Just like in every successful and developed country, small business in the UAE is the backbone of the national economy. It plays an important part in the country’s diversification, reducing its dependence on oil and gas while helping develop other industries. Small business is the key element of the country’s economic stability. It creates new jobs and contributes to the growth of GDP. This is why the government is creating the most favourable conditions for small and medium business, which attracts foreign investments. Our article will describe in detail the specifics of the small and medium business sector in the UAE and how to start a small business in Dubai or any other emirate.
Specifics and advantages of small business in the UAE
Official statistics show that small businesses in all seven emirates of the UAE currently account for more than 60% of the country’s GDP. At the same time, 90% of registered companies and enterprises in the UAE are micro and small enterprises. Most of them are operating in the segments such as:
- tourism and hotel business;
- light industry;
- healthcare and fitness;
- transport and logistics;
- professional training an education;
- food service and restaurant business;
- services (consulting, SPA, hair and beauty salons, car repair shops and carwash, cleaning and other services).
Main advantages of small business in the UAE
The environment is constantly getting better for small businesses in the UAE thanks to a dedicated and smart state policy, which creates favourable conditions for doing business for people who do not have a big start-up budget, including foreigners. Efficiency and profitability of small business is increased owing to liberal tax policy, which includes:
- no income tax, export or import duties;
- no income tax for employees of enterprises and companies;
- no requirement to submit external financial reports;
- no fiscal control.
In addition, starting and developing a small business in the UAE is made much easier thanks to the following:
- simple company registration procedure;
- affordable energy prices;
- quick access to the labour market and easy recruitment of skilled workers from different fields, including from other countries;
- healthy demand for various goods and services thanks to high living standards of citizens of the UAE, among which are many dollar millionaires, as well as an influx of tourists from different countries;
- numerous free economic zones with unique business conditions, which provides a wide range of location options for enterprises or.
The UAE government constantly devotes attention to the development of small business as one of the most important sectors of the economy. This includes adjustments to legislation and removal of regulations that deter foreign investors. Last year, the government lifted a provision requiring foreign investors that start a local company to have a co-owner UAE citizen holding 51% of shares. This decision opened direct access to the UAE market for foreign companies and eliminated the need for an intermediary.
Cost of starting a small business in Dubai
Starting a small business in the UAE does not require major investments. To prove this, we will give you several examples of original business ideas that generate decent income while requiring only a small investment:
- invest $20,000 or even less to launch production of souvenirs, start a travel business by arranging several custom tours around cities and attractions, or open a small shop for luminescent car painting;
- up to $40,000 is enough to open a dry car wash, production and sales of soft ice-cream or cotton candy;
- $40,000-65,000 is enough to start production of biohumus, which is likely to enjoy strong demand in the country that is located in a desert and thus lacks soil for plant cultivation;
- investing over $65,000 will make it possible to launch production of stretched ceilings or start other original enterprises.
You can come up with many other ways of investing such amounts, while specialists of Dynasty Business Adviser will suggest the best location to start a company in the UAE or which type or legal structure to choose.
How to start a small business in the UAE
The following steps are required to start a business in the UAE with minimal investments:
- analyse the country’s legislation as well as the market’s needs for goods and services that you plan to sell;
- make sure you are able to obtain a license for your type of business activity as well as import permits;
- find a business model that suits your goals best;
- register a company and acquire the necessary licenses. You can open a local firm, a Free Zone company or an offshore company;
- obtain a permit for import of products that includes certification of product groups;
- open a corporate account in an UAE bank.
Dynasty Business Adviser specialists will help you complete all these tasks, providing you expert consulting support and taking over the whole set of works needed to start your enterprise. We are a licensed registrar of onshore and offshore companies in the UAE and we will help you start a small business in Dubai or another emirate within a short timeframe. Our office is located in Dubai, which means you will spend less time and money on flights.