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5 challenges faced by entrepreneurs in Dubai and ways to resolve them!

Entrepreneurs choose UAE to start their business overseas as they’ve researched and are amazed by the accelerated development of the region. UAE is always in the spotlight in the print and electronic media for its groundbreaking developments, reforming foreign investment policies, new startups, and corporate framework. 

Despite all the overlooked rumors about the slow economic growth of the region that crop up after few years, UAE is steadily surpassing the expectations of the current and foreseen investors and entrepreneurs with its next-level development, evolution, and growth.

However, here are 5 challenges that newbie encounter while setting up their business in UAE:

  1. Company Ownership

Forming a Limited Liability Company (LLC) or an onshore company in UAE restrains to have a local partnership with a UAE National. Additionally, norms also describe that investors can only have an ownership of 49% whereas 51% of stakes are upheld by the local National. 

  1. The obligation of a Local Business Partner

As mentioned above, the necessity of having a local national partner is probably the biggest obstacle that comes across the way of young entrepreneurs. As a matter of fact, there are only three ways of forming a company in UAE: Acquiring Professional Service License, Setting up Business in UAE Free Zone, or forming an LLC.  

  1. Possible VAT Application

To date, we all like the tax-free aspects of UAE, which offers excellent pro-business benefits to the corporate world, and apparently, this is the most significant reason that turned UAE into the supreme destination for new entrepreneurs to kick-start their business without any tax burdens. But possibly this is not the case anymore with the announcement of VAT in the year 2018.

  1. Revenue Management

Revenue management is important in the UAE. And not only in UAE but in business, because along with the plethora of opportunities comes along many risk factors too. According to the Association of Chartered Certified Accountants of Dubai, approx. 82% of the new enterprises break due to poor cash flow and funds management. While setting up your business in UAE, you can avail loans from several financial institutions and banks, but ensure that your primary capital obligations and business setup are efficiently managed and implemented.

  1. Cultural & Communication Difficulties

Lastly, the biggest problem is concerning the culture and communication that is needed to be addressed respecting Islamic values. Business communication is required to be separate for men and women and the formal directness and approach are also limited.

How Can Business Setup Consultant Help?

You First – The Business Setup Company is a foremost consultancy firm in UAE with prominence for assisting various clients in setting up their businesses across the region. If you are also scared by any of the above challenges and desire to start up your business in UAE, then talk to our experts who are just a call away for service.

Consult now to our business setup consultant expert at

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What’s the need of a business partner for entrepreneurs to setup a new company in Dubai?

Typically, foreign investors are often unsure about the type of business they can set up in UAE. Most of them described the reason as the complicated business set up process and need of a local sponsor. So the question that truly needs our consideration is that do you really need a local sponsor/partner for setting up a company in UAE. 

The simple answer to this question depends on two major factors. Firstly, it depends upon the type of business that you are planning to establish and further, whether your business will be based in any of the free zones or not. Understanding these two factors can assist you determine the answer related to your business need.

 Some corporations and business communities compel for a local sponsor however, there are several other options available that do not have any such restriction. To guide you comprehensively, we are putting down some important information below.

  • For setting up a business in UAE, there are only three ways possible for the foreign entrepreneurs i.e. Setting up in Free Zones, Acquiring Professional Service License, and Forming an LLC.
  • If you wish to set up a Licensed Service Company with 100% independent foreign ownership and capital repatriation, then you will need a regional service agent or partner. As implied by the name the licenses will be assigned to the professional service business and the service provider will impose a certain service fee from investors though they have no authority and liability to intervene in business management, operations, and profit.
  • Another way to maintain 100% ownership and profit repatriation, is to set up your business in one of the free zones of UAE. But, you cannot deal with the local UAE market without a local service agent or distributor. There are few free zones such as Ajman Free Zone which does not need a local partnership still some of the collaborative institutions such as banks etc. may ask for a local partner.
  • If not settled in UAE fee zone and the nature of your business befalls under the technical or commercial license category, then you must register as a Limited Liability Company (LLC); and for setting up LLC you must satisfy the requirement of having a local sponsor who sustains the majority of shares.
  • Mostly, the local partners are expected to pay the annual fee, and sometimes they may also oblige a pre-determined percentage of profit or sales.

You First – The Business Setup Company is a renowned consultancy in UAE which has a reputed profile of serving various clients in setting up their business strongly in UAE. We can help you with the process of business set up and license acquisition. Our team is just a call away:


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Why UAE is considered as the best country for business expansion?

The nation driven by the diversified administration has set a new action on the world business market. UAE recently sprang to the 11th position in World Bank’s Annual Ranking with regards to ease of doing business. UAE dropped from the 10th place on the list from last year, making this important news for the international investors and ambitious entrepreneurs viewing UAE for business expansions.

Before you take out your laptop and commence making plans on setting up a company or expanding in the UAE, here’s a brief overview that you need to revise.

What does the title ‘EASE OF DOING BUSINESS” ranking actually mean?

‘Ease of Doing Business’ ranking is a year-long report presented by the World Bank. The World Bank ranks multiple nations based on easy business setup systems. However, the report also acknowledges countries that launch a passage of opportunities and infrastructure to ensure the commercial growth of the businesses in the province.

