5 myths about starting a business in Dubai
Dubai is one of the world’s most attractive financial hubs, providing the perfect setting for business owners who seek to start a company with unique benefits such as 100% foreign ownership, tax advantages, and now, even opening a company remotely from abroad. Meanwhile, to some, this sounds too good to be true, and many people are uncertain as to whether they should take the leap or not. In this article, we will deflate some of the most common business setup myths about Dubai.
1. “I need to be physically present to form a company in Dubai”
You may still believe that you need to travel all the way to Dubai to set up a business. While this was true in the past, today, it is not necessary as the UAE has removed this barrier to make company formation easier for foreign business owners.
This means that you can now register a business and open a corporate bank account in Dubai from anywhere in the world – without a residency visa and even without a physical office space. This is a major game changer for foreign entrepreneurs who wanted access to Dubai’s business-friendly environment but could not travel due to lack of time or logistics issues.
2. “Business setups in Dubai are too expensive and only suitable for larger companies”
One of the misconceptions about Dubai is that you need to own a high revenue corporation or a holding business. And some believe you must be able to invest a sky-high capital when starting a business in the UAE.
Let us debunk this false belief for you, as forming a business in the UAE does not have to be expensive. The cost of your business journey in Dubai depends on the specific business structure you choose and the operational needs you have for your company. You can choose between a free-zone, mainland or offshore company, and they all come with different advantages whether you are a small solo founder or own a larger business. A professional consulting firm for business setups in Dubai can offer packages that include services such as business licensing, bank account opening, and visa acquisition at reasonable rates.
3. “You need a physical office to form a company in Dubai”
While this misconception is not entirely false, it is not correct either. When you wish to start a business in Dubai you have a range of business formation options to choose from. Some of these options require that you have a physical office space, such as the free-zone and mainland company options.
However, if you choose to form an offshore business you do not need to lease an office space in Dubai. Offshore companies are fully remote business formations that can operate from anywhere in the world, even from the comfort of your own home. Today, the UAE has made it possible to open a company and a bank account remotely, which means you do not have to step foot in Dubai to start a business. The new law also means that you do not need a residency visa or a local UAE phone number to form a company in Dubai.
4. “Starting a business in Dubai requires a local sponsor”
Again, a belief that is not entirely wrong – but certainly not fully correct. Establishing a company as a foreign business owner needs no local sponsorship when you wish to operate in one of Dubai’s 30+ free zones. You can own 100% of the company, which is why free-zone companies remain the most popular option for international founders.
However, companies on UAE’s mainland can face some restrictions. Before 2021, the UAE required local sponsorship to own 51% of international companies on the mainland. Since then, the law has undergone regulations and today, the UAE permits 100% foreign ownership for most commercial activities on the mainland. Restricted activities include strategic industries and operations related to national security. Therefore, understanding the laws that apply to the sector you wish to operate in is essential before you form a company in the UAE.
5. “The laws and regulations in the UAE are too complicated”
It is common for business owners who plan on expanding globally to worry that the laws in their chosen country are too complex and different from what they are used to. It is completely understandable that if you operate in, say, Europe, the Americas, or any other region in the world, you may have no clue as to what is up and down in the UAE.
However, the UAE offers a transparent regulatory compliance framework to make things easier for international company owners. For instance, licensing processes for business formation can be handled online within just a few days, and today, it is even possible to set up a company remotely from anywhere in the world.
If you are unsure, remember that you can always consult professional business formation experts such as Dubai Tradeshore to guide you. We recommend you always contact a consultancy firm to be sure everything you do is in compliance with the local laws and regulations.
