Starting a company in the United Arab Emirates (UAE) is often mistaken to be lavish or pricey. The country’s economic development has created a false notion that a large capital is needed to start a company in the UAE, when, in fact, packages available are flexible and simple in nature to fit the needs of each investor, either he/she plans to start a small and medium-sized enterprise or open a branch of an already growing company.
With this, we have compiled a list of tips to help you plan out your budget upon opening a business in the UAE:
1. Pick an Affordable Jurisdiction and Authority
The UAE has three available business jurisdictions, namely, Mainland, Free Zone, and Offshore. Each has its own set of benefits and requirements, as well as restrictions:
● A Mainland business setup allows you to conduct trading activities with the local and international market. Aside from getting the staple tax benefits of a UAE company, you will also have access to the 50 Double Tax Agreements concluded by the country should you wish to extend your reach to international countries. However, foreign investors are not allowed to own 100% of their company in a mainland setup. Maintenance cost will also be visibly higher compared to other business jurisdictions due to certain office and management requirements.
● A Free Zone business setup lets a foreign investor own 100% of his/her company in UAE. However, the company is not allowed to conduct local trading activities. The company setup in the free zone experiences the full extent of the tax benefits set in the UAE, such as no corporate and income tax, customs duty, vat exemption, and full repatriation of capital.
Related article: 5 Cost-Effective Free Zone in UAE to Setup Your Business
● An Offshore business setup, like the free zone in Dubai, offers 100% foreign ownership, though will not be allowed to trade in the local market. Formation within the jurisdiction offers security, privacy, and minimal maintenance cost. It is best used for protecting your assets and holding companies.
In choosing your jurisdiction and authority, make sure that it will be convenient for you – strategic location, cost of living, and target market. Emirates in the UAE and all existing have promulgated their own business policies and regulations. Make sure to review them before coming up with a decision.
2. Plan Your Visa Requirements.
Acquiring a visa (or a set of visas) matters during company formation in the UAE. It involves your decision on who should work for you in the country, as well as other costs – for renting an office, utilities, renewal of visas, and other included expenses. You may also get visas for your dependents, should you wish to live in the UAE.
In acquiring a visa, make sure to prepare only what you need. Packages offered by your authority are easily customizable according to the needs of your company. In return, you may opt to add more visas in the future should you see the need to do so.
3. Look Out for Maintenance Costs.
Maintaining your company in the UAE is a big responsibility. Be ready for the incoming cost if ever you decide to rent an office, warehouse, or land for development for your business. Though the UAE has innovative ways in providing public utilities for the people, consider the nature of your activity.
Some authorities in the free zone offer virtual offices, allowing you to have a remote setup office yet still have access to office-related services such as concierge, phone call answering services, meeting facilities, and mailing.
Going all out on your chosen office may not be a bad thing – but still, it also may not be necessary.
4. Acquire the Service of An All-In-One Agent.
Finally, getting a local agent helps in keeping your budget intact – they assist you in license acquisition, government processes, visa and tax application, and continuous services for your company’s everyday needs, such as accounting and bookkeeping, digital marketing, mailing services, and marketing research, to name a few.
By choosing an all-in-one agent, you will save yourself from financial stress, time, worry, difficulty in understanding local policies, and unnecessary trouble in company formation in the UAE.
IBG Consulting have had a long list of experiences when it comes to assisting startups and international investors. We are a team of consultants who prioritize the needs and wants of our clients when it comes to business formation in the UAE.
Based in Dubai, we are at the center of UAE’s business and tourism district, fully equipped with knowledge and skills that will help our clients successfully begin their story in the UAE.
Let us help you build your empire today. Contact us for a consultation.