The DMCC Free Zone is home to over 14,000 businesses, ranging from multinational corporations to start-ups and is looking to attract more companies to its forward thinking Emirate and the interview gives a good insight into the complexitites, or ease of setting up a business in Dubai.
So Guatam, what happens when a small business decides to open up in Dubai? Can you take us through the steps?
Of course Kitty, I mean, what happens when a small business decides to open up in Dubai, that's a question. Now, essentially, all businesses set up in the DMCC are fully digitised, so as a small business, you could set up from anywhere in the world. You don't need to come to Dubai to set up your business, all of our processes are digitised and we use electronic signatures as well, so that, basically, anyone from any part of the world can set up seamlessly and that's one of the advantages of setting up in the DMCC free zone.
How long will it take to set up in Dubai?
Well it depends on how clear business strategy and the business requirements are and how quick the business is to give us the required papers, but it could be as short as a week, or on average it could take between two or three weeks to set up a business in Dubai. Now, if I could state a statistic here, approximately 70% of our businesses are SMEs, so really it's a very attractive eco system, even for small businesses. They typically are reticent about expanding abroad, because they think that business set up will be expensive and a long and torturous process. However, the sort of eco system that we've created, the sort of digital experience that we've created, the sort of customer experience that we've created, allows these small and medium enterprises to set up and successfully grow into the DNCC free zone.
You mentioned earlier that there were lots of electronic systems in place, does that mean you don't have to make regular visits in person? Could you conduct the preliminary meetings remotely for example, or are there still certain situations where you would have to be in Dubai, during the set up process?
My advice to business as always is, you need to know the market that you're getting into, so, come and explore the market, come and talk to us, we can actually give you all the advice that you need to set up a business.
We can put you in touch with others in your industry, you get a feel for the market but then having said all of that, like I said, you can set up literally from here in London or from anywhere in the UK, without ever having to go to Dubai and you can be licenced from wherever you are in the world. We work with a network of business partners in most key parts of the world and either they, these business partners of the DMCC, or our own customer service officers, can hand hold a customer through the entire process and make it easy and seamless for them.
So what would be a business owner's first step, do they contact an agency?
They don't need to, they can look at our website and send an enquiry and our customer services officers or membership support officers can help them. We have call centres that can answer calls six days a week and dedicated customer service officers who will actually get in touch with the client proactively and answer any questions that they have and support them through the process.
So what kind of a company do they need to set up, does it need to have local shareholding or just agency hand holding while the business is being set up?
Now one of the advantages of setting up in a free zone is that you can own your business 100%, you do not need a local shareholding to do so. You can buy property should you want to because there is freehold property available, commercial as well as residential, or you can lease that property, so really there are several advantages to setting up business in a free zone. These are 100% ownership, property rights, the ability to hire talent from anywhere in the world and DMCC helps with the whole process of getting visas and so on.
We also provide several services to assist with insurance, credit cards and help with opening bank accounts and business applications. We can even provide interns, as we believe that the company needs to focus on doing its business and we remove the pain and provide them with all the products and services they need, so that they can get people in seats quickly and start their business in the shortest possible time.
Are there grants available?
I wouldn't say that there are grants available, however, there are opportunities for SMEs to access finance at sensible rates and that is an initiative we are working on at the moment, to set up an SME fund where we can may be able to provide financing. There are other options available as well, as companies may be in other parts of the world, where there is private equity and various other means of finance, not just the conventional banking, available to these companies.
And following the introduction of 5% VAT in January, how does that affect the business tax situation?
Companies that set up in the free zone have zero percent corporate and personal taxation for 50 years guaranteed. VAT has come to the UAE from the 1st of January this year and businesses adapt and adopt to this new requirement.
What would be a ball park expectation for offices and staffing costs? How do they compare to UK costings?
Now let me give you some figures. It would cost you in year 1, about £9,000 to set up, to rent space and to employ say a couple of people, so it's not substantial but there on, from year 2 onwards, it would probably be about half that. It depends on the size of the establishment, the number of employees and so on, but pure registration and licencing costs about $10,000 in the first year.
What are the main differences between western businesses and those in the UAE, in terms of local customs and etiquette, how much do they play a part in business?
Right, 80% of the UAE's population is ex patriot, so you have almost 170 countries represented in the DMCC free zone and English is the international language, the business language, so fundamentally there isn't much of a difference between a business in the UK and a business in Dubai. Let's remember that there are over 120,000 Brits in Dubai and over 4,000 UK companies there, so there's a very vibrant eco system of businesses that a new company entering Dubai and the DMCC free zone can tap into.
Is there any chance you could give a sound bite just in terms of local customs and etiquette, if there's anything people need to be aware of during the business negotiation process?
Be patient is one thing that I would say, culturally it's important to be patient, don't dive straight into business, have pleasantries, have conversations, build relationships.
Number 2, respect local customs in terms of dress, especially during certain religious periods such as Ramadan for instance, but there are local customs and etiquettes wherever you go and whatever part of the world you go to, you would have to adapt. Always remember you are a guest, you have to respect local customs and local etiquettes and if you keep that in mind, you can be successful anywhere in the world.
Finally to summarise, why should entrepreneurs and business leaders consider opening in Dubai?
Access to two thirds of the world's population and half of the world's GDP within an 8 hour radius, that's the number one reason. Number 2, coming to a place that gives you access to Africa, the Middle East, central Asia, South Asia, all in one place. Dubai is a regional and international hub, it gives you connectivity to most parts of the world, two thirds of the world's population within one flight, that's what Dubai does. Thirdly, its free trade policies mean that apart from 5% customs duty and 5% VAT, you don't have corporate taxation, you don't have personal taxation, you have a great world class lifestyle, you have safety, you have security, you have connectivity to the rest of the world. Dubai geographically is located in an extremely advantageous part of the world, where you can access Japan in the east, through to the US and the West, all of the times zones basically, so there are many advantages to living and working in Dubai, including high quality education for instance, very good quality housing, you see the sun every day, plenty of advantages.
For more information visit www.dmcc.ae [1]