Jenny Hunt
- Sep 12, 2019
- 8 min read

10 Tips For Expanding Your Business To Abu Dhabi Or Dubai

12th September 2019

Following are our top 10 tips for expanding your business to the UAE, be it Abu Dhabi or Dubai. Taking some time in advance to research the market, plan your strategy and build your connections will save you time and money in the long run, as you will be making informed decisions about expanding your business into the UAE markets.

It might surprise you to know that many companies jump in, don't do any research or due diligence when expanding their businesses to the UAE. They are subsequently forced to make changes which can take time and money or have to put up with the consequences of their poor initial decision making.

We want to see companies expand their businesses to the UAE because they see a genuine opportunity for growth and for their products or services to bring added value to the market here. Therefore our tips are based upon our first hand experiences of helping lots of other companies expand into Abu Dhabi and Dubai and hopefully your business too.

TIP 1 - Research The Country

To expand successfully into Abu Dhabi or Dubai it would be beneficial to know about the UAE. To understand the UAE's culture, political structure, economical position, business environment etc... Whilst the cities of Abu Dhabi and Dubai are just an hour and a quarter driving distance apart, you might be surprised to learn that they are actually very different and thus doing business in each is different too.

TIP 2 - Research The Market

Launching any new business is always an exciting risk, but it can be an informed risk with the right research upfront. Before expanding your business to the UAE be sure to research your target market and the local competition. It will be important to understand where you products/services could fit in and if there is a need for them. This research will also identify if your products and services need to be adapted, as well as potential pricing points.

TIP 3 - Research The Legal & Tax Regulations

If you take only one suggestion from our list of tips, make sure that its this one. Knowing the legal and tax regulations is essential. Claiming ignorance will not help you if you fail to comply with the regulations in the UAE. Understanding the business laws will help you to determine the best legal structure for your business. You will need to know what corporate documents will be required to establish your business and what format they will be required in, for example corporate documents from overseas will require notarisation, legalisation at the issuing jurisdiction's Ministry of Foreign Affairs and stamping at the UAE Embassy in the home country. Once received in the UAE with all the required stamps, it will be necessary for those documents to be stamped at the Ministry of Foreign Affairs here, in either Dubai or Abu Dhabi, and if they were not originally drafted in Arabic, they will need to be legally translated into Arabic. Time and money will need to be allowed for this exercise. Knowing the local laws will also ensure that you are compliant when you start to employ staff.

Whilst we don't have corporation tax in the UAE, your organisation may be liable for tax in its home jurisdiction if you were to set up a Foreign Branch here. Also, Value Added Tax (VAT) was introduced in 2018, so its essential that your organisation gets registered at the appropriate time. Non-compliance can result in stiff penalties and fines, which can easily be avoided by doing the research upfront. There are many specialists here who can help you. For example, Gateway Group of Companies, can help you with corporate structuring and ensuring that you get the right license issued in the right jursdiction.

TIP 4 - Get Practical Help

As I mentioned at the end of the previous tip, the UAE is full of specialists to help you. Nobody likes paying lawyers, accountants, tax advisors and the such. However, my recommendation is to look at this as an investment rather than a cost. Such specialists are there to use their expertise and experience to help your company make the right decisions and ultimately to save money. You'll also find that many give initial consultancy free of charge. Gateway Group of Companies will provide an initial consultation free of charge to help you understand about expanding your business to the UAE, setting up, getting licensed, protecting your business etc...Remember, we are on the ground here and can give you practical advice and tips to save time, save money and protect your profits and be compliant.

TIP 5 - Choose Your Business Structure and Jurisdiction Carefully

The UAE is full of sales consultants trying to sell you the cheapest business setup. Its essential that you know what your goals are for doing business in the UAE and who your target market is. These things will help to determine which is the most appropriate jurisdiction for your business license. Carefully consider all of the options that meet your requirements, because there will be many variables to consider, which could affect the cost, the long term strategy etc...If someone is selling you just one product, then you aren't getting the full picture. Take a look at another of our articles "17 Questions To Determine If You Are Engaging The Best Abu Dhabi Business Set Up Provider" to help make your life easier and ensure that you make the right decisions for expanding your business to the UAE.

