During bad times and good, there will be foreigners who will want to start a business in Dubai, a Middle Eastern financial hub in the oil-rich country of the United Arab Emirates. Starting a business in Dubai is not difficult, but how you proceed can determine the success or failure of the business. The easiest ways are either to buy an existing business or by going to a free-trade zone, such as the Jebel Ali Free Zone created by the Dubai government in 1985. Any other way requires a local business partner, which can become problematical if one is not careful and takes the wrong steps.
Things You'll Need
Local business partner
Registration requirements and licenses
1. Research the region, the people and their special traits and the industry you want to compete in. A good knowledge of the region and its people, their customs and special traits will help you properly treat those with whom you have to deal. Knowing the industry will help you develop a good business plan.
2. Deposit $10,000 to $50,000 in a Dubai bank and get proof of this deposit to show the Ministry of Commerce that you have the resources and can guarantee any liabilities. This amount can be withdrawn later and can be used for your other capital needs.
3. Select and arrange for a "business partner" as required by local laws. If he has good connections, a lot of things can move faster. This "sponsor" has to own, even without putting in capital, 51% of the business and can thus also give you problems, more so when you need to liquidate the business.
4. Get a good local lawyer, not only for normal legal requirements such as licenses and registrations and contracts but also if you foresee problems relative to your having to give up effective control of the business to someone who has not put in any money.
5. Choose and register the type of legal vehicle to use, whether share or general partnership, joint venture, public or private shareholding company or a company with limited liability. You will also need a license corresponding to your type of business, be it trading, manufacturing or services.
6. Get a resident visa and find a place to live and a place for your offices. Proceed to carefully hire the local personnel you will need, and open whatever other bank accounts you will need.
Tips & Warnings
While your partner has to have majority ownership of the business, she can be made to sign documents saying the business is really yours. To do this, she will normally ask for a monthly or annual fee. The government encourages and supports new businesses. Locating in a free-trade zone provides benefits such as not having to have a local partner, full repatriation of capital and no corporate or personal income taxes. A good, long-term relationship can develop with an Arab partner if you show you are trustworthy, patient and polite and helpful. If you request rather than demand and treat subordinates well, this will go a long way.
If you are not careful, your Arab partner can take advantage of any weakness in your business. He can even legally shut down your business. High oil prices have historically made Dubai, and other oil-rich areas of the world, great places to do business in. For some businesses, the opposite can be the case when oil prices contract substantially.