Establishing a business takes tenacity. After all, not only do you need to build up client relations, grow at a sensible pace and ensure financial stability, but you also need to ensure that compliance is maintained in what can be a rapidly evolving regulatory environment.
Since no business owner wants penalties or fines, good business acumen should involve planning for corporate tax and other mandatory regulations from the outset, even if it seems complex.
Get things correct from the start
“Start-ups in the UAE often struggle to understand and comply with corporate tax rules. Challenges include navigating tax filings, managing VAT, and accurately handling corporate tax implications. Without proper knowledge, start-ups risk compliance errors that may result in costly penalties,” says Nitin Kapoor, Managing Partner, Tax & Legal, Rank Accounting & Consultancy.
To ensure that start-ups evade any unnecessary legal implications, Kapoor has some recommendations.
“Start-ups should adopt strong financial practices early, including accurate bookkeeping, timely tax filing and audits. Partnering with experienced consultants like Rank can help them navigate UAE tax regulations. This proactive approach ensures compliance and long-term financial stability, preventing costly errors.”
Have the right priorities and success will follow
For free zone start-ups, choosing the right jurisdiction is often one of the early requirements when launching a business and legislation will vary.
Jigar Sagar, Founder of créo, says, “UAE free zones are quintessential vehicles for early-stage start-ups, offering benefits such as full ownership, easy set-up and tax incentives, letting founders focus on business growth. With seamless access to international markets and a supportive infrastructure, free zones provide an environment for building businesses from the ground up.”
With the free zone selected, start-ups must then prioritise familiarising themselves with the various regulatory requirements.
Joshua Bettoney, Growth & Strategy Director, Jitendra Consulting Group, says, “In the past, investors primarily focused on cost, labour laws, and the strategic location of whether to go to a free zone or mainland, when establishing a business in the UAE. However, the landscape has evolved significantly in recent years, requiring investors to meet additional compliance requirements. These include VAT registration, corporate tax compliance, Economic Substance Regulation (ESR) adherence, Anti-Money Laundering (AML) measures to avoid banking difficulties and ensuring timely salary payments to prevent Wage Protection System (WPS) account blocks. For trading and manufacturing companies, selecting the right bank for facilities such as letters of credit, trust receipts, and overdrafts, is crucial.”
With the regulatory side covered, Bettoney says that taking the following considerations into account are vital for a successful enterprise.
“To succeed, investors must evaluate incorporation costs, suitable jurisdictions, visa requirements, office space options, and bank account opening processes. Recognising the crucial role SMEs play in the UAE’s economy, the government is taking proactive steps to further strengthen this vital sector. Increasingly, new initiatives are being introduced to support and nurture innovative start-ups at both the pre-launch and post-launch stages.”
Build successful partnerships
Running a business is a journey full of ups and downs. When it comes to start-ups, finance and banking play a critical role in its future success. Unfortunately, this can be the tricky part.
“Small and Medium Enterprises (SMEs) are the backbone of the UAE economy, but they often face challenges in accessing bank loans and facilities. However, the introduction of compliance requirements, such as VAT and corporate tax (CT), has prompted SMEs to organise and maintain proper accounts, undergo audits and build credibility with banks to secure financial support,” says Bettoney.
“Investors must ensure that business contracts and agreements are airtight and original documents, including invoices, are well-maintained to strengthen their position in case of legal disputes. Foreign investors must adapt to the UAE’s dynamic legal environment, allowing for contingencies in their financial planning to mitigate the risks of sudden regulatory changes and avoid hefty penalties. Local investors, on the other hand, need to align with global trends, such as embracing Artificial Intelligence (AI), which is transforming industries across the UAE. By investing in advanced technologies, they can remain competitive and contribute to the nation’s AI-driven future,” he says.
Investors should also remember that putting time into networking and having good working relationships with other businesses is necessary for any credible business and is often required to help maintain financial stability.
Sagar from créo, suggests, “I believe that securing funding and scaling here is all about credibility and a clear growth story. Investors need to see commitment and market understanding. I always advise founders to start with a solid business model and a lean approach. Relationships matter here — network with the right people, seek strategic partnerships, and demonstrate traction early on. Remember, funding follows clarity and execution, so focus on those first. The UAE’s market is receptive to innovative ideas backed by a strong strategy.”
A helping hand
Whilst it might seem like there is a lot to remember, it is important to know that, as a business owner, you are not alone. With plenty of business specialists who are well-versed in the latest regulations, investors should never be afraid to ask for help.
Syam P Prabhu, Founder & Managing Director, Aurion, says, “The UAE is ranked 16th in the Ease of Doing Business Index as per the World Bank report. The incorporation process in the UAE is transparent and hassle-free. However, a few hurdles may be taken care of by the entrepreneurs during the incorporation of their company. By seeking assistance from expert business consultants, such as Aurion, you can seamlessly set up a company in the UAE without any hassle.”
Since a business consultant can take you through the full start-up process from the inception to future growth of your company, it really does pay to get advice.
Shakti Sangwan, Group Marketing Manager, Creative Zone, says, “At Creative Zone, from the moment of business set-up, we offer an array of extended services designed to support every phase of a company’s growth. This includes streamlined banking solutions, assistance with obtaining Golden Visa and expert guidance on tax and accounting matters. We also offer additional support in areas such as compliance, HR, and strategic planning to ensure that businesses have everything they need to thrive.”
However, by using a business consultant, not only can a start-up thrive but you could future-proof it too.
Rohan Malhotra, CEO and Founder, Momentum Consultancy, concludes, “Start-ups often face issues like unclear licensing, inadequate contracts and non-compliance with UAE regulations. To avoid these pitfalls, ensure proper legal documentation, work with an expert to select the right jurisdiction, and stay updated on regulatory changes. Engage a trusted consultant to navigate these complexities and safeguard your business’s future.”
As the old adage goes, it’s always better to be safe than sorry and, by seeking advice, investors can minimise any detrimental legal implications.
Technology at your finger tips
ne of the ways in which entrepreneurs can organise their business is through innovative technology, such as all-in-one platform, Peko. With real-time analytics and reports, compliance checks, one-click payments and more, the platform’s features are designed to boost efficiency and help businesses manage their finances.
Mehreen Shora, Vice President, Partnerships, Peko, explains the reasoning behind the platform.
“The idea for Peko came from extensive research and feedback from small and medium-sized businesses (SMBs) struggling with managing multiple fragmented tools for payments, HR and operations. As vital drivers of the global economy, SMBs often face inefficiency, high costs and poor financial visibility. Through this insight, we identified the need for a unified solution to streamline these tasks. Peko consolidates essential services into one platform, addressing challenges like manual processes and lack of integration. By simplifying operations, Peko helps SMBs save time, cut costs and gain control over their finances, allowing them to focus on growth.”
Since time and costs affect the bottom line of any business, this can only be a much-needed tool for business owners.
