Located at the heart of some of the world’s most important trade and commerce routes, the United Arab Emirates (UAE) has been known as an important economic center of the middle-east. UAE has also been ranked among the top 21 countries globally as per World Bank’s Ease of Doing Business report and it ranks over all other middle-east countries as well.
Due to its efforts towards creating a diversified economy, the UAE has become an important place for foreign investments over the past decade. Abu Dhabi, Dubai, Ajman, Fujairah, Ras al Khaimah, Sharjah and Umm al Quwain – all the seven emirates of the UAE have taken steps towards creating investment environment and opportunities in the non-oil industries such as aviation, tourism and hospitality, retail, healthcare, renewable energy, financial services, logistics and education, etc.
On economic prosperity and government productivity, the UAE has been ranked first in the Middle East and 17th globally, by World Economic Forum’s latest Global Competitiveness Index.
Why start a business in UAE?
The strategic geographical location makes it the ideal gateway between the East and the West with access to a wide market comprising of Asia, Southern, and Eastern Europe, Northern Africa, and the Middle East. A favorable investment environment with a wide and easy global connectivity through the sea, air, and land make it a natural strategic investment choice for many.
The policies regarding foreign exchange controls, visa, and import regulations are also liberal and conducive to do business. The businesses can have easy access to state-of-the-art infrastructure, full ownership in free zones, and qualified workforce including foreign expats. Its membership with International bodies, treaties and conventions safeguard intellectual property.
The UAE government offers attractive tax incentives for doing business in the country. The custom tariff rates range from zero to five percent and there are no personal or corporate taxes.
Steps to know before planning to set up a business in UAE
Determine the nature of business: The nature of your business will determine the kind of license you require in the UAE. For example, there are more than 2,100 business activities available in Dubai under the categories of industrial, commercial, or professional services.
Options available to foreign investors to start their business in the UAE include fly in fly out / trading from overseas, through an agent/distributor, setting up a local entity, joint venture, and merger & acquisition.
For setting up business locally, there are options available such as onshore, offshore, and free trade zones, which of course come with their own unique advantages.
People of foreign nationalities need to involve a UAE national as a sponsor. As a foreign national, if you would like to have 100 percent ownership of your company, you need a license and location in one of the free zones of the UAE.
Seeking necessary approvals: You need to contact the Department of Economic Development (DED) of the respective emirate to seek the ‘initial approval’ and register the trade name. Certain businesses may require additional approvals or no objection certificates (NOC) from various Government ministries or other authorities.
Buying a business: Starting a new business is not the only option in the UAE. If you are looking to invest, but do not want to get yourself involved into a long and tiresome process of building a business from the scratch, you can also buy an established business in the UAE. Government approvals need to be sought stating the change of ownership. Online platforms such as Tobuz.com usually list businesses which are on sale in the region. You can choose the industry you want and shortlist the business to buy.
Choosing a business advisor: Whether you set up your own business or choose to acquire a new business, it is always better to get a trusted business advisor to handhold you at every stage. Although there’s no shortage of step-by-step process guides for starting a business in the UAE, they can be an uphill task if you try to do it on your own. An online marketplace like Tobuz.com can help you in the process, as it allows you to choose from its deep and diversified network of experts and professional services in the UAE. The pool of agents, advisors, business consultants, accountants, lawyers, marketing and advertising service providers across GCC makes it very useful for the new entrants into the market.
Unlike Europe or Asian markets, the UAE is a market that has its own unique business environment. Study the business atmosphere along with a local expert and you will be ready to enter a highly rewarding market.