Success tips when doing business in Dubai
Know the business environment in Dubai
- The week commences on Saturday and extends through Thursday, Friday being the day of rest. Government offices are closed on Thursdays and Fridays;
- Your joint venture partner or Dubai shareholder must not merely be a nominee for the sake of meeting the rules of foreign company incorporation. You should choose a partner that actually brings a lot to the table, including local knowledge your business would need in Dubai;
- To optimize the success of your new business in the UAE, Healy Consultants recommends every company to i) complete a feasibility study, ii) prepare a detailed business plan, iii) communicate with the Dubai Chamber of Commerce, iv) speak to your local UAE embassy and v) communicate with Healy Consultants Clients who have successfully launched their business in Dubai;
- Foreign companies should be aware that i) Dubai statistics and market data are usually imprecise, ii) transactions tend to take longer than expected, iii) more frequent and long market visits are required, at least initially, iv) complex business procedures are common;
- An essential factor in Dubai company registration is to thoroughly research the business sector you are planning to invest in. Healy Consultants recommends our Clients prepare a detailed business plan including an extensive market study and evaluation of competitors.
It is important to understand the business culture in Dubai
- During business meetings, Arabs spends a lot of time discussing things in general and then once they are comfortable, they will talk business with you. Expecting them to directly come to the point and discuss business is seen as rude and must be avoided;
- Foreign entrepreneurs need to be aware of how they must treat woman in the workplace. Examples include:
- Not all UAE woman are comfortable shaking hands with foreign men. You need to wait for a woman to put her hand out first before putting forth your own hand;
- Also it is not acceptable to touch a woman even in a friendly manner on the shoulder or other places at any time in the office;
- It is common for men and woman to sit at different areas of the office. What this means is that you need to designate part of your office where all men would sit and another part of your office where the women would sit.
Other etiquette to be aware of
- If invited to the home of an Arab, you should always accept and take every opportunity to become acquainted with local people. Your Arab host will be generous and interested in you. However, you should avoid debating politics and religion as your opinions might be regarded as ill-informed or even offensive, even if they seem acceptable to you from a western perspective;
- Learn enough Arabic to communicate the pleasantries, greetings and responses. You will enjoy peoples’ reactions. However, it is important to use the Arabic language respectfully because the Arabs believe it is designed to carry the word of God;
- Arabs are hospitable and place a great deal of emphasis on an outward expression of politeness and quiet demeanor. Arabs rarely say a direct ‘no’ to a proposition, so you must listen and observe carefully. If the response is ‘leave it with me’ or ‘I’ll think about it’, there’s a good chance the project will go nowhere;
- Avoid putting an Arab in a position where he might suffer ‘a loss of face’ in front of other Arabs. He will especially appreciate this, if he notices your action;
- While Dubai is considered a cosmopolitan city, it is still an Islamic state and follows the Islamic culture. It is important for foreign companies to respect this and make themselves aware of the Islamic traditions in business.
Interesting facts about Dubai
- The word “Dubai” may have evolved from the word “Daba”, referring to the creeping pace of Dubai river flowing inland. Today, the city’s rapid growth could be anything but a creep. In 1991, there was one skyscraper taller than 100 meters. Today there are over 400, making it the fastest growing city in the world;
- Since 1833, the reigning Al Maktoum family ruled Dubai. Since oil was discovered in 1966, the city has prospered. Today, oil revenue contributes a mere 20% of the economy’s income. The majority of emirates income is from the financial sector, tourism, real estate and ports. Dubai is the world’s third-largest import and export hub after Hong Kong and Singapore;
- The population of Dubai is two million. Expatriates make up 82% of the population. Arabic is the official language and English is the dominant language in business;
- Cigarettes are subject to a 100% customs tax and the alcohol a 50% customs tax;
- The UAE became a member of the United Nations and the Arab league in 1971. It is a member of the International Monetary Fund, the Organization of Petroleum Exporting Countries, World Trade Organization and other international and Arab organizations;
- The Burj Khalifa is the world’s tallest skyscraper at 828 meters, took 6 years to build at a cost of US$1.5 billion. Burj Khalifa comprises 163 floors, 900 apartments, 304 hotel rooms, 35 office floors, 9000 parking lots and 57 elevators.
Frequently asked questions
What does a free zone Dubai company incorporation entail?A company incorporated in one of Dubai free trade zones is considered an offshore company. The Dubai free trade zones are tax-free and provide purpose-built facilities for offices and related activities.
What is meant by a Dubai Offshore LLC?A Dubai offshore company incorporation allows investors to open a wholly foreign-owned tax exempt entity. However, a Dubai offshore company can not conduct business within the UAE.
What are the advantages and disadvantages of onshore Dubai company incorporation?Onshore Dubai company incorporation allows trade within and outside the city. However, a UAE national must hold a minimum of 51% of the company’s shares in an onshore entity. This would be strictly a nominee role and Healy Consultants can provide this support service, if required.
What type of documentation is required for setting up a company in Dubai?This depends on the type of company you wish to establish. Healy Consultants will provide you with a detailed list of requirements to minimize this burden.
How long will it take to incorporate a company in Dubai?The length of time varies greatly from one Dubai business registration to another. Healy Consultants will provide you with a detailed project plan upon business registration engagement.
Is there a public register of shareholders and directors in Dubai?Yes. Details of the directors and shareholders will be available for public viewing through the Dubai company register.
Is a Dubai company required to prepare financial statements?Yes. Financial statements need to be submitted to the Dubai government annually.
Can a Dubai offshore company trade within the UAE?No. Export/import through an offshore company can only be outside the UAE