Dubai is home to countless companies and startups that add up to millions of dollars to the UAE’s economy in the form of investment. This is due to the business-friendly environment that the local government has created for the businesses.
Regardless of this fact, there are certain myths that are common amongst fresh entrepreneurs and new businessmen who are looking to open their companies in the Emirates. To clear the confusion, business setup experts at Riz and Mona, having years of experience, created this piece of content. Read on to find out myths vs facts about business setup in Dubai and clear the confusion once and for all.
Myths About Business Setup in Dubai, UAE
Firstly, we will discuss some of the commonly heard myths related to setting up a company in Dubai
|Sr No.||Myth||Fact Check|
|1||Female entrepreneurs find Dubai unfriendly||False|
|2||The laws are strict||True|
|3||Having an offshore business is illegal||False|
|4||You cannot establish a business in Dubai without a local partner||False|
|5||Costly Business Incorporation||False|
|6||Dubai has a challenging business setup process||False|
|7||The legalities take time to deal with||False|
|8||Speaking Arabic fluently is essential in order to merge into the business society of the UAE||False|
|9||Finding investment is almost impossible||False|
|10||You must have business and tax law knowledge||False|
Myth 1. Female Entrepreneurs Find Dubai Unfriendly
The environment for female entrepreneurs in Dubai is very supportive. Dubai is quickly becoming the Middle East’s most active business center for women seeking to secure investment and launch their own firms.
Dubai is the ideal location to promote a good work-life balance and that is one of the many reasons why we are able to witness an increase in the number of women-owned enterprises launching here. Women can flourish in leadership roles and achieve success in doing business, thanks to the support mechanisms of Dubai and UAE.
Dubai is one of the most liberal cities in the Middle East. It is at the forefront of progressive growth. The United Arab Emirates works to make the most of its resources in order to achieve sustainable growth and to equip the next generation to tackle new problems and challenges.
Thanks to the accomplishments of the UAE, we can see proof of the commitment and dedication of Dubai toward gender inclusion and equality. It is also a primary reason why you should pick this city over any other to start your new business as a foreigner or a local resident.
Myth 2. The laws Are Strict
Yes, the laws in the UAE are somewhat tough to follow. It is true, especially for new businessmen and fresh entrepreneurs nothing surprising at all. But these strict laws are implemented to ensure people conduct their businesses in the best possible way, making it a win-win situation for the business owner and the client. A huge amount of money is involved in businesses in Dubai, so it is important to enforce the rules to avoid any fraudulent or bad activity that can break the trust of the people of Dubai.
The smooth implementation of laws also makes Dubai one of the safest places across the globe to do business. From a lifestyle point of view, Dubai is also considered a perfectly safe city as no one can dare to rob someone even past the middle of the night. You can live in wealth and peace in Dubai if you follow all the rules and regulations the right way.
Myth 3. Having an offshore business is illegal
Anyone can have an offshore business in Dubai. In fact, offshore companies are expanding with the passage of time. Offshore banking has historically been seen as a criminal activity, with members participating in bad activities like tax evasion and money laundering.
Offshoring business operations are now considered a smart move because now all investors can manage operations remotely and receive significant tax benefits. The majority of business investors choose JAFZA, Dubai as their offshore location.
Myth 4. You Cannot Establish a Business in Dubai Without a Local Partner
Many foreigners assume that you must associate or partner with a UAE local resident in order to receive a business license and launch a company in Dubai. It is somewhat true. For the mainland, you need the help of a local resident. But for working in free zones of Dubai, there is no such requirement. There are more than 60 free zones in the UAE where you can register your business and have 100% ownership. The best option for a foreigner is considered to be a Dubai free zone.
Contrary to popular belief, free zones are typically found right in the midst of towns rather than in rural areas. It is also possible to obtain a license as an expert if you can show that you are an experienced authority in your industry and that you will own 100% of the business.
Myth 5. Costly Business Incorporation
Launching a business is costly in Dubai but there are affordable options as well. In order to establish a business in Dubai, capital investment is necessary. The UAE is regarded as a business hub due to its simple business incorporation process. Due to the economy’s diversity, starting a company in Dubai, UAE is substantially more affordable and enjoyable than doing so in Europe.
Other advantages of establishing a business in Dubai include a low VAT rate of 5%, the absence of income tax, immense business support, the absence of bureaucracy and corruption, and a business-friendly environment.
