Both local and international entrepreneurs choose to set up or expand their companies in the United Arab Emirates (UAE) for many good reasons. These include the country’s continuously thriving economy, its business-friendly legal framework, generous tax incentives, good global standing, manpower accessibility, and its world-class amenities, to name a few. In fact, the UAE ranked first in Middle East and fourth worldwide in the Global Entrepreneur Index in 2020.
If you’re an entrepreneur who’s looking to set up a company or expanding your international business in the UAE, this article will help you avoid the most common mistakes that entrepreneurs make when setting up in the country.
1. Focusing only on the paperwork involved in company setup
Securing licences and gathering documents is essential in legally and successfully setting up a company in the UAE, regardless if you’re a local or a foreigner. However, sometimes, entrepreneurs exaggerate the importance of paperwork to the point of not paying as much attention to other crucial factors in a newly formed business.
When the paperwork is done, some entrepreneurs don’t know what to do next. This is also why it’s best to hire a business setup consultant who can guide you through the entire journey so you don’t skip any important steps. These include knowing the right business jurisdiction for you, educating you on business setup laws in the UAE, knowing your risk factors, planning for worst-case scenarios, helping you open a bank account for your startup, and more.
2. Not doing enough research about market demand and competitors
One of the most common reasons why companies fail in their early stages is they don’t spend enough time researching about market demands and trends, e.g., how much of the services is the market willing to avail or purchase at a certain amount, their competitors and the like.
For example, you want to start a foreign exchange company in Dubai and your target customers are foreigners in the emirate, locals who work with companies overseas, and those who plan to go abroad for any reason. When conducting research, you have to know the percentage of Dubai’s population that belongs to your target market, the number of foreign exchange businesses per specific area in the city, and how much they offer for each currency.
This way, you’ll be able to gauge where to locate your business exactly, and how low or high you can charge for each currency to remain competitive and attractive to clients. At the same time, you have to clearly specify the demographics of your target market and spend enough time learning more about their purchasing behaviour.
3. Choosing unsuitable business partners
Many successful people say that a business partner is almost like a lifetime partner. And that couldn’t be more true. Things are good when they are good, but when something goes wrong with regards to money and operations, there’s a huge chance you’ll know who you’re truly dealing with.
This is why choosing your business partners carefully and making sure you know they are decent, professional and honest is critical before you finalise and sign any business agreement. Background checking is key.
4. Not giving enough attention to their banking partner
A banking partner provides valuable insight to companies in terms of huge financial decisions, growth plans and operational challenges. That’s why entrepreneurs should pay attention to their advice, especially in the early stages of a company. This can also help you save your business from unnecessary costs, keep you from missing out on good opportunities and avoid financial surprises along the way.
5. Forgetting about having a referral program for their business
Some businesses forget about the power of word of mouth and feedback through social media in growing a business. Referrals can help you get a good amount of leads when expanding and establishing your clientele, so investing in powerful referral programs is highly recommended.
For example, you can give a freebie or incentive to customers who will take the time to post their positive feedback about your business, or give rewards to clients who refer someone to avail your service. You can also offer them a more fulfilling reward if their referral ends up availing your service.
The rewards or incentives you can offer may vary in sizes and shapes, depending on what could seem attractive to your target market. Therefore, getting enough data and research is also necessary for your referral program’s success.
Work with the right business setup consultant in the UAE
Are you ready to set up a company or expand your business in the UAE? Speak with the right business setup consultant to ensure that you won’t miss any crucial steps early in your entrepreneurial journey. Reach out to an ExpressPRO representative to discuss the best jurisdiction and trade licence for your business, as well as the paperwork required and other relevant requirements.
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