the nature and the type of your business, your submission of formal permits will vary.
There are six different types of licenses for businesses operating in Dubai. You will require one of the six based on your company’s operations and its type.
- Commercial License
- Logistics, car rental, real estate borage, etc
- Industrial License
- Food, textile, metals, equipment, and engines, petroleum products, paper, etc
- Professional License
- Carpentry, consultancy services, beauty salons, computer shop, repair services, etc
- Tourism License
- Hotel renting, tourist camps, cruise boat rental, restaurants, guest houses, travel agencies, etc
- Agricultural License
- Cultivation and have a station of crops, trading of pesticides, installation of greenhouses, agricultural consultancy, etc
- Craftsmanship License
- Plumbing, carpentry, electrical work, etc
Based on your business, you will require one of the licenses mentioned above. However, that is not the only thing you will require. You will also need different permits from relevant departments to be able to comply with the rules completely. For example, opening a restaurant in Dubai will require you to have a trade license from DED or respective free zone authority or DTCM. Another additional thing you will need is the food and safety license issued by the Department of Food and Safety. Lastly, you will need a NOC from the Dubai Municipality.
The aforementioned example was stated to showcase that there is more than just getting the desired license.
Assess Location of Small Business Setup in Dubai
Your office, store, or shop location will always have an impact on your brand value, which is why this is an important aspect to focus on. Whenever a business is looking to start its operations, they typically reserve a set amount for the office/store expense because it is an integral part of the business. There are different areas that support different business activities and categories of business. For instance;
- Sheikh Zayed Road and Business Bay: Premiere corporate offices
- Dubai Healthcare City: Speciality clinics and hospitals
- Media City: International media companies
- DIFC: Hub of financial institutions
Similarly, many other places house different companies with completely different business activities. However, there are other things you should also focus on as well such as the distance of your business from public transportation for customers and your workers, availability of eateries and convenience stores, parking facilities, and things along with those nature. Your business must have attraction value which is not only limited to your business alone.
Having a good interior can not only boost sales but also raise the morale of your workers, thus improving their productivity. The interior includes everything from decor, vibe, and pricing. Some people also prefer a personal touch, which can also be a key towards increased sales or better turnout.
Right Staff Matters for Small Businesses in Dubai
Hiring the right staff can resolve more than half of the conflicts within your workplace. You need to look for people with the same work ethic and values as you demand. As the famous quote goes, “you might not be able to hire the exact person you are looking for, but you can always fire the person you don’t want in your team.” Mistakes are part of the learning curve and hiring the wrong person is a huge problem, be quick to rectify your mistakes by replacing people who don’t meet your standards and requirements.
You should inquire about their past work experiences and ask them some hypothetical questions to get a better sense of how they are as a person, and then as a worker. Businesses thrive when it comes to expansion and managing big teams can be a tricky task.
If you do not want to put in the extra effort when it comes to hiring the right people then you should outsource this responsibility to a staffing company. The staffing company will do all the work on your behalf and you can be critical of the hirings a bit more then.
Focus on Digital Marketing
As times have changed, digital marketing has taken over the world; it has converted millions and millions of leads into sales. Advertising your business on every potentially available platform, which should also include print media as well but especially digital. It is a great idea to have an in-house IT team that can potentially help you execute your digital campaigns much quicker; be it advertisements being published on your website or running digital ads.
Similar to the advice given before, if you are short on manpower then you should consider outsourcing digital marketing as well. These professionals are highly trained and handle various clients which implies they have a lot of experience which can be extremely beneficial.
Step-by-Step Guide to Opening a Small Business in Dubai
Oftentimes people fail to keep up with too many terminologies and get lost within the mix. Here are the simplified steps and what you need to do to open a small business in Dubai:
Step 1: Select your business activities
The first step is for you to decide your business and its activities. This is the first step because if you don’t define things then it will lead to problems down the road. You need to know exactly what you want to do so you can apply for relevant permits and so forth.
Step 2: Select a company name
The second step after outlining your business activities is to choose a company name. There are some rules and regulations to be following while doing so; offensive, blasphemous, and already taken things are not allowed. So, you will need to follow some rules which are clearly stated on the authority’s website while selecting the company name.
Step 3: Free Zone or mainland?
One crucial thing which you need to decide is the set up of the company in a free zone or the mainland. There are advantages to both and it depends on the requirements and operations of your business. Free zone, for instance, offers benefits such as a quick and easy incorporation process, ongoing business support, and financial incentives such as tax exemptions and more.
On the other hand, the mainland offers different benefits such as trading directly with the UAE market and taking on lucrative government contracts, etc.
Step 4: Apply for a business license
Applying for your business license is next on the list and obtaining a license for a small business is rather very simple be it for free zone or mainland companies. You have to directly apply for your license to the DED or the Municipality in the Emirate where the business is being set up.
Step 5: Visa applications
You also need to sort out the visa problems; be it for you (if you are a foreigner) and for your employees. Yet again, this process has also been simplified so that more and more people are attracted to the idea of opening a company in Dubai. If you are a UAE resident then you can sponsor your employees, which makes the process even more straightforward; it could even be a domestic worker or a housekeeper.
The number of visas you can apply for will depend on the size of your company, your chosen setup, and things related to that.
Step 6: Corporate bank account opening
Lastly, once you have everything out of the way then one of the last steps is to open a corporate bank account. The UAE has strict regulations to prevent money laundering, which is why financial dealings need to be handled properly. The ideal situation is to hire an accountant and keep track of all the money that comes in and goes out.
For people who aren’t aware of the processes then our team at RIZMONA can help you out. Get in touch with our team of professionals and we will guide you through any process which might trouble you.