Key Steps

Dubai Company Formation | 5 Planning Actions Before You Incorporate

Have you defined your business objectives yet?

Dubai company formation is easier than it appears and your pain, hassles and delays can be minimized with help.

If yes, then please invest 2 minutes of your time to watch the video about Dubai company formation below. It spells out how you can benefit. Or if you prefer to read, then feel free to skip the video and go straight to the text below:

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Business consultants in the United Arab Emirates (UAE), are careful to arm themselves with a thorough knowledge of the market.

A current knowledge of the various laws and requirements of the country for foreign investors will expedite matters for you.

First time investors in the UAE might find its economic stability and zero taxes too good to pass up. You may want to note these 5 steps below.

Dubai Company Formation: 5 Planning Steps

1. Dubai company formation: Business analysis

Look at the various aspects of the business you are planning to start.

Do your Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. Do this for operations including suppliers and your product or service delivery process; marketing including sales and location; people and the talent you need; and the finances including at least a 3 year Profit and Loss and Balance Sheet projections.

Dubai Company Formation | 5 Actions Before You IncorporateYou probably are expert at one or more of the above.

And will be able to save money in that area. But you may have to spend more in other areas.

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2. Dubai company formation: Take care of it on your own

If your budget permits it maybe wiser to get outside help. If not you can do it yourself.

An outside consultant is likely to be expensive. And you maybe tempted to feel that you already know the business. Remember that almost 95% of new businesses fail within 5 years so it may be better to spend money upfront.

Even if you decide to do this on your own, do it. The analysis will raise questions for you and will help you to account for them.

3. Dubai company formation: Know the market and your competitors

Generally entrepreneurs have an unshakeable belief in themselves and their ability to face the odds.

Analyzing your targeted market both demographically and psycho-graphically will help.

Check to see if the market size of your targeted segment is large enough for your competitors and yourself. If not, prepare to spend money on new products and marketing.

Do the requirements of your targeted segment match your offering? If not modify your plan accordingly.

Dubai Company Formation | 5 Actions Before You IncorporateA competitor SWOT will help you to position yourself to better take advantage of their weaknesses.

If your market is growing rapidly entry for new businesses becomes easier as there is enough for everyone.

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4. Dubai company formation: UAE company registration location

You can choose to register your company in one of the 22+ UAE free zones or in one of the 7 Emirates of the UAE. Dubai is the most popular because of its larger market and investor friendliness. Abu Dhabi is the place to be for oil related businesses.

If you plan to deal with the government of any particular Emirate, then it is best to be registered in that Emirate.

In the UAE free zones you can have 100% ownership. But free zones don’t allow their companies to do business locally. So if you are thinking of retailing, restaurants or government supplies you may have to be registered as a local company.

For a local company a UAE national is required. Depending on the type of company he or she will be a Sponsor with a 51% share holding or a Service Agent who will receive a fee.

5. Dubai company formation: Financing options

Most small businesses start with equity funding from the entrepreneur and their friends and family.

Especially in the UAE venture capital or bank funding is unavailable for at least 3 years.

So the earlier analysis and financial projections become all the more important. There are always unforeseen situations that require money.

To ensure that the business functions smoothly entrepreneurs are advised to have at least 50% of their initial project cost available to them if needed.

Unfortunately this is sometimes very difficult and is often the cause of premature company closures.

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Key Steps was last modified: October 9th, 2016 by Ramapati Singhania

Ramapati Singhania

He strives for excellence in all he does and brings out the best in his people through guidance, a strong vision and support. He is exceptionally open-minded, flexible, dependable, understanding and straightforward in all words and actions and encourages personal as well as professional growth.

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