You can find several blogs around internet about setting up a business in mainland Dubai. However, very few discuss the challenges behind the process. If you’re curious about that part of the story, this blog explores the other side of the coin, the hurdles in setting up a business in mainland Dubai.
If you are new to Setting up a business in Dubai, you might be wondering what might go wrong. You have the business idea, you are aware of the paperwork, and you have the funding. But here’s what’s most important to know. When you get into setting up a business in Dubai, only while you are into the paperwork that you will realize that there are several hurdles you need to cross. Understanding the challenges can help save your time and money before setting up a business in Dubai.
Understand the nature of your business activity
UAE offers economic licenses in various sectors, including occupational, tourism, industrial, commercial, agricultural, and professional activities. There are over 2,000 economic activities available for businesses in the UAE. The type of license you need, and the approvals required is determined according to the business activity that you choose. Hence, it is really important that you define the nature of your business before starting the setup process.
Entrepreneurs can either check the government website to understand the various economic activities in the UAE, or they can approach a professional business set up company in Dubai, as they will help you identify the correct business activity classification and avoid any mistakes.
Office Space Requirements
Mainland companies require a physical office space. This is a requirement that is connected with the issuance of the trade license. There are specific space requirements already set by the government authorities.
There is a minimum space requirement of 200 square feet to set up a mainland company. But this can vary according to the business activity, number of employees, etc. This can become an unexpected expense to startups and small businesses who are unaware of this part in mainland business setup Dubai.
Office Size and Visa Quotas
There is a direct connection between the office space and the visa quotas that your company can get. The number of visas a mainland company can obtain for its employees often depends on the size of the company’s office space.
There is a rule of 80 square feet per visa. Hence, choosing a smaller office space might limit your capability to hire more office staff in the future. Remember that these rules are not applicable to all types of business activity, and they can change according to the type of your business. If you are an entrepreneur with a startup but planning to expand quickly, you need to consider these factors before setting up the office.
Opening a bank account
Opening a corporate bank account in the UAE is one of the steps that are non-avoidable, yet can be a bit complex. Especially when you are a non-resident entrepreneur, it can make things a bit difficult. Banks are strict when it comes to the procedures for providing corporate bank accounts.
To open a corporate bank account in the UAE, banks may require you to submit your trade license, shareholder information, business address, and, in some cases, even the source of funds. The anti-money laundering is strictly followed by UAE banks, especially when it comes to non-residents.
The processing time can also span from a few weeks to even months. Some banks also require you to have a minimum average balance. So, if you do not properly plan during the mainland business setup, it might lead to delays in the business operations.
Understanding compliance requirements
So once you finish setting up the business, you might be relieved thinking that all the complicated paperwork and processes are over. However, setting up a business is in fact just a beginning. There are several regulatory requirements that your businesses must comply with, including tax registration, annual license renewals, and maintaining accounting records.
It is mandatory in Dubai to register VAT for businesses with an annual taxable turnover exceeding AED 375,000. Dubai has some strict rules and regulations to follow while running a business. While it is possible to set up and run a business independently, many entrepreneurs approach a business set up company in Dubai to avoid any delays or fines.
Conclusion
Dubai is one of the most business-friendly cities in the world that offers entrepreneurs a door into global markets. The flip side of doing business in Dubai is the strict rules and regulations that come along with it.
From selecting the right business activity to selecting the office space, getting the visa, and opening a Bank account opening assistance, there are several things that entrepreneurs should prepare for. By understanding these aspects about mainland business setup in Dubai, businesses can approach the process with clarity and avoid any surprises in their entrepreneurship journey.
Navigating through these procedures can seem to be challenging for entrepreneurs especially if you are a first timer. This is where professional guidance becomes a game changer. Experienced consultants like Visandbiz helps businesses with end to end services and provide support throughout the setup process including managing documentation and approvals. Visandbiz is a business set up company in Dubai with years of experience handling around 3000+ satisfied clients and elevating their business experience. With right support like this, entrepreneurs can avoid getting stuck into the loop of complex procedures and focus only on the growth of their business in Dubai.
