The United Arab Emirates (UAE) is one of the best places for business in the world. Each Emirate in the UAE has its own laws and regulations that govern every matter. When you do business in the UAE, you have to make sure you are not violating any law of another Emirate through your business actions. The economic performance of the UAE has been superb and the business has been booming. 2018 is predicted to be good for economic growth because of firming oil prices and an improvement in global trade, among many other factors. The many free trade zones in the UAE, are also driving foreign investment by offering 100% foreign ownership. This has caused business to increase by quite a lot.
The introduction of Value added taxes in the UAE in 2018 led to the UAE becoming one of the 20 least complex jurisdictions in the world for accounting and tax compliance, in TMF Group’s Financial Complexity Index 2018. The UAE’s position has changed to 74th out of 94 jurisdictions globally for financial complexity. It is interesting to note that the UAE initially ranked 92 in 2017.
Dubai hasn’t fulfilled its potential just yet, despite the huge amount of investment and the pace of development. But it is still growing, so it is great for businesses looking to set up or expand, but it’s important that you do your research before you setup your own business in Dubai. Here are 10 key challenges of doing business in the UAE that you’re likely to encounter.
1. Company ownership in Dubai
An individual who wants to own a business in Dubai must make sure that he finds a suitable local sponsor who will own 51% of the business. This is mandatory by law for limited liability companies that are being setup on shore. These requirements change when you are trying to setup a free zone or offshore companies. For those, your business in Dubai is not required to be majority owned or even minority owned by a local sponsor. The condition is completely waived off.
2. Work permits and visas
If you are coming to the UAE and starting your business in Dubai, you will have to adhere to the laws of the Emirate. When it comes to foreign ownership of businesses, visas and permits for doing business in UAE are always something that are points of concern. There are laws regarding issues relevant to these as well. If you are starting a business in Dubai you will be permitted to get your staff or workers from abroad. This also depends on type of business, location and the size of it.
3. Learning about tax
The UAE is widely known for how the country has its taxation. There is no income tax for people but that does not mean that there is no tax at all. In fact, for business setup in Dubai, Value-added tax was introduced in January 2018, which means that businesses now have to pay taxes if they meet a certain criteria in terms of revenue.
4. Understanding the market
The market in Dubai is not like the one in your home town. People in Dubai come from different backgrounds and countries and everyone has a different taste when it comes to almost every product, be it food, clothes or fashion. You will have to understand the diversity in order to pitch products to the market and succeed in making sales.
5. Obtaining approvals and permits
Often times entrepreneurs fear business setup in Dubai formation because they are not aware of the processes completely and are not able to navigate themselves from one department to another for different approvals. But this issue can be solved by the Company Registration UAE, business consultants Dubai which will help in business registration as well as all other matters related to it. The experts at the firm will provide you with information on the processes and approvals that you need for doing business in UAE. Support services like corporate bank account opening and product registration will also be provided by the business Consultants Dubai.
Company Registration UAE has expertise in business formation. Call us today for help.