Over the course of recent years, Dubai has emerged as a major business powerhouse in the Middle East. With numerous free zones, advanced infrastructure, tax exemptions, low import duties and a strategic location, Dubai scores far ahead of its international competitors such as London, Hong Kong, Singapore, and Malaysia.
With its stable and secure environment, higher quality of life and business-friendly policies, UAE has become a magnet for entrepreneurs from all over the world. However, certain pitfalls are to be avoided to ensure that your company formation experience is smooth and the business is sustainable in the long run.
Below are 5 of the most common challenges businesses face while establishing an official presence in Dubai.
Type of Business to Setup
Selecting the type of business activity requires thorough consideration of certain variables surrounding the company’s structure. For example, what are its products and services? Its target customers and how long it plans to stay in the market? The type of business determines the kind of license the company requires. Whether it’s commercial, professional or industrial licenses, these will define the basis of the company’s operations. To steer clear from this hassle, companies hire professional business setup consultants to help understand the economic landscape of the city and the jurisdiction that will suit their business venture.
Financial management is a key deterrent that significantly affects the progress and stability of a business setup in Dubai. As a prime investor hub and a booming market for startups, new businesses entering Dubai face several unnecessary charges. During this process, small expenses can stack up and build financial obstacles especially for new businesses that are still in their infancy.
According to a study by the Association of Chartered Certified Accountants (ACCA), 82% start-ups fail eminently due to poor financial management.
Building an Organized Workflow
One of the major reason startups stumble is their inability to integrate a formal workflow system. The absence of proper workflow can pose countless technical, financial and administrative complications beforehand. Without building an organized workflow through a cohesive Customer Relationship Management (CRM) approach, accountancy software, project management tools and excel spreadsheets, tasks such as meeting up with a client, assigning work and building business strategies can become a costly ordeal during the development stages of a company. A reliable and organized workflow streamlines the company formation process, relieves from overburdening expenses and helps in the immediate growth of the company.
Human Resource Management
Hiring and retaining resources while setting up a company in Dubai has a significant bearing on the ultimate success of the organization. Dubai’s convenient location as a hub for three continents, also makes it a home to expat community from over 200 countries. Finding the right talent that shares company vision can be a challenging task, in particular between short deadlines of company formation period. Similarly, balancing diversity through gender, ethnic and cultural dynamics reflects immensely on the company’s ethical role as an international beacon for heterogeneity. According to McKinsey’s study in 2015, out of the 350 companies surveyed, the leading 25% firms with ethnic and racial diversity in management positions are 35% more likely to acquire above average financial returns.
Scaling up the Business
Companies usually tend to scale-up their business structure after a successful tenure in their initial target market. However, many business organizations are slow in moving up to the next level due to a fear of the potential risks involved in the transition phase. Scaling up the business includes increasing employee strength, finding new partners, moving to better business zones, tapping new markets and opening new departments. Scaling up diversifies business opportunities in the region and broadens the horizon through specialized workforce in the organization.
How Can IBG Help with your Company Formation?
IBG Consulting was established in 2013 and since then our professionals have helped numerous aspiring entrepreneurs and SMEs through intelligent business setup solutions based on their unique needs. As an influencer in the company formation industry, we believe in serving the business community with a solid business setup framework and a very reasonable pricing structure. We not only establish your company presence, but we also equip you with the necessary tools to grow your business beyond the trade license application process.