TIP 6 - Research Funding Options

If your business isn't in a financial position to fund its expansion to the UAE itself, be sure to explore the funding options available. Governments often have grants and support in place to help their home grown companies expand into international markets. They will also have trade advisors to help you and likely provide training too. Nobody likes to see a failure, so there are lots of programmes to help you get funding. For example, British companies can approach UK Export Finance (UKEF) for assistance and their mission is "to ensure no viable UK export fails for lack of finance or insurance". If such schemes aren't suitable or available to your organisation, then one of the common options is a bank loan or credit facility. Alternatively, your business may look to third party investors, such as angel investors where there is no repayment schedule affecting cashflow and they may be interested in a full active equity stake when the business matures; or private equity and venture capital investors which will likely take an active role in the business and possibly eventual buyout, so its important to know what your long-term goals are.

TIP 7 - Human Capital

This is always an interesting consideration. I have experienced so many organisations try to manage their UAE operation from overseas or send in staff from overseas. Whilst there is nothing wrong with this, its generally a slow burner due to lack of market familiarisation and connections or they just aren't doing business development. For companies which are willing to invest in employing a team locally, they generally hit the ground running (providing they have selected the right team). Investing in the right team, in line with your goals for market expansion is key and helping you to identify the most suitable employees for your organisation, not just based upon their skills and experience, but also considering their true fit in terms of behaviour, values, driving forces, acumen, practical competencies and dimensions of thought is also something which the Gateway Group of Companies can help you with.

TIP 8 - Insurance

Make sure you understand what insurances your business will need. In the UAE, it is mandatory for all onshore companies to provide health insurance to their expatriate employees. For Abu Dhabi visas, health insurance should be arranged via an Abu Dhabi registered insurance provider - if your organisation already has a worldwide policy in place, this won't be sufficient. Many free zones are also following suit and requiring for health insurance to be provided with all visas. You should also be aware of workers compensation obligations. Further, when tendering for projects, there may be commitments to have certain insurances in place. Reach out to a local insurance broker for expert guidance.

TIP 9 - Bank Accounts

Increasingly corporate bank accounts are becoming harder and taking longer to open due to due diligence requirements. As early as possible, start thinking about which bank your organisation might intend to use. Perhaps it will be an international bank that your business uses around the globe. Alternatively, you may opt for one of the local banks. Whichever route you choose, check out the fees, the minimum balance requirements, the document requirements for opening the account etc...The more preparation you can do in advance, the quicker the account will be opened when you need it.

TIP 10 - Networking

One of the great things about the UAE is that it is full of networking opportunities. Being a transient market, with people coming and going all the time, its essential for people to network when they arrive and to continue networking. The benefit of networking is two-fold, its an opportunity to meet other business people and build up your connections - you never know when you might need someone's help or indeed you might be able to help them. Even better if you are able to identify potential to work together. Networking is also a great way to keep in touch with what is happening in the market, so you can keep your finger on the pulse. There are plenty of business groups and industry associations in Abu Dhabi and Dubai, so get stuck in - you never know who you might meet. It takes just one person who could change the fortunes of your company forever.

Conclusion

To do business in Abu Dhabi or Dubai your organisation will need to establish a business license. Don't rush in and make the wrong decision. Instead invest a little time in the research up front, to find out all of the options that are applicable for your type of business, your goals and your UAE strategy. Weigh up the PROs and CONs so that you can make an informed decision. Spend time identifying the right partners or distributors, do your due diligence.

How can Gateway Group help your company expand to the UAE?

Gateway provides concierge company formation and nominee corporate sponsorship services to foreign companies expanding to the UAE. Gateway protects its clients’ businesses and their profits. It provides foreign companies with the peace of mind their business is secure, they have full operational control, their profits are protected and their local sponsor is responsive whenever they might need support doing business in a new market. We can also assist with ongoing compliance requirements, such as visa processing and trade license renewals. Furthermore, from a human capital perspective, we can help your organisation to ensure you have the right people in place, appropriately motivated and maximizing productivity - ideal for getting your multicultural teams to work. To discuss how Gateway can help your organisation to expand into the UAE, email us: info@GatewayToUAE.com

Written by Jenny Hunt, Founding Partner & CEO

Gateway Group of Companies, Abu Dhabi & Dubai UAE