Tips on setting up a business in the UAE

Originally found here

If you are thinking of setting up a business in the country, there are some important factors you first need to consider. John Martin St. Valery from company formation specialist Links Group offers some tips to help get you started.


Know the market
Whatever the size of your business, you first need to understand the demand for your product or service to determine your market potential. Research, research, research the market and find out where there is current supply and demand; then apply your business intelligence to predict what future demand will be.

Find the gaps in the market
Only once you understand the market can you identify the gap or niche which your product or service will address. Remember your expertise and proofs of concept are important differentiators.

Know your competition
Research is the mantra that must always apply to start-ups or SMEs looking to expand into a new part of the world. In addition to really understanding the audience for your product or service, research the competition.
To effectively differentiate your proposition, you must first understand your competition. Even if you are a completely new-to-market concept, less obvious competitors will already exist.

Know your unique selling points
Once you know the gaps in the market and understand your competition, decide on your unique selling points. This is particularly important if seeking finance from external sources. It should help to position your offering as an attractive investment proposition.

Choose the right business format
Think very carefully about where and with whom you will be trading. Determine what company formation structure suits you best. It can be a very costly exercise if you don’t get this right from the outset.

Be wary of barriers and pitfalls
Licensing is linked to the rental of commercial office space in the UAE and this can be a drain on capital expenditure for a start-up or SME. Labour, immigration and municipality fees can also impact cash flow if you’re not prepared for them. Your local partner should be able to guide you in this regard.

Be prepared for challenges in generating finance
At the moment, access to finance is particularly challenging for start-ups in the UAE. Providing audited financials and a clear corporate governance policy can help.
Personal savings or loans from friends and family can be the most cost-efficient and hassle-free forms of financing.

Foreign compliance is essential
If you want to establish a limited liability onshore company in the UAE, currently the law states that a local partner must hold a minimum 51% share. Compliance is essential, but it need not compromise your control.
Commercial side agreements and management agreements are commonly executed, enabling the beneficial ownership, management and operation of the business to remain exclusively with the foreign party.

Look out for licensing restrictions and ways to overcome them
Certain commercial activities are restricted to nationals only. In these cases expertise from foreign firms is often sought and delivered by way of a joint venture arrangement, whereby the foreign company provides the operational and support expertise while the local entity provides the licensing capability.

10 Grasp the opportunity
Demonstrate a willingness to ‘fit in’ while remaining assured and confident in order to fully grasp the opportunity. Take bold decisions; they can reap rewards. Think on a wider scale: Could your business work in other Middle Eastern markets? And importantly, are you aligned with the economic vision of the country?

The Links Group, Company Formation Specialist - Business Set Up, Dubai UAE Qatar Abu Dhabi Doha






Article by Links Group on Sep 5th 2012

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