All You Need to Know When Starting a Business in Dubai as a Foreigner

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All You Need to Know When Starting a Business in Dubai as a Foreigner

All You Need to Know When Starting a Business in Dubai as a Foreigner

As a foreigner, it can be confusing when trying to launch a business in Dubai. We have a compiled a list of the things you need to pay close attention to when opening a business in Dubai.

Have a Business Plan in Place

Every business needs a business plan, albeit one that describes almost everything about the business – or at least as far can be foreseen. For example, if you were planning to open a restaurant, you would need to describe on the business plan how you plan to source fresh ingredients, how many staff you will have, what the menu will be like, projected food sales in a day / week / month, an estimate of the operating expenses, and what the profits after taxes will be.

Of course, it is difficult to pinpoint everything with accuracy, but having a business plan in place ensures that you are likely to stick to it and make minor changes only when required. If you know how much your profits will be, then you can plan everything accordingly. You are unlikely to splurge on a massive renovation of the interiors if the profits aren’t going to cover it. Too many entrepreneurs make the mistake of not having a business plan when they launch their business. The results are only there for everyone to see.

It is a good idea to run your business plan by one of the more reputed business setup
consultants in Dubai. They can tell you of potential pitfalls with your business plan, such as how the sale of alcohol is not readily permitted in the United Arab Emirates. This
information can help you redraw your business plan, if needed, and launch your business only if everything looks fine on paper. There is no guarantee that everything will happen according to plan, but it can steer you in the right direction.

Make Sure You Get the Right Business License

There are about 2,100 commercial activities possible in Dubai. A business setup consultant who has had experience with company formation in Dubai would be able to tell you how you can get a Business License. For instance, if you were a website developer, you could either get a freelance license or set up your own company. If you choose to open your own company, it is necessary that you lease commercial space for your company before you can
be granted a Business License.

If you were looking at options for low cost business setup in Dubai, the business setup consultant who you choose to have in your corner can advise you on whether the mainland
or a free zone would be best for your business. Some business activities are permitted to be carried out of virtual offices on the mainland. It is also not hard to find suitable office space on the mainland, where you are more accessible to your clients and your clients are more accessible to you.

In a free zone, business setup in Dubai is comparatively cheaper than on the mainland. You could rent a single desk in a co-working space at a free zone and move into an office later, as you scale up. The best part about opening your company in a free zone is that you have a lot of flexibility. For an e-commerce or general trading establishment, you could lease a larger warehouse or move into smaller warehouse at any time. Your address does not change – it is a PO Box at the free zone, unrelated to your physical location.

Establish the Right Kind of Company

If you are a solo entrepreneur, you could establish your company as a Sole Establishment (this is the same as a Sole Proprietorship). If you have one or more business partners, you could register your company as a Limited Liability Company or LLC, where everyone holds an equal percentage of the total shares. If you want to have minority shareholders and majority shareholders in your company, it is recommended that you set up your company as a Private Joint Stock Company.
If you already have a company overseas, you could register your company in Dubai as a Branch Office that is 100% owned by the parent company. Or it could also be opened as a Representative Office if you just wanted to have a presence in the United Arab Emirates or the Middle East. The difference between a Branch Office and a Representative Office is that the latter is not allowed to make a profit. It must outsource all its work back to its parent company.
A business setup consultant with experience in LLC company formation in Dubai can inform you of the right type of company structure that would be best for your business. Some business activities such as Defence and Construction require you to have a Local Partner who will own 51% of the company, so it needs to be incorporated accordingly. Some business activities such as banking / finance / investment cannot be carried out by a Limited Liability Company, so the right kind of company matters.

Ensure that Your Tax Affairs are in Order

The United Arab Emirates has Double Taxation Avoidance Agreements with 137 countries all over the world. There is no tax on personal income in the United Arab Emirates. You may not be required to pay any further taxes on your income derived from business in your home country, as you have already been officially taxed at the rate of 0%. However, this benefit does not apply to those classified as tax residents in their country of residence, so the time you spend in Dubai makes a difference.
Because the laws relating to taxation are different for every country, it is suggested that you seek legal advice on the matter. Opening a company in Dubai renders you eligible for an investor visa, and you may have to spend more than six months in Dubai or elsewhere in the United Arab Emirates to avoid being taxed in what is normally your country of residence. There are no capital gains taxes applicable in Dubai, and it is ranked first in the region for ease of doing business by the World Bank.
Dubai has been ranked among the top five cities for entrepreneurs worldwide. It is officially the most innovative city for business in the Arab world. Dubai is also one of the top cities in the world when it comes to attracting venture capital and startup funding. Owing to strict anti-money laundering regulations, opening a corporate bank account is not as easy as it sounds. But with the right business setup consultant in your corner, it can be a smooth process.

Choose a Reputed Business Setup Consultant

SetUpACompany.ae is a provider of corporate services that specializes in business
formation in Dubai, United Arab Emirates. Our team has been handpicked for their
expertise in Business Consulting, Tax Advisory, Legal, and Corporate Finance. We have been of assistance to clients from 100 countries around the world, and have an excellent client satisfaction rate so far. For more details, please call +971 50 427 3503 or email us at contact@setupacompany.ae

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