Starting up on your own at the outset can seem to be a herculean task.
Having started a business 8 months ago, I can vouch for the ease in which business setup and operations can be done in the UAE. Now, with SHERAA going out of their way to create business opportunities for young ones, it’s even easier.
Here’s a step by step checklist to keep in mind when you’re starting your journey to becoming an entrepreneur in UAE, whether you’re 23 or 55:
1. What are you offering?
The first prerequisite for starting out on your own is to offer some kind of niche product/service not readily available in the market yet. Identify your product/service definitively. Position yourself with service that has not been out in the market in the recent past.
2. A Solid Business Plan
Your product is only as good as your pitch – at least for you financiers.
When you’re taking on an existing competitive market, you need an airtight and sound business plan that goes into extraordinary detail. Moreover, investors are always about ‘comfort and confidence in the businessman and then the business’ – so you have to strike a chord with ‘you as an individual’ before all.
At the beginning, you could look to Venture Capital funds for support. They usually try and aid startups in the best way possible.
4. What type of license do you need?
If we take the UAE, the concept of virtual offices has grown at a considerable speed. However, you can only use a virtual office if you’re offering services or consultancy.
Trading of goods cannot happen under virtual offices licensing regulations.
In my understanding, it’s easier and more economical to start a company as a virtual one than to start off with a huge amount of expenses owing to rent, electricity and water supply, local partner etc.
Now, what does a virtual company really mean?
You can have an office in one of the free zones namely, Fujairah, RAK, Ajman and Umm Al Quwain. Your operations can be global, but you will be based at a desk in one of the free zones and entitled to a conference room for your meetings upon request. The conference room may be booked in Dubai too.
4. If you’d like sole ownership, it’s yours
When setting up a virtual company, the advantage of 100% share ownership exists and the company is solely under your name, unless it’s a partnership with a colleague, in which case it will be under both the partner’s names.
5. How much will it cost you?
Anywhere between AED 12,000 to AED 19,000 for the license fee, depending on where you get it from.
The total cost of setting up a virtual company under Fujairah Free Zone, as an example, if no visa is required (as female graduates can be under their father’s sponsorship) comes to AED 17,000 license fee + 2,500 cancellation fee (if we wish to cancel after some time, they take half of the cancellation fee as deposit up-front).
This amount above is only for the first year. Second year onwards, the license fee of AED 17,000 is to be paid (every year).
6. How long will it take and what documents are required?
Once the initial paperwork is done, it takes about 10 to 15 days at Fujairah Free Zone.
The setup is very simple and asks for your passport information, Emirates ID, and Guardian’s passport details. In addition to this, you will have to provide a brief outline on company operations and select a name for the company.
If you’re to give the name beforehand to a consultant, they can block the name for you – similar to blocking domains for websites on go daddy!
7. How long do you wait?
Around two weeks later, you will receive the company trade license, share certificate, articles of incorporation and a company seal.
Another added advantage in starting a virtual company is that if you’re a sole proprietor, you get to start an LLE company.
An LLE is a limited liability establishment is a setup in which the owners cannot be held responsible for debts/losses.
Similarly, there are companies that deal in other free zones, like:-
- Ajman Free Zone : http://www.savvysetup.com/
- RAK Free Zone : https://www.stalawfirm.com/en.html
- Umm Al Qwain : http://uaqftz.com/
Are you an entrepreneur in UAE? Tell us what you thought of this piece in the comments below!
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