How to start a small business in Dubai
Are you considering starting your small business in Dubai?
Starting a new business can be a real pain, but not here in Dubai. It takes barely twelve days to register and set up a new business in Dubai. In this blog, we will tell you the Dubai business culture, why Dubai is the best place for business startups, and how you can start your business in Dubai.
Why is Dubai consider the best place to start a small business?
1. Zero Corporate Tax
Dubai government made the most leveraging offer for entrepreneurs and small businesses by not charging any corporate taxes on most industries and small businesses.
You do not have to pay taxes if your business is registered under the free zone category. You do not even need to pay any capital gain tax or corporate income tax.
On average, the effective small business tax rate is 19.8% globally, but it is 0% in Dubai.
2. Favourable Business Rules and Regulations
Dubai has successfully implemented and maintained business laws for Young Entrepreneurs. Dubai has signed many international business contracts. Along with rapid growth, Dubai has created its reputation for business opportunities in every sector due to super infrastructure, straightforward licensing, and registering rules for business startups.
3. Government support for small businesses
Dubai free zone initiatives are the masterstroke of the Dubai government to seek the attention of all entrepreneurs, business startups, and small businesses.
Free zones come with many benefits like-
- Postponement of rents for six months
- Improved facilitation for payments by installments
- Refunds of security deposits and guarantees
Dubai government has 50 bilateral investment contracts, more than 75 bilateral tax agreements with its corporate organizations, and strategic partners for entrepreneurs and small businesses throughout the globe.
Moreover, there will be many multilateral and bilateral agreements in the future for business startups and small businesses in Dubai.
4. Global trade hub
Dubai is highly focused on trade (i.e.stable trade, open trade, global trade, offshore and onshore trade) throughout the world.
Dubai has become the global face of innovation. Dubai is rapidly growing, so it is providing a lot of business opportunities to entrepreneurs.
5. Options for Business premises
Dubai is providing excellent infrastructure activities and is offering massive respect to the various company formations. That is captivating the renowned investors throughout the globe. There are many options to set up companies such as offshore, mainland, or free zones.
Moreover, there is no limitation to the company set up types. And even there are many options to choose from in the free zone company formation.
You need to know the answers to these questions before setting up your company in Dubai.
Q1 Who is eligible to start a small business in Dubai?
Q2 What are the legal structures for small businesses in Dubai?
Q3 How to start a small business in Dubai as an expert?
Q4 How to digitalize your business in Dubai?
Q5 Multinational companies opening up a branch or subsidiary in Dubai?
Q6 Starting up a non-profit company in Dubai?
Q7 Setting up an offshore or Free zone company?
Q8 Administrating your business in Dubai?
Q9 Business banking in Dubai?
Q10 Taxation for Small businesses or Startups in Dubai?
Q11 Business insurances or Benefits for Small business in Dubai?
Q12 Employing staff when starting a business in Dubai?
Q13 Support and Expert advice when starting up a Small business in Dubai?
Q14 Finding office space in Dubai?
Q15 Small Business training/ Entrepreneurship courses in Dubai?
Before Starting any Small Business, you must know why do you want to do it!
how to start a small business in Dubai: step by step guide
STEP 1: Dubai market research for small business
Step 1.1: Do the market research related to your business idea and analyze it is a feasible or perfect place for business.
Step 1.2: What kind of business do you want to set up offshore or onshore? Nowadays, the “Free zone” business is trending in Dubai.
Free zones are particularly popular with foreign entrepreneurs and with good reason. Among the incentives they offer are 0% corporation and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption.
Here are some Trending small businesses in Dubai
- Food industry– Cloud Kitchen & Restaurant
- Events management is the booming industry in Dubai and all over the Public Transport & Hospitality Service
- Real Estate – is investing infrastructure
- IT Infrastructure & Web Marketing
Step 2: Finalize your business legal structure
You need to complete the registration process of your company name with copies of the shareholder’s passport.
Suppose you already have a business in Dubai and you want to start a new business. In that case, the free zone asks for a business plan and Non-Objection Certificate(NOC) from the current sponsor, assuring that you have the permission to start your new business in Dubai.
