I have witnessed the remarkable transformation of Dubai, UAE, into one of the best places for aspiring entrepreneurs to start their businesses. Dubai's economy is booming, thanks to the increasing number of people who are pursuing their dreams of setting up their SMEs (Small and Medium-Sized Enterprises) in the city. An SME is any business that has less than 250 employees. As a business setup consultant since 1999, I have helped many SMEs establish and grow their ventures in Dubai."

You must know SMEs are the backbone of innovation and economic boost in Dubai, as they add diversity and increase the scope of employment in the city. Moreover, they also play a major role in developing the local communities. 

Around 95% of all business establishments in the city of Dubai are SMEs! Not just that, but comparing the economic contribution, SMEs are responsible for contributing to around 40% of the total GDP, alongside 42% of overall employment. 

With these statistics, you might now have clarity on how productive and profitable it is to start a business in Dubai and scale it to the optimal level. 

So, if you want to start a profitable SME business in Dubai, you ought to keep in mind some integral steps and considerations. If it is the first time you are planning on setting up a business in such an economically booming city, this article will act as your guide to help you take note of the essentials. 

Why Set up an SME Business in Dubai?

As the statistics speak for the SME culture in Dubai, in elaboration to those facts, you must know that SMEs tend to play the central role in scaling the private sector of the UAE economy. In 2009, when the UAE experienced a downturn in its economic growth, the country went into some form of financial crisis. 

To overcome it, business communities were segregated, and entrepreneurship was catagorised. Thus, it led the country to foster innovation and creativity, encouraging all knowledge-based business ideas to get established in all of UAE. 

The entrepreneurs were then encouraged to start their companies in the country, and most individuals chose Dubai to be their main office center. With the majority of the country’s SMEs being registered in Dubai, it was concluded that this city understands the credibility of budding entrepreneurs, making it an ideal place to start a business. 

Some of the reasons that will convince you to start a SME business in Dubai are:

• In Dubai, you will get to attend a lot of high-profile exhibitions or events, which can be a great platform for you to seek investments or sales opportunities, supporting your substantial growth.
• Both the private sector as well as governmental agencies are creating a reserve for supporting the SME businesses in Dubai. As per some reports, it is stated that the Emirates Development Bank is all set to approve around AED 30 billion to support SME and large corporate financing by 2026 across 5 major industrial sectors.
• Dubai SME tends to offer some conveniences for all the entrepreneurs to start their businesses in Dubai. You will be provided with flexible interest rates, relaxation of laws, and easy instalments.

How to Start a Small Business in Dubai?

Now that you feel convinced about starting an SME business in Dubai, the next important thing to consider is the steps you must implement to get started with the quest. So, the well-curated steps to assist you with setting up your SME business in Dubai include:

Do a Thorough Market Research to Pick Your Niche

When you tend to start your business in Dubai, don’t focus on market research. It is because you must be able to choose the right business domain, ideal for your success. There are several business domains in Dubai, ideal for you to start your SME. 

You must do your market research and decide on which sector would be thriving for your quest. Some of the domains that would be profitable for your SME business are:

• Real estate
• Vehicle rentals
• Brokerage
• Logistics
• Manufacturing
• Refining
• Consulting
• Carpentry
• Agriculture
• Tourism
• Craftsmanship, etc.

Choose the Name for Your SME Business

The next step is to choose the perfect name for your new business, which will align with the market as well as the industry segment you will operate in. You must pay emphasis upon checking if your business name complies with the local regulations or laws. 

It will help you filter out the names that are already being used or are similar to some of the existing companies. In addition to that, some of the terms are considered derogatory in Dubai, which must be avoided, too. Once you satisfy all the name criteria, you will be one step closer to getting the business licence in Dubai. 

Choose a Location

Now, you must find a location to operate your business from. When in Dubai, the potential SME entrepreneurs have two options for forming a company, one is the free-trade zone, and the other is mainland. 

Remember, if you decide to operate in the free zones of Dubai, you won’t be liable for paying corporate or personal tax. For the SMEs or startup businesses, the tax-free zones are considered better. 

You must go with mainland Dubai to set up your business only if you intend to provide business-centric services to the clients or customers. This way, you will be able to provide high-ticket services and keep your profits, even after paying off the minimal taxes. 

Get Those Initial Approvals

Here, you will be getting your approvals for acquiring the business licence. First, you must get the ‘No-Objection’ from the DET (Department of Economy and Tourism) of Dubai by applying for the same online or by hiring experts. Following that, depending on the business type, you will be asked to submit a set of documents which includes:

• Exhaustive business strategy.
• MOA (Memorandum of Association)
• Photocopies of partners’ passports.
• Certificate of Trade Name Reservation
• Copy of VISA
• Initial certificate of approval
• Emirates ID
• Government forms as applicable
• NOC of shareholders
• Copy of tenancy contract

Remember, these documents are not all mandatory to be produced for select types of SMEs. You will be prompted to produce only the relevant ones for your specific case. Once you have all of the above documents ready, you must cross-verify to see if your company requires any additional approvals for specific licences. 

Once all the documents are acquired for select verifications, you can then send the same to DET for approval, along with the fees. Once the payment voucher is generated over the site, you should transfer the amount within 30 days. Otherwise, the transaction will be cancelled. 

Upon successful validation of the documents by DET, you will be provided with the business licences. Upon acceptance by DET, you will be provided with the MOA, Incorporation Certificate, and all other legal papers. Once you have them, the next step is to apply for work permits, lease agreements, VISAs, and other things as required.

Start Your Business Bank Account in Dubai

Once the registration and licence-acquiring process is completed, you can now open your corporate bank account in Dubai. All foreign entrepreneurs must have their respective corporate bank accounts while operating the business in Dubai, because the UAE follows some strict laws associated with money laundering. 

What are the Benefits of Starting a SME Business in Dubai?

Some of the benefits associated with starting a SME firm in Dubai are:

Embrace the Perks of Running a Business in Commercial Capital:

Dubai is among the top cities in the world with a booming commercial hub. It offers a lot of benefits for new businesses, including liberal taxation rules, better administrative infrastructure, and others. 

Immense Tax Benefits:

The UAE government has proposed several regulations to make the country business-friendly for both locals as well as foreign investors to avail tax benefits. Foreign investors don’t have to pay any capital gains or personal taxes in Dubai and have just VAT of 5% being implemented. 

Easy Aviation Connectivity:

For all the budding entrepreneurs who want to start a business in Dubai might feel the necessity to fly to & for more often, for the city offers seamless aviation connectivity. 

How Much Does It Cost to Start a Small Business in Dubai?

The actual cost of starting a SME business in Dubai might vary depending on your specific considerations and choices. But on average, setting up an SME in the free zones of Dubai will cost somewhere around AED 4000. The traditional, industrial or service licence will cost you in a range of AED 10,000 to 50,000 every year. 

Start your SME business in Dubai with Kiltons!

Now that you have gone through the steps on how you can set up an SME business in Dubai, you are ready to take the approach. But for fresh entrepreneurs, following these steps might be overwhelming, as a simple mistake in the application or the sourcing of documents can get your application rejected at DET. 

Therefore, as you plan your business initiation and growth in the booming city of Dubai, why not let experts handle your registration and setup aspects? Well, this is where Kiltons come to play! We will be providing you with an all-around service proficiency to get your legalities done right for acquiring all required licences. You just have to focus on starting and running your business while all the backend jobs will be done by us.