Any company setting up in the UAE will have a vision of what they want to achieve and how they intend getting there. And they will have allocated a budget to make it happen.
But running the business is a whole different matter. Situations change, the market can fluctuate, and you may come to a point where you’re heading for trouble unless you reduce your outgoings. Thankfully there are ways to manage this, wherever you may be in the UAE.
So here are three paths to reducing your company costs without changing your model or offering.
1. Move to a more affordable jurisdiction
As an existing company in the UAE you already know how the costs of setting up vary depending on location.
When creating a business in a free zone your costs depend on factors such as business model, business type and visas required. Setting up on the mainland involves additional burdens – government fees and ongoing registration with the Immigration and Ministry of Labour, for example.
The latter needs to be renewed every two years (compared to free zones, where it is a one-time fee).
It is important to remember these variations when trying to reduce costs. For example, many people overspend because of their trade license jurisdictions.
Yet while your trade license needs to be from a zone that hosts your particular business sector, it doesn’t necessarily matter where it is physically located. Ask yourself: do you really need to have a trade license from the mainland when a particular free zone could work just as well? And should you opt for a Dubai free zone when licences from many other emirates are much cheaper?
How to find cheaper options
As with so many aspects of running a business, it pays to do your research. You might well have picked what you thought was the best location for your business when setting up, but it doesn’t necessarily mean it’s the cheapest or most efficient option for you now.
When looking to reduce costs, it’s recommended to move the jurisdiction of your trade license. For example, both Khalifa Industrial Zone Abu Dhabi (KIZAD) and Abu Dhabi Airport Business City offer fantastic license options at a fraction of the price of Dubai free zones.
2. Reconsider your warehouse/storage location
Warehousing and storage can be a costly business expense, with varying benefits depending on where you are in the UAE. We have solutions that will surely help in reducing your costs. This could vary from partial to total relocation and other practical solutions.
One of the key advantages of being on the mainland is that you are able to trade anywhere within the country. However, being in a free zone means complete ownership and exemptions from all import and export taxes. Goods may arrive, be handled, made, altered or re-exported, all without the involvement of the customs authorities.
If your warehouse is situated in an expensive location, you need to check whether the type of work you do necessitates it staying there. It might work just as well elsewhere.
How to find cheaper options
Weigh the costs of your current warehousing or storage against your locational needs. Do you export within the country or directly abroad? Maybe your storage needs would be more efficiently met in a different part of the UAE, due to the considerable savings involved.
There are plenty of options to choose from. If you look around for rental option in a different location you could well find something that is more cost effective. This is where our expertise comes in, to assist you in choosing the appropriate cost-effective jurisdiction for you.
3. Downsize your office and promote remote working
The digital revolution has transformed the modern office, allowing for more efficient and flexible working. With the physical shrinking of technology hardware, offices no longer have to house the kind of infrastructure that used to be commonplace in any business.
In parallel, the introduction of cloud-based solutions gives employees the ability to access company systems in or out of the office, and via a variety of devices.
Put simply, it is easier than ever for any business to reduce its operating costs through the most practical and cost-effective of measures – downsizing.
How to find cheaper options
Cloud solutions enable entire IT systems to be taken completely off-site, allowing for significant savings. You no longer need to pay for extra office space in order to house servers, or pay for in-house specialists to maintain the technology, or factor software updates and fixes into the annual budget.
A reliable IT services provider can take all that off your hands for a small regular fee. We can assist you with this too.
And with cloud solutions allowing employees to access systems from home, remote working is now more popular and practical than ever. It reduces the need for large office space and all the proportionate associated overheads, saving substantial amounts.
There are other benefits to remote working too. A two-year study conducted by Stanford University in the USA concluded that employees who work from home are more productive by up to one full day per week. This is in addition to remote working employees having fewer sick days, shorter breaks, and having less time off.
Consider your options, reduce your business costs
Not everyone will be able to take advantage of all these cost-reducing opportunities, but regardless of your industry or business size you should be able to investigate at least one of them. You may not be able to do it on your own. We always tell our clients – not every free zone suits every business. This is where you will need specialised advice from us as your trusted advisors.
When running a business, it’s easy to get into a routine, and in a busy world the idea of change can sometimes seem like too much work. But when the brief inconvenience is measured against the prospective savings, the benefits become clear. We suggest you get in touch with us to discuss the options on how we can assist you significantly reduce your outgoings and create a far stronger bottom line for you and your stakeholders as we head into an exciting 2020.
Worldwide Formations helps entrepreneurs in the UAE with all their company setup needs. For more information, call us now on 800 FREE ZONE (800 3733 9663).