Step 3: List down your business activities
Now you need to do the listing of your business activities. Based on your business activity, free zones will be allocated to you.
Every free zone has its criteria, i.e., some free zones only allow certain types of activity, such as media, medical, or transport.
Always try to choose a free zone sector related to your business, i.e., if your business deals in Import-export, you must lookout for a free zone near the airport.
Step 4: Selection of Company Name
When it comes to the company name, you must think very carefully. The company name should define the work and motive of your company.
Also, Dubai has some rules for company’s name such as-
- Any words that include offensive, abusive language are forbidden.
- A company name that refers to Allah, religious or political group is not allowed.
- If a company name is after a person, that person must be the owner/partner of the Abbreviations or initials of the word are not allowed. It has to be a full name.
Step 5: Office space which fits your strategy
Now you are looking for office space; we will discuss what key points you should keep in your mind before finalizing an office space.
- See the number strength of your team – as you just started your small business so you Must focus on the And area of your office. Choose an office that fits your pocket and needs, don’t go for a big one in the starting. Choose office space according to your vision. Your vision will help in finding out a suitable space for your office.
- Location of office: A perfect place has many parameters for you such as in between the market, transport The most critical point is to make sure the location you choose is not under any commercial project development program because you are just setting up your business, and losing time is equals to losing chances. Also, you need to take care that your office should be accessible through various modes of transport for consumers and suppliers. A poorly connected business will die a slow death. Always try to make things easy for your consumers. The location you choose must have good water, electricity, Internet connection, and required services.
- Open space or cubicles: it depends on your work and its requirements that what kind of work culture it requires will open space desks or cubicles which one would be the best for you.
Step 6: Digitalize Your Business
When all this procedure is making progress, and your Small business is all set to run, don’t forget to pay attention to the Advertising of Your Business.
Nowadays, digital advertising plays a very crucial role. As this is the digital era, the whole world is switching digitally, so the best way to scale up your business is to work digitally from the start.
According to your business,
- Do the market research and make your user persona.
- Setup your digital accounts and start targeting the audience with a specific type of content.
- Make sure your content act as the voice of your small business.
Step 7: Secure Additional Approvals
Finalize all incorporation paperwork.
Apart from company registration and free zones approval, perhaps the toughest of all these steps, the paperwork does not have to be too taxing providing, and always take expert help for legal work. Your business setup partner can advise you on the paperwork required and help you complete it. Here is a suggestion, if you are making someone a partner, always discuss all the legal work with them.
Step 8 : Bank Account of Company
When you have all the documentation related to the company, you should look for your company’s Bank account.
Many national and International banks work in Dubai like Emirates NBD, Abu Dhabi Commercial Bank, and the Commercial Bank of Dubai, along with global names such as HSBC, Citibank, and Barclays. You can approach any bank.
Step 9 : Visas
Now the final step of company formation in Dubai is applying for your visa. Many free zones allow you to put in applications for staff and dependents – the exact number you can submit will depend on which free zone you choose to set up in. So, if you are looking to obtain visas for a spouse, child, maid, or driver, it is best to seek expert advice to ensure it is possible to do so in your chosen free zone. Secondly, both you and anyone you are hoping to sponsor for a visa meet all of the entry criteria. After that, the process has four simple stages: entry permit, status adjustment, medical fitness test, then Emirates ID registration, and visa stamping.
Once All the paperwork completion, you will have all the documents you need to open your corporate bank account. Dubai is home to many local and international banks, including Emirates NBD, Abu Dhabi Commercial Bank, and the Commercial Bank of Dubai, along with global names, such as HSBC, Citibank, and Barclays. You either approach the bank of your choice or ask your business setup partner to arrange meetings with several institutions to help you choose the most suitable option.
Starting a small business in Dubai can be a daunting task, but it is definitely possible with the right planning and preparation. We hope that our tips have helped you get started on your journey to starting a successful small business in Dubai. Remember to research the market, create a detailed business plan, and make sure you are familiar with the local laws and regulations before you get started. With careful planning and execution, you can be well on your way to starting a successful small business in Dubai.