Entrepreneurs come in all shapes and sizes. Some have an idea for an innovative new product or service or have spotted a gap in the market they believe they can fill, while others have just tired of working hard for someone else and want to be their own boss and make their own money.
But whatever the reason for wanting to set up a small-scale business, the United Arab Emirates is a great place to establish it, and every year hundreds of new businesses do just that.
But how do you go about launching a small-scale business in the UAE? This article will give you information on how to do this, covering these topics:
- Benefits of launching a small-scale business in the UAE
- Steps to launch a small-scale business in the UAE
- Cost of launching a small-scale business in the UAE
- Why choose Worldwide Formations?
Benefits of launching a small-scale business in the UAE
There are many benefits of launching a small-scale business in the UAE. One of the biggest is the tax regime, which has zero income tax on personal and business earnings. For entrepreneurs this means that profits can be ploughed back into the business to help it grow faster. For employees, it means they retain all their earnings. In addition, the rules allow for 100% repatriation of capital, which can be important for non-UAE nationals.
The UAE is also in a great place if your business is conducted internationally. The transport links via air and sea are first class and most of the world’s population are less than eight hours away.
The government has also worked hard to foster a pro-business environment in recent years, with plenty of grants and other incentives available to businesses in a wide range of sectors.
In addition, the UAE has an advanced technical and physical infrastructure, which helps make business easy to do.
Finally, the UAE offers a high standard of living, with advanced healthcare and education systems and plentiful public amenities and attractions.
Steps to launch a small-scale business in the UAE
You can launch a small-scale business in the UAE in six simple steps.
Decide which activities the business will undertake after it has launched: It’s very important all the activities the business will be involved in are included because if some are omitted at this point it could cause problems later. For this reason, it is advisable for entrepreneurs to engage the services of a company formation specialist such as Worldwide Formations, which can help with this step. Contact Worldwide Formations for a personalised quote today: www.worldwideformations.com/contact-us/
Name the business: The UAE has a few rules that anyone planning to launch a business must be aware of, but they are straightforward. Firstly, the business cannot have the same name as an existing company in the UAE. Secondly, the name cannot have any profane or blasphemous language in it. Finally, if the business is named after the entrepreneur, the full name – first name and surname – must be used; no initials or abbreviations are permitted.
Choose where to be based: One of the main considerations is choosing the mainland or a free zone for a base. There are advantages to both types of locations. For instance, free zones have a simple incorporation process, provide support for businesses on an ongoing basis, require no annual audit and offer tax exemptions and no restrictions on currency transfers.
Meanwhile taking a base on the mainland means the business can trade directly with the entire UAE market and bid for government contracts.
The decision will come down to which will be best for the business – again, Worldwide Formations can provide expert advice on this.
Apply for a business licence: This step is crucial for setting up a small-scale business. There are a variety of licences that can be applied for, which are dependent on the activities the business will undertake.
It is also worth noting that the application process is different for free zone and mainland-based businesses. Those based on the mainland must apply directly to the Department of Economic Development or the Municipality of the emirate the business is based in. Usually, applications for a mainland licence take about three weeks to be granted.
For those looking to trade from a free zone, the application has to be submitted directly to the relevant governing authority. However, it usually only takes a few days for a licence application to be granted.
With licence applications, certain documents are required, including the completed application form, a copy of the business owner or owners’ passport and two passport-sized colour photos.
However, it is important to ensure the application is filled out correctly, otherwise it will hold up the granting of the licence. It is recommended to seek the services of a company formation specialist such as Worldwide Formations at this point.
Make visa applications: A UAE visa is another vital requirement for those wanting to launch a small-scale business. Those from outside the UAE are required to have a visa, although the process is relatively clear-cut.
Business licence holders are eligible to sponsor others seeking a visa, such as a spouse, child or parent. How many visas someone can apply for depends on how big the business is, its form and, if the visa is for a dependent, how much they earn.
If the business is employing people from outside the UAE, they will also need visas, but again the process is easy to complete.
Set up a corporate bank account: Businesses need a corporate bank account, but the UAE’s strict money laundering rules mean it can be tricky for overseas nationals to open one. Again, a company formation specialist can help with this process and recommend the one that best suits your needs and can even arrange meetings.
Cost of launching a small-scale business in the UAE
The cost of launching a small-scale business in the UAE is between AED 20,000 and 25,000.
However, how much it costs to launch the business depends on a variety of factors, such as the cost of a business licence and the process of applying for it, renting a workspace and initially furnishing it, as well as costs involved in sorting out visas for any employees you may be bringing in from outside the UAE or for putting in place any special permits that may be needed.
For more information on the potential costs involved, and how they can be mitigated, contact Worldwide Formations for a personalised quote.
Why choose Worldwide Formations?
As detailed above, business setup in the UAE has its complexities and comes with risks if the entrepreneur is not savvy. However, consultants such as Worldwide Formations can help entrepreneurs set up a small-scale business as smoothly and quickly as possible.
Worldwide Formations are vastly experienced in how to set up businesses in the UAE, and, with our local knowledge, our consultants can navigate the complexities with skill and speed to ensure your business is fully set up and legally compliant as soon as possible.
To find out more and to receive a personalised quote, please contact Worldwide Formations today.