What are the 5 important Factors to Consider When Starting a Business in UAE 2023

Rajinder Nagiyal

July 19, 2023

Business Locations,Business Setup,Company Formation

What are the 5 important Factors to Consider When Starting a Business in UAE 2023

It is no secret that the United Arab Emirates (UAE) has a strong presence in the commercial world because of its robust economy, superior infrastructure, first-rate services, friendly business climate, and cutting-edge technology.

The nation is a great destination to launch a business because of the vast presence of investors and booming economy.

But before you head to Dubai to launch your unique business idea, there are some important factors you need to consider.

This blog post curates 5 important factors you need to have in place before starting a business in 2023 because “The secret to success in business is to know something nobody else knows.” – Aristotle Onassis.

1. Location

Selecting the best location is one of the most important factors to consider when starting a business in the UAE. The success of your company depends on where it is located. When determining where to launch your business, there are a few things to consider. This include:

Requirements for infrastructure and logistics: A good location guarantees that suppliers, staff, and customers can easily access the area. For instance, if your firm deals in imports and exports, it is preferable to be near ports that have access to logistical networks that can ultimately aid in the success of your organization. Additionally, in order to be properly prepared to support your business activities, your company must be ready to meet the technological and physical infrastructure requirements.
Financial Activity: The best location for your organization ultimately depends on the economic activity it engages in. It is simpler to understand your business’s area of operations and your target market, or the group of people for whom your company is best suited. Knowing your target market will help you choose a venue that is most appropriate for that group. Strategically placing your franchise where your target audience is significantly increases your sales.
Simplicity of Access: Customers and suppliers—the two key parties to your business—should be able to reach it. It should ideally be simple for everyone engaged in the buying and selling process to access your premises. Additionally, due to the convenience factor that comes with an easily accessible location, a business is more likely to have clients visit and make purchases.

2. Tax

Another key factor to setting up a business in Dubai is tax. The tax repercussions of conducting business in the UAE must first be understood. The federal tax system used in the UAE implies that the national government is responsible for collecting taxes. The UAE recently added corporate tax, so businesses will need to gather all the information they need for the corporate tax. Businesses should also be mindful of additional tax, such as the value-added tax (VAT) which was implemented by the UAE government. The VAT was imposed on a number of goods and services delivered within the UAE with a general rate of 5%.

3. Choosing the Company's Name

Before naming your firm in the UAE, you must take into account a number of variables. You must first confirm that the chosen name is accessible for use and that no other company is already utilizing it for commercial purposes.

Your company name should reflect the nature, purpose, and values of your business. Consider keywords or terms related to your industry, products, or services.

Additionally, you must be careful to avoid using phrases that are profane or that could offend someone’s political or religious beliefs.

One other thing to remember is that full names rather than initials or abbreviations should be used when referring to a company by its owner’s name in accordance with Dubai’s company formation.

4. Cost of Business Setup

Your new business’s starting point depends on a capital investment. The cost of setting up a business in the UAE can vary depending on several factors, such as the type of business activity, office space, utilities and infrastructure, the location within the UAE, the legal structure of the company, and any specific requirements or licenses needed. The first phase of your newly established firm can function more easily if you know how much money you’ll need to start and manage it and make plans for it.

5. Recruitment and employment procedures

Of course, there are no businesses with workers. Before beginning the hiring process, examine the talent pool available for the positions you intend to fill as well as any legal requirements related to it.

Many industries are required to adhere to hiring quotas, such as hiring a specific proportion of locals. If you intend to employ foreign nationals as well, you must submit an application and all necessary documentation to the GDRFA and MHRE in your home emirate. If your company is set up in a free zone, you must submit an application directly to the local government there.

The process of employing workers is governed by a plethora of other laws, so be sure to keep track of the number of employees needed, the legal system under which you conduct business, and any additional employee-based laws that are unique to your industry.

Conclusion

Establishing a business in a nation where things seem to work perfectly is a sure step to success. If you are considering starting a business in the UAE, it’s essential to recognise the factors above. Consulting with business specialists in Dubai can provide you with more important insights to help you set the pace for flourishing businesses in the UAE. To ensure you receive expert guidance, book a consultation with RSN Finance today. Our team of experienced professionals can provide valuable advice and assistance in your business setup journey. Schedule a consultation and take the first step towards a successful business venture in the UAE.