Dubai Business: Eight Things to Do Before Setting up a Business


Setting up any business can be more than a challenge in one’s life. In Dubai, entrepreneurs typically experience a lot of difficulties in the corporate world. To at least take less of these obstacles, here are eight common things that you need to deliberate before setting up a business in Dubai:

  • Plan and Research

 Entrepreneurs or businesspeople without much practice rush to ventures without sensible planning and adequate research. Typically, they’re much excited and cannot take any longer to start the race. However, this usually results in unwanted prices that may surface later on. So before heading to the main road, sit still for thorough planning and assessment. Do a lot of research before final plotting. It’s always better to go slow but sure than be hasty and end up with unjustifiable regrets.

  • Licensing

 While being overwhelmed with business models, a bunch of requirements and user demands, business licenses have dropped down your list. Often, some most necessities have been overlooked; hence, licensing should be given priority.

Licensing is a business foundation that you should take seriously. It should be done with legal consultations and processes. Should you have chosen right options at the start of your business, it will save you from eventual constraints. You cannot waste your money and time for setting up a license only to learn later on that it doesn’t do any further function to your business needs.

  • Onshore Licensing

 Onshore Licensing refers to commercial businesses that benefit from being a Limited Liability Company (LLC). These are companies with licenses from Department of Economic Development (DED).

Some trading, manufacturing, and logistics companies might be having such onshore licenses. According to the laws, a local sponsor holds a minimum of 51% of shares. Such companies also require physical office spaces and approvals from individual local departments that handle such trade.

Meanwhile, offshore licensing pertains to licenses issued in Free Zones areas.

  • Location

 Physical space is needed for business operations. It’s not only that, space, where your business is taking place, determines the possibilities of either getting revenues or getting laid backward.  Prefer a place that answers the needs of your target consumers. Consider its accessibility, its nearby areas, its distance, and its cost.

For instance, tea has been a significant drink in Dubai and tea shops run throughout the city. One tea shop in an area may not gain as much as the other in other areas. A tea shop located outside of a Dubai Metro station can earn upto Dh5,000. Some factors may contribute to it but for a feasible fact, such profit greatly arises from the shop’s perfect location.

  • Free Zones

 Free zones are excellent options for business start-ups. Free Zones such as Jebel Ali Free Zone, Ras Al Khaimah, and Sharjah Hamriya Free Zone are commonly suitable for manufacturing and logistics. Meanwhile, other business communities settled in themed Free Zones like Dubai Internet City and Media City, among others.

Starting up your business in Free Zones is more profitable and speedy. However, you need to pay higher rates.

  • Local Partner vs. Local Service Agent

 Local partner refers to a UAE National who serves as your sponsor or partner in starting up your business. Over half percentage of your share should be allotted for the local partner, yet in return, having a local sponsorship has an advantage for future dealings with authorities.

On the other hand, LSA or Local Service Agent works for your registration from Dubai government with fixed yearly fees. Unlike having a local partner, LSA does not involve shareholdings.

Both have advantages and disadvantages – you just have to chosoe what is best for your trade.

  • Overheads

 To start a business involves certain investments and lot of expenses. Apart from the documents that you should prepare, you should also take note of the monthly bills such as electricity and water, probably the wage of your first two employees, a cleaner, and the like.

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