Basic misconceptions about doing business in UAE
Running Own Business in UAE. Expectations vs Reality in 2019
Having multiple years of experience in business consulting industry, communicating with new clients, quite often I hear them commenting that the outcomes of registering and running business were different from their initial expectations.
This can be explained by the fact that marketing materials presented to potential investors via online portals, professional networks and other sources often omit important information on challenges that incorporation might introduce.
As it turns out, there are numerous regulatory and procedural “nuances” to take into consideration as one proceeds with registering their business in Dubai or any other UAE region. What makes the matter even more complex is the fact that those regulations keep changing over time, as UAE’s legislative and financial environment evolves and improves.
For a newcomer, a regulatory system of this kind may seem quite confusing. This is where an expert in the field comes in handy – a person, who not only possesses knowledge on step-by-step procedures of registration but is also able to analyze any particular case, predict and help avoid possible delays and complications “on-the-go”.
Below listed are few of the most popular misconception and our clarifications about Business in UAE:
“I have been told that it is easy and cheap to register a local company in UAE than US or EU. Why does your proposal cost so much?”
Clients, especially those from the US and EU often asks this question, as they compare the costs in UAE to their home countries. An average UAE mainland/free zone company startup might cost 2-3 times more than in the US or EU. It would not be entirely correct to make such a comparison as there is no corporate tax in the UAE as well as income tax.
The business benefits offered in the UAE help compensate for the initial expenses incurred. The absence of income tax, capital repatriation and commercial tax, along with constantly evolving governmental policies aimed to keep attracting foreign investment, guarantees comfort and ease of running business year after year. This ensures that the money spent for a startup is not only recovered but multiplied
“What if I do not renew the company trade license but keep using the residency visa for 3 years?”
UAE – registered companies have to be renewed annually. Although the residency visa grants its holder 3 years of free entry/exit, the holder risks being questioned at the immigration because the company license sponsoring the visa has expired. In other words, it is mandatory to keep renewing your license on an annual basis, even if it does not generate any business.
“I need the best banking option and the account arranged tomorrow”
UAE has a distinct banking system that dictates its own rules and regulations towards corporate banking. 10 working days would be a minimal time between submission and actual registration, given that all the documents get accepted without additional requests from the chosen financial institution. However, this is not the case in most scenarios. UAE bankers are careful when it comes to registering accounts for startups. One has to build trust gradually. Practical experience tells us, that as soon as the initial request gets submitted, lots of additional paperwork would be requested from an applicant, bringing time delays and money cost related to gathering those materials. It is highly recommended to use an industry specialist’s services in order to get fully prepared prior to arranging a flight to UAE and submitting applications to the bank.
These and many more issues entrepreneurs face while registering own business in UAE. Nevertheless, one can overcome them by simply addressing their case to industry’s specialists.
To receive a free consultation, get fully prepared and ensure smooth incorporation process, feel free to contact Adam Global Business Consulting Team.
Call:- +971 50 358 7945
We are happy to assist!