Dubai has become financial hub of Middle East holding many indisputable benefits for the people living and working in here as well as foreign entrepreneurs wishing to start a business in Dubai. These benefits include excellent infrastructure, tax free environment for running businesses, great strategic location for trade and availability of numerous free zones with investor friendly policies to promote Foreign Direct Investment. These benefits and many others combine together to make Dubai a modern, vibrant and an innovative state.
Dubai is growing at such a rapid pace that people living and working here have almost become desensitized to its rapid acceleration. Entrepreneurs from all over the world come here to reap the benefits because starting a business in Dubai is easier than any other place; Dubai is far ahead of neighboring countries like Qatar, Oman or Saudi Arabia. Nevertheless, starting any new project or business in Dubai or anywhere else does not come without challenges.
In this article we will elaborate major challenges that entrepreneurs have to face to run a business in Dubai. Keeping your eyes open towards all new developments and policies and being aware of the hurdles that you may face as a foreign investor can help you devise strategies to overcome them and rise as a successful entrepreneur.
1. Finding a Suitable UAE Partner
Broadly speaking, there are three options for an investor to start a business in Dubai; either form Mainland Company or Free Zone Company or Offshore Company. Mainland company formation requires having mandatory presence of local partner who must be UAE national and will have share of 51% in company. So, finding a local sponsor who will own majority of your business as well as providing you with the freedom to operate your business on your terms is a challenging task.
2. Money Management
It is highly important for new entrepreneurs to spend their cash wisely in terms of running business as well as personally. Why? Dubai is known as city of money. It is incredible and lavish space where you can easily lose yourself. Everything from dining, jewelry, art, fashion, cars etc. invite you to spend your cash on. Also in your business sense, you have to carefully monitor your budget such as choosing office spaces that cater to your budget and not highly luxurious or expensive ones that will cost you immensely.
According to a recent research by Associate of Chartered Certified Accounts, one of the biggest reason that startups in Dubai fail is due to poor cash flow management and the percentage of failed businesses is alarmingly high that is 82%. So beware of your spending here and keep a check and balance on it.
3. Organized Workflow Management
Organization is an essential entrepreneurial skill for success. With the fast paced environment of Dubai, businesses struggle to say organized. But this is a skill that you can learn and modify with experience. One can find easily in Dubai that many big companies have poor workflow management that doesn’t suit their purpose and hence waste of money. Information should be split systematically and software such as for accounts, excel sheets and for project management should be available and utilized to store information and for analysis which will help in key decision making.
4. Access to Information
While there are many websites who provide you information on how to setup your business in Dubai, but mostly the information is vague and insufficient for your complete understanding. Business setup is a lengthy and tricky procedure which you cannot do by yourself if you are new in Dubai. It is best advised to have a professional consultant company like KWSME who will help you in formation of your company from scratch till end.
5. Understanding the Cultural Values
The process of setting up business in Dubai might be different than your country. The reason lies in the cultural system that has to be taken into account. Dubai has balanced its dedication towards forward thinking and modernization while keeping a strong Islamic heritage. It can be a challenge for foreigners who have no knowledge of local norms and traditions. You must have knowledge and respect for Islamic values during business interactions, whilst doing business here.
6. People Management
One of the most significant things that you will notice immediately in Dubai is the level of diversity. If you look at the population of UAE i.e. 9.2 million, expatriates comprise of 7.8 million. This number is huge. So dealing with such diverse workforce having different cultural backgrounds, it is essential for you to hire the right people. Get to know them on business as well as personal level so you may understand their strengths and the factors that motivate them.
You should understand the importance of people engagement. According to a research of 1.4 million employees, it was found out that organizations that are high in engagement, they yield 22% more productivity and less turnover.
KWSME Services for Your Business Setup
Starting a business in Dubai is challenging process regardless of how knowledgeable or motivated you can be. It is best and most common practice to hire help from Consultant Company like KWSME who will provide you a unique insight on the market and help you gain your perspective. We at KWSME are experts in providing services for business setup in Dubai. Our services include providing you with the suitable work locations, giving access to suppliers, doing all the paperwork for your business setup, fulfilling all legal requirements for licensing and business registration, carry out banking procedures, obtaining visas as well as providing network opportunities for you.
We understand the challenges you face as an expatriate in this constant changing business environment and therefore put our maximum efforts in overcoming them so that you effectively run your business in Dubai. We have assisted thousands of clients over a span of ten years for their business setup so we can confidently say that you will be satisfied with our services. For further information and guidance for your business setup, visit our website.