How to start a small business in Dubai: Essential tips for entrepreneurs

There are few things more exciting than starting your own business. The journey of taking an idea and turning it into a reality is one of the most satisfying experiences a person can have. This is especially true in the mile-a-minute atmosphere of Dubai.

Over the last decade, Dubai has become a hotbed for exciting developments in the retail and hospitality markets. A thriving tourism industry and discerning locals mean that a small business in Dubai has the opportunity to create something truly special. All you need is a lot of hard work and a little bit of luck.

But before we get too ahead of ourselves with dreams of bright lights in the big city, we have to get our new small business up and running. In this blog, we'll go through how to start a small business in Dubai, everything you need to do to stay within the local laws, and how you can set yourself up for success.

Dubai offers new and veteran entrepreneurs a unique and exciting challenge. As long as you stick with us, you can start your small business in Dubai with all the knowledge you need to succeed. Let's get started!

Why should you start a business in Dubai?

There are many reasons for starting a small business in the UAE. These include a diverse base of customers from around the world, incredible tax incentives, and a well-placed location that opens your business up to Europe, Asia, and Africa.

Diverse customers and workforce

With a population of 3 million natives and expats and a strategic location, a small business in Dubai has a unique opportunity to truly sell to the world. With careful positioning and a foolproof business plan, even a small business can have a global impact.

You can adjust the nature of your business to cater to specific demographics thanks to Dubai's mix of expats and UAE citizens. For instance, you could start a small grocery shop that stocks European, East Asian, or American produce. There are hundreds of niches waiting to be filled in Dubai.

Tax incentives

For the tax-minded entrepreneur, Dubai is a true utopia. In order to attract investment, there is no personal income tax in Dubai, and corporate tax is capped at an incredibly competitive rate of 9%! A small business in Dubai has even more reason to celebrate, as there is a 0% rate for businesses with profits under AED 375,000 a year[1].

These tax incentives are almost unheard of compared to countries with similar economies. This makes Dubai a deeply attractive option for new small businesses as it limits the tax burden the company and the individual entrepreneur will have to pay in the first few years.

Friendly atmosphere towards business

The Department of Economic Development in the UAE is known for its business-friendly attitude for mainland businesses. Entrepreneurs who wish to start a small business in Dubai will find that the red tape and bureaucracy found in other countries is generally absent in the Dubai free zone, though of course, there are still some regulations that must be followed and licences that should be obtained.

The UAE government offers a variety of grants, funding, and resource opportunities to small businesses to help them get off the ground. When you start your small business in Dubai, be sure to research what is available and apply to any that are relevant to your company.

Residency applications

If you're looking to make Dubai your permanent home, one of the easiest ways to attain residency rights is through company incorporation. This speeds up the application process and is one of the most attractive parts of starting a small business in Dubai. Residents can take full advantage of UAE public services, open a personal UAE bank account, and sponsor loved ones for their own residency application.

How to start a small business in Dubai, UAE

As it is often said, a failure to plan is a plan to fail. When you decide to open a small business in Dubai, you should ensure that you have a well-thought-out and considered business plan. Dubai may be a very friendly city to businesses, but there is no guarantee you'll succeed.

In the next section, we'll explain how to start a business in Dubai and how to cover everything you need to set yourself up for success.

Create a business plan

The first thing any entrepreneur should do before they start their business is to write an in-depth business plan. Your business plan is your company's defining document, so make sure you take the time to ensure that it meets the highest possible standards.

The Average business plan will include the following points:

• Cover page with branding - The front page of your document should include your business branding.
• Executive summary and business concept - An executive summary and business concept is a basic summary that includes an introduction and summation of your business idea.
• Market analysis - Staying on top of trends is vital to success. This section outlines what's happening in your chosen industry and a summary of your target audience.
• Business structure - a simple section that breaks down the structure of your business. Are you a sole trader? Do you have any partnerships or investors? Include it all here.
• Financials - One of the most important parts of your business plan. This section outlines your business financial plans, sales forecasts, income statements, balance sheets, and financial projections.

While they are not essential to the business plan, you may also choose to include sections on your marketing plans, PR strategy, location, and branding. The more you plan, the better prepared you'll be!

Decide on being a free zone or mainland company

UAE law has two distinct types of business: free zone and mainland. These two terms define where a small business can operate and their ownership structure. There are pros and cons for each one, so make sure you take the time to decide which one would work best for your small business in Dubai.

• Free zone - The free zone is a special economic area in Dubai. This zone is monitored by government and independent authorities. Free zone businesses are 100% foreign-owned and can only operate in the free zone and outside the UAE.
• Mainland -The Department of Economic Development monitors the Mainland economic zone. Mainland businesses are 100% controlled by their owners but require a UAE sponsor and can operate worldwide and anywhere in the UAE.

Apply for business licences and get your paperwork

While setting up a business in Dubai is relatively simple, there are still some licences and paperwork that you will need to attain. If you're a free zone business, you must apply for a business licence from your governing authority. Mainland businesses get their licences from the Department of Economic Development.

If you're wondering how to get a business licence in Dubai, you will need to provide the following documents:

• Your business plan
• An application form - This will be provided by the governing authority
• A memorandum of association (MoA) and local service agent (LSA) agreements - This outlines your business structure and your local agent
• Trade name registration receipt
• Passport copies of relevant shareholders
• No object certificate from your LSA
• Tenancy contract for you premises

If you're a hospitality business, you may need additional inspection certificates. There are local services available that can help you understand the process, ensure you have all the right documentation and explain business licence costs to you.

Outfit your business

Once you have all the relevant documentation, it's finally time to outfit your business and start trading! This is the exciting part of starting a small business in Dubai, as you can see your dream turn into a reality before your very eyes.

At this stage, it's important to try and stick to your budget as much as possible. Shopping for a new business can very quickly get out of hand, especially in a retail heaven like Dubai where you can find just about everything you can think of.

One of the most important parts of your business is your point of sale (POS) system. A POS is a specialised computer system that handles the sales process and manages your business admin. With a system like the Epos Now Complete Solution, you can streamline your process, download a suite of award apps, and get access to dedicated retail POS and hospitality POS.

Live your small business dreams in Dubai

Dubai is a city of culture and commerce. For small business owners, the city represents a dream of unlimited potential and ambition. If you follow our tips, keep a level head, and put in the hard work, you'll have the potential to reach heights you never thought possible.

It's just about growing your business; it's about living the dream in a sustainable and successful way. Good luck on your journey; we can't wait to see what you achieve!