Myth 6. Dubai has a challenging business setup process
It may sound difficult at first to acquire a business license in the United Arab Emirates. But getting your license is considerably easy if you follow simple instructions in order. Nevertheless, it is recommended to contact company formation experts like RIZ & MONA to assist you to get a business license and set up your company in a pain-free procedure in order to save yourself from all the trouble and hassle.
Myth 7. The legalities take time to deal with
Legal proceedings can be handled efficiently with the help of company formation experts in Dubai. Foreign investors would be completely unaware of the legal processes the UAE uses to incorporate businesses. This, however, should not be a barrier preventing investors from forming their ideal company in the UAE.
The majority of business owners or foreign investors value their time to a great extent. That is why they prefer moving forward with qualified business setup consultants who can help them in the proceedings and practically launch their business ASAP.
Myth 8. Speaking Arabic fluently is essential in order to merge into the business society of the UAE
Working in the UAE will expose you to individuals from hundreds of different religious backgrounds and various countries. Since everyone seeks to communicate, English has emerged as the most commonly spoken language in the UAE.
For instance, if you speak at least a basic level of English in Dubai, you will always be able to get by because the language is used extensively in media outlets like television, newspapers, radio, and websites. English is also spoken on all official documents and outdoor & indoor signage. 99% of the time, when you phone any company, you will receive the answer in English.
Myth 9. Finding investment is almost impossible
This myth is widely believed across the country and the world. But in reality, getting money in the UAE is quite the contrary. The UAE government is particularly supportive of local entrepreneurs and business growth. Because of this, the government has established business incubators for small and new businesses launched in the UAE.
In the UAE, getting money and infrastructure support for your initiatives is really simple. Business accelerator programs are put up in free zones to encourage entrepreneurs with creative business concepts.
Myth 10. You must have business and tax law knowledge
It is sufficient for entrepreneurs and business owners to have a fundamental awareness of the different commercial and tax laws in Dubai. It is not necessary for them to be fully aware of the laws legally implemented in the UAE.
But it is advisable to stay in touch with business professionals like Riz and Mona who will let you know of the recent and upcoming changes in the law on time so that you may avoid unexpected taxes and unnecessary fines. In this way, you will stay up to the changing legislations in the region.
In other words, you should never rely on misconceptions you have seen or heard and instead always consult business specialists in Dubai to learn the precise truth about a company.
FAQs – Frequently Asked Questions
What are the 5 issues that you need to consider when doing business in Dubai?
The 5 issues that you need to consider when doing business in Dubai are:
- Is the business name available for registration
- Which trade license should you get
- Which is the best location for the business
- What market should the company target
- The documents are not complete at the time of submitting an application
What do I need to know before starting a business in Dubai?
You need to know the overall cost of setting up a business, the procedure to follow, the required documents, and the licenses to get before starting a business in Dubai. A business setup consultant such as Riz and Mona can help you with that.
Is Dubai a good place to start a business?
Yes, Dubai is a good place to start a business. The environment of the city is extremely business-friendly and supports businesses of all nature, regardless of its size and operations. Any new businessperson should consider Dubai to open their new company in Dubai, UAE.
What is the best location for a business setup in Dubai?
The best location for a business setup in Dubai is a free zone or a mainland. There are multiple free zones and mainland in Dubai that offers various services, perks, and facilities for businesses so that they can operate in the Emirates with ease and make good money out of it.
Where are most companies located in Dubai?
Most companies are either located in the free zone or in the mainland of Dubai. Both of the economic zones are suitable for businesses of different natures, demands, goals, and operations to conduct. Do your research before choosing the jurisdiction for your company.
We have exposed all the myths about business setup in Dubai. If you are looking to start your new business in Dubai, RIZ & MONA can help you with that. We offer a full company setup package, submitting required paperwork, handling legal compliances, and tax registration on your behalf to establish a new business in Dubai or any other part of the UAE. Please get in touch with an expert at our company if you have any questions. We would be pleased to help.
With the assistance of our qualified team of advisors, RIZ & MONA offer business setup and business setup services in Dubai, United Arab Emirates. We provide easier and quicker company formation in the UAE’s free zones and Dubai mainland. Contact us now and start operating your new business in Dubai.