Starting a new business in any city is difficult. The right product or service has to be selected, in which there is unfulfilled need. You also need to have, or develop, adequate expertise in that area of work to be able to provide the right solution to those unfulfilled needs.
Once these basics are taken care of, then come the more mundane things like land, labor, and capital!! And finally, once your production line is in place or your service framework is decided, then you need to decide how to market your company to prospects.
There is also the small matter of book keeping and regulatory compliance that needs to be taken care of. Phew, we did say at the start that starting a new business in any city is not a piece of cake. But wait! What if that city is one of the world’s favorite business destinations?
Yes, we are talking of Dubai here. Because of several distinct advantages, Dubai has become a very popular destination for people wanting to start a business. Dubai is the nerve center of a sprawling market in itself, and it is also the gateway to lucrative markets in the vicinity. Although the country is not a democracy, but the business policies are very entrepreneur friendly. One of the big advantages is the tax free regime that Dubai has, although things have changed slightly after VAT was introduced recently. Dubai is on a growth path, and investors as well as entrepreneurs are making a beeline for Dubai. Oh, did you say you were also thinking on the same lines? Then you would do well to know the essentials of starting a business in Dubai.
Talk to business consultants & legal advisory
We did say that Dubai is a very business friendly destination. But even so, it does have its own set of rules and regulations which you need to be aware of, so that you do not violate any rules unknowingly. Were you aware that Dubai has as many as 28 separate jurisdictions? Among them, they have more than 2000 different licenses available.
Depending on the purpose of your business and the legal structure of your company, you would need to choose the correct license to apply for. The kind of license you would need would also depend on which part of Dubai you are located at. And of course, there is the matter of how your company would be structured. All of this can be done by a business consultant who will take you through the process, from start to finish.
Setting up a financial plan
They say you can plan to fail if you fail to plan. Just deciding on Dubai as your location will not be enough to ensure good returns. You need to have a well thought out financial plan for your business. This serves two purposes. If you have a roadmap for your expenditure and revenue, you would be able to properly align all other activities in line with your financial goals. Second, a properly laid out business plan is always required by bankers or investors before they agree to put money into your project, in the form of debt or equity.
When you think of starting a business, you will have the broad perimeter of that enterprise quite clear in your mind. But when we say you need a financial plan, we mean putting it down as a document with as much detail as possible. When you have your meetings with your chartered accountant for creating your financial plan, you will realize that there are several questions which you hadn’t even thought of, let alone having an answer for. Usually, business owners continue with the same chartered accountant even after the business has started, in order to carry out regular book keeping as well as regular auditing of accounts.
Registration and approvals
Dubai has a Department of Economic Development (DED) with which you need to get your trade name listed before you can start your business operations. This registration of your trade name stays valid for 6 months, and it would take 3 days to get approved after submitting your application. Also, you need to check whether the particular business you seek to carry on is approved as per Law 13. You are exempt from this requirement if you set up your business in the Dubai freezone.
When you are ready to start a business in Dubai, it is mandatory to take a UAE citizen as partner. The ownership of the enterprise would be held by the UAE partner to the extent of 51%. Again, the rule is slightly different if you are in the freezone. In that case, you would need a local agent. This agent wouldn’t be a partner, but would charge fees for his work. Another local requirement for your new business is the need to have a registered business premises. You need to have necessary documents from RERA (Real Estate Regulation Authority) for your property where your business is registered and operates from. These documents are to be submitted to DED along with tenancy agreement (if rented) and also EJARI.
There are several other documents that you need to have ready before you can begin your business operations. Your consultant will provide you the full list, but here is a ready reckoner (of which some you might need, because of location or style of business):
- Application for license
- LLC agreement, duly attested
- Certificate of reservation for your firm’s name
- Initial approval
- Necessary approvals of related departments
- Contract for tenancy of premises
- EJARI registration
- Passport copies of all partners
- DCCI registration (Dubai Chamber of Commerce and Industry)
The above list is indicative, and would usually be needed for all businesses. Additionally, depending on your industry and sector, you might or might not need governmental endorsement (oil and gas), Central Bank approval (financial institutions), confirmation from Finance and Industry ministries (manufacturing), confirmation from Commerce ministry (insurance), confirmation from Health ministry (medical) and so on.
Marketing & advertising strategy
You might have a great business plan in place, and might have all the revenue streams worked out. You might even have a brilliant product or useful service that people are sure to embrace as soon as you start your new business in Dubai. But unless you know how to reach your potential clients with a clear and crisp messaging, your product or service will go nowhere.
You need to begin working with a best advertising agency to develop content and plans for your advertising and marketing. This would include the traditional modes of outdoor, TV, and print advertisements, advertising gift articles, but also have plans for digital marketing using websites, blogs, and social media profiles. Many business owners make the mistake of starting to think about advertising and marketing once their enterprise has begun functioning. But it is much better to keep advertising and marketing as important elements of your initial planning stage, using the services of an experienced and capable advertising agency.
The process of setting up and running a new business in Dubai might look complicated if you have read this article so far, but it actually is not. The entire process is very streamlined, and timelines are adhered to. Additionally, there are several good consultants available who can help you through the process, and provide all necessary local expertise and help.