How to Choose the Best Place for Your Business in the UAE

Based on its rapid growth economy and readily business environment, the UAE has become one of the most favorable destinations for investors and businessmen worldwide. Identifying the right geographical market for your business in this diverse country may be challenging. They provide brief information on several emirates to facilitate the understanding of the capabilities and potential of each destination to the client’s kind of business.

Analyzing Mechanisms of UAE Business Environment

The UAE is comprised of seven emirates, each with its distinct character and economic focus:

• Abu Dhabi: Abu Dhabi is the UAE’s richest emirate and is the capital it plays the role of an economic hub. Popular to be the hub of the oil and gas industry it is equally cultivating the financial sector, Information technology, and tourism. Due to its high GDP per capita, good infrastructure, and the support that its government gives, it is welcoming to big investments and MNCs.
  
• Dubai: Dubai is known as an international city of commerce and trade, global tourism, and glamour. Its favorable structures embrace it with state of art infrastructural base, tax haven, and strategic position thus widely attracting firms dealing in trades, logistics, estate, as well as hospitality industries.
  
• Sharjah: Being the cultural and industrial capital of the UAE, Sharjah provides a cheaper business environment. They are most appropriate in business particularly manufacturing, trade, and even educational sectors.
  
• Ajman: The smallest of all the emirates, Ajman’s economy relies on trade, pulses industrial development, and tourism. It provides a comparatively cheaper business atmosphere as well as lenient policy restraints.
  
• Fujairah: Being a port city, industrialization, and the manufacturing and logistics aspects are gradually becoming popular in Fujairah. It also has natural scenic views that help in the attraction of tourists.
  
• Umm Al Quwain: Just like Sharjah, Umm Al Quwain is also another of the seven emirates, but it does not have large commercial importance as it provides a calm atmosphere for businesses and mainly concentrates on trade, fishing, and light industries.
  
• Ras Al Khaimah: Establishing itself as a manufacturing and industrial powerhouse of UAE, Ras Al Khaimah has a comparatively low cost of establishing a business and measures industrialization with a serious spirit.

How to Choose the Best Place to Set Up Business in the UAE

1. Determine the option between the mainland and the free zone first

In a nutshell, the initial questions that you need to answer are whether you prefer to establish your business in the UAE mainland or a free zone. A UAE mainland company therefore covers all business entities based in the emirates and operating under state laws. However, free zones are organizations in UAE that are formed as special economic zones with their legislation. In UAE alone, the free zones currently number over 40 and are still growing.

Some major advantages of setting up your business in free zones are:

– No or very little amounts of corporate taxes

– Configuration of the general requirements needed for your kind of business.

– Companies that are legally incorporated entities may be 100% foreign-owned.

– General easy procedure for business registration and more.

It is preferred for you to consider free zones if you want to venture into business in the UAE. Nevertheless, it would be good if you pointed out the details differences between the mainland and the free zones.

2. Permitted types of business activities

After defining between mainland and free zones, the next crucial factor that needs to be decided is the nature of business operation. Some of the emirates in the UAE allow the conduct of several economic activities.

When you have a clear conception of the specific kind of business activity, you will perforce gain a clear perception of what countries are ideologically favorable to that kind of business. At some moments it can be observed that your business activity corresponds to more than one type of business activity that requires a license. In this case, you proceed with a free zone that opens many business activities and also permits the client to apply for more than one business activity license.

Permitted business activities include a lot of options in free zones where you can establish your business.

3. Consider the types of facilities you require.

Now that you have a clear understanding of your company activities, the following step is to verify that you have all of the essential facilities to support them. In most circumstances, you will require a physical office for your firm. Depending on the nature of the firm, you may be able to get away with a shared co-working arrangement or require a full-fledged office space.

Second, you may need to consider other requirements such as warehouses, labor accommodations, and so on. Ensure that you have easy access to all of the services and infrastructure required for effective business operations.

4. Determine if the place will be good for your business or not

Thus, according to the type of your business activity, location is a very important factor for the success of your company. Suppose you are considering opening an import/export company in the UAE. In this case, the accessibility of the port and other transit centers will in one way or another influence the unit’s economics.

Likewise, the nature of your business may be that you would need to have, for example, periodic meetings with different individuals constantly coming and going. Under these circumstances, it would be advisable for you to have an office nearer to the nearest airport.

Ensure that there is a clear understanding of the connectivity of the region in terms of different business needs. In the long run, it will be of much benefit to the business and make it a success.

5. See what legal entity types are allowed

Another consideration when focusing on the choice of the best location for starting a business in the UAE is business entity type. Different types of authorities in the UAE permit a certain type of commercial legal entity. Hence, the nature of business determines the laws that surround the business venture.

In UAE free zones, there are primarily three types of legal company structure allowed namely: In UAE free zones, there are primarily three types of legal company structures allowed namely:

– A Free Zone Limited Liability Company (FZ LLC).

– Free Zone Company is the abbreviated form of FZ Co.

– Free Zone Establishment(FZE)

6. Discover the format cost of developing the business plan

Last but not least, you would also consider the characteristics of establishment cost by various jurisdictions of the UAE. Licensing fees, rent, visa fees, and so on should be factored into your budget. All of these will aid and assist you in coming up with a close to accurate estimate.

The business setup cost is going to differ jurisdiction-wise in the UAE as follows: The estimates will also enable you to choose the most suitable location for starting a business in the UAE.

Find the Right Free Zone to Register Your Business

Our seasoned team of professional experts and lawyers is a powerhouse of experience; drawing from years of expertise in exercising client corporate presence and business development throughout the UAE.

Bizdaddy is here to assist you in identifying appropriate free zones for your business operation so that you can realize the competitive business environment of the UAE.

Frequently asked questions

Q: Mainly how and what does it take to start up a business in the UAE mainland and how does it differ from having a free zone business?

Ans: UAE mainland = onshore company registered under the state law while free zones are geographical zones with their own set of laws. There are characteristics available including low/ no corporate taxes, full foreign ownership, and easy business incorporation processes.

Q: Identifying the facilities that are relevant while establishing an organization in the UAE.

Ans: Define how much commercial and/or industrial space you require for your offices and/or warehouses, and lodging for your personnel. Make sure the selected place has adequate structures and utilities that will support the rightful functioning of the business.

Q: What is the relevance of site selection when establishing my business in the UAE?

Ans: The place may affect the effectiveness of your business to a large extent. For example, if one is running an import/export company, then accessibility to the port and transportation intersecting points is vital. There is also an advantage to having a location close to an airport when there is the need for numerous meetings as might be the trend in business organizations.

Q: Which legal structures am I allowed to create in a UAE-free zone?

Ans: UAE free zones permit three legal company forms to be opened, which include the Free Zone Limited Liability Company (FZ LLC), Free Zone Company (FZ Co.), and Free Zone Establishment (FZE). Depending on the chosen entity, different regulations apply to decide one or another action.