Since UAE is the 11th rank holder in this domain, it meets not just simple business setup requirements, but also offers great rewards and infrastructure to companies ready to invest in this prospering nation.

Now you might be wondering about the factors that made UAE the most sought-after country for foreign investment and why should you opt for company registration in the UAE. Listed down are the reasons that describe the same:

1.      Liberal & New Business Licensing For Foreign Investors

The influx of different types of licenses and liberal compliance regulations for international investors in Dubai Mainland is one of the credible reasons for ease-of-doing-business in UAE. The introduction of prompt licenses, reduced licensing fees, and commercial permits have drawn a lot of foreign investors in UAE in the past few years.

2.      Smooth Real Estate Market

A key action taken by the UAE is the initiation of the ‘Real Estate Investment Opportunity Initiative.’ Not only has this move led to the liberalization of the real estate market in the nation but it has also improved investment opportunities. The highlight of this action is that it enables partial real-estate ownership and abridged procedure for rental collection.

3.      Energy, Online Services & Infrastructure

In the UAE commercial industries or businesses get power connections at the least cost. Moreover, online services have made company registration in UAE a super easy, wise decision. Be its high-speed internet, registration of assets, access to government portals, online lending, online taxation – UAE has got everything.

4.      Friendly taxes & Jurisdiction

A small amount of taxes are applied to companies in the UAE. UAE has an unfolded judiciary system to meet the latest standards. In fact, a distinct tribunal and legal system have been formulated that deals with disputes about foreign investors alone.


Are you planning for company registration in the UAE? Make it easier with us:

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How to setup Joint Venture Company in UAE?

The joint venture is one of the widespread forms of doing business in Dubai as it empowers foreign entrepreneurs or organizations to associate with a local company under a contractual agreement. Joint ventures offer foreign businesses the same benefits as limited liability companies in Dubai.

To start a joint venture in Dubai one requires a local partner who will hold 51% of the partnership in the company. The only distinction between joint ventures and limited liability companies is the prescription of profits and losses. One of the biggest advantages of setting up a joint venture in Dubai is that no license is needed, as the local partner will have the business license to run the operations.

Ways to set up a joint venture in Dubai

Once the provisions of the joint venture have been accepted, the parties must record the agreement with the Department of Economic Development in Dubai (DED). The agreement must have a certain form issued by the DED and must be singed before a public notary. Once the joint venture agreement has been outlined, primary approval from the DED is needed. To obtain the consent, the following documents must be provided:

–         the registration application,

–         trade name reservation,

–         a No-Objection Letter issued by the local partner,

–         copy after the director’s passport,

–         copy after the applicants’ passports,

–         consent for the type of venture to be offered.

All set to work under Joint Ventur

Once the primary approval is secured with the DED, the joint venture is expected to follow various steps more to begin the operations. The following documents must be presented with the Dubai Trade Register:

–         the initial approval,

–         the documents registered for the initial approval,

–         a copy of the office lease agreement,

–         a copy of the association agreement notarized by a public notary.

–         a copy of the office lease agreement,

Unregistered joint ventures are also permitted to operate in Dubai, but for short periods only.

If you need any assistance setting up a joint venture company in Dubai, then contact us today:

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Factors and Advantages of a local sponsor while setting up a business in Dubai

One of the most difficult things entrepreneurs encounter while setting up a business in Dubai Mainland is the major concern of foreign ownership. This is because for any industrial or commercial Mainland business must have a local sponsor.

Thus, foreign entrepreneurs who want to start their business must have understanding and certainty about why they need a local sponsor for business in Dubai and what will be the consequences. This is because they can be 100% foreign-owned and are developed with the help of local service agents. But if you’re involved in industrial, commercial, or trading activities in Dubai Mainland, you will surely require finding a local sponsor for business in Dubai.


Local sponsors normally don’t help companies with their operations or any other work. They simply offer their service as a local representative and facilitate a foreign entrepreneur to build their business in the Mainland. And for these services, they are paid a fixed annual fee or a specific profit share.

In the UAE, you can find many high profile people or even celebrity sponsors who pretend to be distinctive from others by offering network opportunities or opening doors for particular industries because of their status. Even though this can be reliable, you need to be aware so that you don’t end up spending an extra amount for something that you could easily get through different channels for a small amount.

Things may go wrong in some situations. For example, in case of death of a sponsor, their share will be moved on to their heir; and if the heir is not impressed in being your local sponsor then you will be in significant trouble and will not be able to proceed to trade. So, you can dodge such a situation by going for corporate sponsorship.


In addition to getting access to the local market, you get to relish other major benefits as well when you get a local sponsor for business in Dubai.

Limited Liability Companies that are made with a local sponsor are entirely free from tax, and a foreign citizen can repatriate 100% of their profits. Also, you can open various branches of your company all across the UAE and can get a grip on several government projects that you cannot achieve if you are a free zone company.

Finally, collaborating with a local sponsor for business in Dubai gives you the status of an investor in UAE, which allows you to receive residence visas for you and your family. 


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