The UAE is famous for its pro-business environment, attractive tax system and transparent legal mechanisms. Yet, there are still some challenges faced while doing business in the UAE, that businesses should be aware about. In any case, you can always consult companies like GCC Filings for help with company incorporation, VAT registration, return filling, auditing, accounting and other needs.
Here are 10 Main Challenges of doing Business in UAE
- Company Ownership
In case any individual wishes to establish an onshore company or limited liability company (LLC) in the UAE, they will compulsorily need a local sponsor. This will naturally make it compulsory to have a local partner who has 51% ownership. Developing mutual trust is a major challenge in some cases.
- Getting your local sponsor
Challenges for investors pertain to finding local sponsors who can be reliable and trustworthy since they will own the majority stakes in the entities while giving you ample freedom to take care of running the business on your own terms and conditions.
The 5% VAT was implemented in the year 2018 across the UAE and is applicable for almost all types of goods and services excepting healthcare, food items and education. Registration for VAT and related procedures can be challenging if you do not have a company like GCC Filings to help you with the same.
- Funds for Projects
If the business is in the stage of commencement, it can be tough to get funding from the UAE banks since the key requirement for business loans is 3 years of audited financials at least.
- Cultural Aspects
You should have clear understanding regarding Islamic culture and ways of life prior to setting up your business in Dubai or any other part of the UAE. Islamic customs should be followed across all walks of life including business interactions.
- Communicating with locals
Communication is something you will grapple with, initially. Women and men have to be communicated with in different tones. The formalities in the UAE may be hard to initially understand as far as expats are concerned.
- Employment Market
Once you establish your company in UAE, you will have to hire employees for running the business and there are specific regulations for the same in the UAE. This includes company obligations for giving visas to employees for being eligible to work.
- Revenue Management
Cash flow and revenue management is something that may be a challenge in the initial stages along with auditing and accounting. GCC Filings may be of great help in this regard.
- Specific Business Information
You should have complete information about your specific business type, suitable region, habits, cultures, lifestyles and other market trends.
- Managing People
People management is regarded as a must for setting up a successful business in the UAE. The UAE has one of the most diverse and cosmopolitan global workforces and you will have to learn suitable people management.