Dubai greatly welcomes foreign investments, as its restrictions are one of the most liberal in the world. Moreover, the UAE government has worked to create a good business environment to local and foreign companies. As a result, foreign companies that seek to start a business relationship with Dubai have many options. Moreover, the government provides foreign investors with different types of business models. These include commercial agency arrangements, direct sale, limited liability, representative or branch office and special Free Zone investment.
The Federal Government and the individual emirates regulate the economic activity in UAE. In Dubai, the authority is not very restrictive and has created a great business environment. Moreover, the UAE is the hub of business and a fast-growing nation with a diverse, multiethnic and young population of about 10 million people. However, this is not to say that starting a business in Dubai or Emirates is all plain sailing. It can be difficult for many types of businesses as the local customs, laws and habits can complicate the navigation of a foreign investor. Therefore, it is advisable to make some considerations if you intend to start a service business in Dubai. Here are 10 tips that can help you to start a service business in Dubai.
1. Understand the law requirements
Starting a successful service business in Dubai requires you to comply with all the legal requirements. This ensures that you avoid getting into conflict with the authorities. The law requires every foreign investor to have a local partner that holds more shares in the business. Consequently, the partner is in control of the business as the law allows him or her to own 51% of the company. Moreover, regardless of whether the business is a company or an individual, the local partner is not bound to contribute to the start-up investment or financially. However, local partner requirement is under review to attract more foreign investments. This has led to the provision of a free zone that allows foreigners to start a business without involving any local partner.
2. Enough capital
The Ministry of Commerce requires you to prove that you have an adequate amount of money to invest before your business is registered. The required amount acts as a cover against liabilities and is usually between $10, 000 and $50, 000.
3. Good knowledge of the region
When starting a service business, you should ensure that you have a good knowledge of the region. This is by ensuring that you first research on the region where you want your business to operate. This enables you to do an effective study of the market conditions that would affect your business either positively or negatively.
4. Have a viable business plan
You should first prepare a viable business plan that comprises of your business competition, market conditions and your expected results. This allows your business to start and develop well with minimal impediments. It also enables you to monitor the performance of the business and allow you to react urgently to any threatening condition.
5. Understand the business culture
It is very important to understand the business culture in Dubai. The most important thing to be keen on is how to treat women in the workplace. For instance, many women in the UAE might not be comfortable in shaking hands with foreign men. Therefore, you should instead wait for the woman to stretch her hand first before putting your hand forward. Besides, it is also against the norms for a man to touch a woman at any time in the workplace even in a friendly manner.
Moreover, Dubai is an Islamic state that adheres to the Islamic culture despite it being a cosmopolitan city. Therefore, it is very important to be aware of the Islamic traditions and respect them while in business.
6. Select a favorable location
Selecting a suitable location is the most important step in establishing a service business in Dubai. Therefore, you need to set up your business in an area that is convenient and where you are sure of winning the highest number of customers. If you intend to establish your service business in a Free Zone, you consider the costs, distance and your business convenience.
7. Hire a registration agent
It is advisable to hire a business advisory firm that will help you register your business. These business agents can take you through the registration process and register the company on your behalf. They will also assist you in arranging for an auditor, with opening a bank account and do your renewals as well as offering other nominal services.
8. Learn enough Arabic
As this is a service business, you should ensure that you have learnt enough Arabic that will allow you to communicate with your customers. This is by ensuring that at least you are able to communicate greetings, pleasantries and responses. However, you should ensure that you use the language respectfully as Arabs attach it to their religion. This will enable you to relate and create a good business relationship with your customers.
9. Know the etiquette
Running a service business in Dubai means that you will interact much with the locals. Therefore, you should understand their etiquettes and the values that they uphold. For instance, if an Arab invites you to his or her home, you should not decline, as this will grant you an opportunity to understand the local people. However, you should fully avoid discussing religion or politics as your opinions might be considered offensive or ill-informed.
10. Avoid basing your firm’s plans on published information
You should confirm the published information validity before you finalize your business startup plans. This is because rules are likely to change in both the local Department of business registration and in Free Zones. It is advisable to involve your business consultants.
As you plan to start a service business, you might now be aware that the process is financially risky and complex. However, with enough local knowledge and a good lawyer everything easily falls into place. It is also important to confirm the validity of the published information. This is because you might realize that some papers may be required or that some requirements may be relinquished if you negotiate. Furthermore, you might realize that some nationalities are required to have special authorization to start a service business. However, you should not let some of these precautions derail you as many people have started and developed their businesses successfully.