Is this your year?
Whether you’ve turned it over in your mind for a while, or it’s the first time the thought has occurred, starting your own business can bring a wealth of benefits.
The UAE’s free zones have always offered glittering attractions: Quick setup, no corporate or income tax, the ability to repatriate 100% of profits and no requirements for a local partner or to give up a majority share.
But preparation is key. Starting a business, is a serious business. If it’s to thrive, a solid foundation is essential.
Here’s what you’ll need to think about.
1. Work out who you are
It’s a great time to set up your business in the UAE – by September 2018, more than half a million people had decided to take the plunge and obtain a UAE business license. That’s up 9% on the previous year, at a time when the UAE achieved its fifth consecutive ranking as the top Arab country for ease of business.
Those numbers suggest plenty of opportunity, but also lots of potential competition, so it’s important to be clear from the start about your company’s identity, purpose and paperwork.
Deciding on your name is the first practical and symbolic statement of who you are. It’s something you’ll want to get right – a name that sounds great over dinner might not chime with your intended audience, or worse, may run into copyright issues with an existing business.
Building a brand is hard work and having to change your name further down the line isn’t ideal. That’s why it’s important to enlist the help of UAE experts with visibility of the whole market to help you check your name isn’t already taken, and if it is, to work with you to find suitable alternatives.
2. Work out what you do
Look closely at what your company is, what it does and what it needs for the best chance of succeeding. Free zones are designed to encourage and develop ‘hubs’ with similarly themed companies and like-minded entrepreneurs thriving in networks. Free zones tend to centre on a particular industry or group of industries, like media, creative industries or finance.
Your business proposal will likely fit more comfortably into some free zones than others (and may not actually be eligible in some areas). Deciding on the right base is a balancing act between achieving the most cost-effective start and thinking about which environment will allow your business to prosper.
An experienced adviser will help you deconstruct your idea, map out the services you’ll provide now and in future, then strike the perfect balance between your immediate and future needs.
3. Be sure about your company formation and license
Along with finding the free zone best suited to your business, it’s also important to know the types of company formation and licenses supported by that zone, and within that, the options that best suit your business.
There are several different approaches and what’s available differs between zones. For example, the Jebel Ali Free Trade Zone (JAFZA) supports existing entities, single shareholder companies and multiple shareholder companies.
Prospective businesses may apply for an industrial license, a service license, a national industrial license (where the government is a majority shareholder), offshore registration, a trading license or an e-commerce license.
Once again, experience is important here – understanding the right way to structure your company and making sure the license you obtain is the right one for your activities will help ensure a smooth setup and development.
4. Think about money
A new business requires funds to get started – it’s the crunch moment for any new venture, but the cost may be less than you think. While some free zones, for example, twofour54 Abu Dhabi require no upfront capital, the big initial outlay will be for your license. The cost of this will vary depending on the type of license you’re applying for as well as the free zone you’ve decided to set up in.
In general, you’ll be looking at a five-figure sum (AED), although licenses in some free zones are lower than this. You’ll also need to think about the annual renewal cost of your license.
5. Get your paperwork in order
Setting up a business means paperwork too. The free zones are designed to make it easier to begin trading, but each follows its own regulations and they all require some procedural paperwork, beginning with ‘initial approval’.
At this point you’ll need to have your business plan in sensible shape as well as your completed application form, along with a host of other materials including copies of any shareholder passports, specimen signatures and a letter of intent.
Working closely with experts in setting up UAE businesses can bring benefits here too. We’ve helped thousands of new businesses to get everything completed to the required standards when they need it.
6. Look at the practicalities
Beyond initial approval, we’re down to the nuts and bolts of getting your business into operation.
As well as obtaining your license, you’ll need to review the market and decide on a corporate bank account, find premises if your business requires them and finally, you’ll need to get your visa in place, if you require one.
Depending on your business structure, you may need a visa only for yourself, or for your employees too. You may also want to put them in place for family members. The process is relatively simple, but it’s best carried out with experts who can work with you at every stage to make sure the requirements are fulfilled, and delays are avoided.
Get the right insight from the start
The acid test for many would-be entrepreneurs is realising and reacting to the work involved in turning your idea into reality. Starting a business is exciting and rewarding, but it’s daunting too – it’s an opportunity to be grasped with both hands, but it’s also something to take seriously and handle carefully. If you’re going to do it, do it right.
There’s no doubt that the practicalities will be more stressful than the theory, yet thousands of entrepreneurs like you achieve their dream every year. There’s every opportunity for you to join them, but it’s important to have the right advice and expertise in your corner.
Like any other structure, a successful business starts with a solid foundation. Your idea and expertise are what you bring to the table. But enlisting experienced help to manage the administration, legal work and practicalities leaves you free to concentrate on your vision, with the peace of mind of having a knowledgeable ally close to hand, to make sure your great idea becomes your lasting legacy.
Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to email@example.com, or click here.