The United Arab Emirates is a lucrative market for business tycoons from all over the world, thanks to its business-friendly environment, tax relaxations, and simple legal framework. Nevertheless, like all businesses, starting a new business in the UAE can come with its own set of hurdles.  You need to overcome these challenges to realize your full potential of becoming a successful entrepreneur in the UAE.

Let’s have a look at the seven common challenges faced by most entrepreneurs and these will help you \ start a business in the UAE with ease.

Fund Management

Arguably, funds come across as one of the major hurdles in most entrepreneurs and SMEs business journeys. From the business plan stage to getting a business licence to operate a business in Dubai and then move towards your business setup, you are going to need funds. 

A business survey by the Association of Chartered Certified Accountants revealed that 82% of the startups fail due to poor cash flow management. That’s why it is essential to implement sound strategies on cash flow management for your business. 

Also, proper finance management is among the key requirements when the time comes to scale your startup. Beginning from the initial capital, keeping track and control over all the business expenses can be an arduous task. An expert’s advice can go a long way in saving you time and money. You should consider hiring the services of a best business mentor with a background in financial management. 

Finding a local partner

If you belong to a foreign country, setting up a business requires that you have a local sponsor as your partner. The local sponsor would be a partner for a majority of your business’s total share as a mandatory requirement setting up a company in the UAE.

Finding a trustworthy partner sponsor is an important task as they will have a role to play in your business enterprise.

Getting hold of a local business mentor or business consultant can be a good starting point and can help you better understand how and what to look for in a potential local business partner. They may be able to help you with a list of potential business partners too.

Tax Implications

Since January 2018, the UAE has implemented the Gulf Cooperation Council VAT system. The new law introduced a 5% value-added tax (VAT) imposed on all goods and services except essential food items, education, and healthcare. You can check the list of items exempt from VAT on the mof site. Tax planning is critical to new business success and is an area where you will be off to a great start if you have a tax professional on your side. 

As in most developing countries tax and business laws can keep updating and this can get challenging. Getting used to the new regulations and exemptions can be confusing and stressful. Nevertheless, a trusted mentor can help you stay updated with the new rules and regulations.

Cultural Divides

This is quite a common issue when starting a business in a foreign country. UAE is a country that is known to adhere strictly to its cultural norms. Culture and tradition play a significant role in local business. 

Social norms relate to communication with employees, local holidays, do’s and don’ts, working hours, religious obligations, etc. Communication needs are specifically different for men and women. The Emirati culture is at the heart and soul of business in UAE and raises worries about the possible conflicts due intercultural differences.

Not just that, it’s a global manpower marketplace so you have people from different countries, ethnicities and religions. If you have some support by way of a HR Mentor or consultant you will be able to address people and management problems with ease. 

Need for innovation

UAE is a vast melting pot of business expats from across the world. Dubai is a global city known as the Middle East’s business hub where you can find all kinds of businesses, from small to big corporations. 

With many SME businesses each day, the UAE market calls for an innovation-approach. With 100% ownership options open businesses in the free zones have to prepare for a competitive future and that requires innovation and digital transformation. Understanding the current market trends, future predictions and the growing competitor landscape will help you innovate better.

Work permits and visa application

Any foreign entity that wants to start a business in the UAE needs to follow protocols with respect to issuing work permit, suitable visas etc. There are logistical issues here and can’t be addressed overnight given the formalities.  Mistakes and carelessness can result in complications that will cost time and money. Better be prepared on this front, 

Most entrepreneurs are new to such obligations and have trouble handling everything on their own. Getting a business growth consultant on board or joining a professional business mentoring platform can be very helpful. 

Hiring local talent

Well, you will need people as you grow. And you need HR policies too. In the UAE you will need to hire local staff among others. UAE has a significant proportion of migrant workers willing to work at flexible costs and combined that with local talent can present you with critical questions about hiring talent. 

Local Talent can present challenges when it comes to communication due to the language barrier, work culture, etc.  You need to familiarize yourself with the labor rules and guidelines introduced by the UAE’s labor laws. A local business mentor or HR consultant would be a good starting point for anyone wanting to start a new business in the UAE.

We wrote about the top advantages of having your business in the UAE, which would be an ideal read after this post.  And then once you are all set for your business journey all you need are tips for entrepreneurs to be more effective and goal-oriented.

Addressing business challenges right when you step into the market can be too demanding hence its important to have the right professionals on our side for advice to avoid critical mistakes. 

Are you seeking Business Coaching or Mentoring Services to start your business?

As a new player in a prospective market, figuring out everything on your own can be challenging. Working with a business mentor can be helpful in many ways. This is precisely where Jupiter Business Mentors can assist you. The platform connects mentors to the start-up community in UAE so that you can take advice from experienced professionals. 

Avail of the special offer – 90 minutes of free sessions with any six mentors on the platform.