13 07 2020

What should be considered when starting a business in the UAE?

What should be considered when starting a business in the UAE?

Due to the almost complete absence of taxes, the absence of customs duties on imports, state support for small and medium-sized businesses and the presence of a large number of other business opportunities, the UAE has become for entrepreneurs the most favorable and attractive place for starting and developing a business.

 It is necessary to take into account the specifics of the business environment and conduct a financial analysis of the region when opening a company in the UAE.

    •  Business geography;

You need to understand which company and for what purpose you need this company to be formatted. The type and location of the company determines your type of business. In the Free Economic Zones it is possible to register companies, both local (onshore) with 100% foreign ownership, and offshore companies that do not operate inside the UAE. Outside the FEZ it is possible to register a mainland company that will work both with all FEZs companies and companies outside the FEZ, on the territory of all 7 Emirates. To open such a company, you must have a local sponsor who will own 51% of the company’s shares. You can also register a branch of a foreign company.

    •  Legal norms and legislation;

In the UAE, there are general laws that apply throughout the UAE. Also, each Emirate and each Free Economic Zone have their own legal rules governing the rules of doing business in their territory.

    •  Potential business expansion in the UAE;

Before a company registration in the UAE you must calculate the possibility of expanding your business. In the case of the Free Economic Zone company registration you should not forget that under the UAE Law a company will be able to provide its services only on the territory of FEZ where it is registered.

    •  Access to resources and real estate;

There are a number of restrictions for foreigners on access to resources - offices, land, energy, etc. Each jurisdiction has its own capabilities and limitations. When starting a business, it is worth considering these factors, because, for example, if you are importing or exporting, you will need access to the airport or seaport.

    •  Regional features;

Do not forget about the traditions and cultural aspect of the region when opening a business in the UAE. It can be difficult to obtain a license to sell alcohol or sell pork.