With one of the most liberal trade regimes in the GCC, UAE is the perfect launchpad for any entrepreneur to start their business, regardless of the sector or size. In 2019, UAE occupied the 16th position out of 190 economies in the ease of doing business. It is a global business hub that seamlessly connects the east and the west and offers a host of benefits, including a stable political system, business-friendly taxation regime, and strong capital inflow.
While it may be tempting to set up your company in the UAE, you need the perfect strategy to sustain your business and get ahead of the competition. Unless you are sure that the UAE market is the ideal fit for the product or service you want to launch, your business may crash and burn even before it has a chance to flourish.
In this article, we’ll tell you five tips to enter the UAE market successfully and set up a profitable business:
Know the market inside out
When you are entering a new market, studying the market closely is crucial for identifying the various factors that may impact your overall business. That’s why market research is an exercise you cannot afford to ignore. Apart from giving you a sense of the competition you are about to face, it also provides valuable insights about the product-market fit. For example, there has been a surge in demand for digital learning in the UAE over the last couple of months. If your product or service is geared towards the digital education segment, you’re likely to be more successful.
With the help of market research, you can also identify more opportunities in the market and work out a strategy for the growth of your business.
Carry out a feasibility study
Is your business idea worth your time? Do you have sufficient cash flows, human resources, and logistics to help the business sustain itself? There’s only one way to know, and that’s through a feasibility study.
A feasibility study is more than just testing the waters. It is a SWOT analysis of your business idea to help you evaluate its viability. It provides you a fair assessment of questions such as:
- Amount of funding you will need;
- Key constraints and obstacles; and
- What are the reasons to proceed or not to proceed.
Typically, the feasibility study is conducted before writing down the business plan.
Once the feasibility study has provided you an assessment of your idea, it is time to iron out the kinks through a business plan. It helps you to articulate thoughts into actionable items.
Your business plan is going to be a critical document when you start approaching investors or business partners. Marching ahead without a business plan in place is a sure-shot way to kill your credibility.
Most founders falsely assume that a business plan has to run into 100 pages. It couldn’t be further from the truth — a business plan can be just a couple of pages too. What matters is the substance of your business plan and not the length. So long you answer the most critical questions about your business that anyone may ask you, your business plan will work.
Start by writing down the mission statement before moving on to answering more specific questions such as:
- USP of the product/service
- Why do you want to launch it
- What’s your marketing strategy
- What about financial projections
Understand the legal framework
The UAE has a unique legal framework. If you want to enter the UAE market successfully, you need to understand the nitty-gritty. For example, the Emiratisation policy makes it mandatory for all companies with 100+ employees to hire a fixed number of UAE nationals. A non-UAE national requires a work permit and residence visa to work in the UAE legally and must comply with applicable regulations of the General Directorate of Residence and Foreigners Affairs and the Ministry of Human Resources & Emiratisation.
Not having a thorough understanding of the legal framework can increase your chances of non-compliance and put your interests at risk.
Choose the right business structure
How you set up the business entity in the UAE can have significant implications on market access.
For example, you can open a Representative Office, but it can only perform limited activities such as promotions and branding, provided a UAE national is appointed as a local agent. You cannot use a Representative Office for commercial transactions. Any company established onshore or in the Free Trade Zones must procure a business license before commencing operations.
Failing to adhere to these legal requirements can prove too costly for your business.
Need help to pursue business opportunities in the UAE and successfully enter the market?
UAE is an extremely promising market that offers boundless potential for success. With a proper strategy in place, you can set up a business and enjoy the perks of a liberal trade regime. But as an entrepreneur, you may not be well-versed with the ground realities of the UAE. After all, entering a new market is not straightforward. You need a clear understanding of the market, consumer behavior, compliances, and local business culture. That’s why partnering with a business specialist can provide you competitive intelligence to help you soar high.
Centurion Consulting LLC offers business consultancy services to help your business grow and expand in the UAE. Our team of highly-qualified financial, commercial, and business analysts assist foreign investors with their entry into the UAE market. We will guide you through this process and advise you about the compliances and regulations you need to adhere to for successfully doing business in the UAE. To learn more about how we can help you, set up a 45 min free online or offline consultation session with our experts.
