Dubai: If you are an up and coming small business in Dubai and are starting on a tight budget, finding options for an affordable office space might be one of your top priorities. However, there is an alternative to traditional offices, too, that can help you cut down on operational costs.
Dubai has the Estidama service, which is a virtual office lease that allows small businesses to operate their company without renting a physical space. So, if you are an entrepreneur and want all the benefits of an office lease without the overhead costs associated with it, here is all you need to know about virtual offices.
What is a virtual office?
A virtual office gives businesses all the amenities and administrative services of a physical office without paying rent or the expenses for office-related services. Essentially, employees can work from anywhere, but they will have a physical address, PO Box, and a reception and conference room, too, as this service is provided by business centres in Dubai.
“A business centre signs a tenancy contract with the client for a virtual office space. The contract states the start and end date. When a company signs a contract for a virtual office, the business centre not only provides the space but also gives the company a physical address and manages services such as reception, email forwarding and courier,” Muhammad Azimov, sales executive at Espada Business Centre, said.
“The types of clients that usually use virtual offices are start-ups because they do not have to bear the cost for secretarial services, IT support and amenities such as full speed internet, security and maintenance,” he added.
When a company signs a contract for a virtual office, the business centre not only provides the space but also gives the company a physical address and manages services such as reception, email forwarding and courier.
Why should I choose a virtual office?
Rachel Hobin, senior manager at Servcorp, a multinational company that provides workspace solutions, said that besides the benefit of having office expenses being minimised, a virtual office is equally as impressive as a traditional office at a prime location. It also brings with it more flexibility.
“Professionals can work from home and still have the reputation that only a CBD [central business district or prime location] address can bring,” she said.
The reception services offered by virtual offices, too, can be extremely helpful for startups, according to Hobin.
“Many entrepreneurs and independent professionals make the mistake of relying on a mobile number for their contacts to call. Even today, most callers will not leave a message on a voicemail and won't call back if the number is busy. A virtual office can include a landline number, answered by a professional receptionist who will act as the face of your business, who can take a message or forward the call as required,” Hobin said.
Professionals can work from home and still have the reputation that only a CBD [central business district or prime location] address can bring.
What is Estidama?
If you want to apply for a virtual office for your company, you need an Estidama lease.
“An Estidama, or a Sustainability Contract, is a virtual lease option that allows smaller companies with fewer staff to obtain a trade licence without the need to rent a physical office space,” Nazar Musa, CEO at UAE-based company service provider PRO Partner Group explained.
An Estidama, or a Sustainability Contract, is a virtual lease option that allows smaller companies with fewer staff to obtain a trade licence without the need to rent a physical office space.
How to set up a virtual office for your company in Dubai
“Obtaining an Estidama lease can be done through a licenced business centre or through other co-working spaces that are authorised by Dubai Municipality and conform to Dubai Economy and Tourism’s (DET) standards,” Musa said.
The pros and cons of a virtual office
While a virtual office may seem like an attractive and cost-effective option, is it the right one for your business? According to the experts who spoke with Gulf News, while a virtual office would reduce overhead costs, Estidama contracts have a limit on the number of visas that can be issued, so it is might not be optimal for a business that is looking to expand.
“A virtual office space allows smaller companies to operate without the need to rent a physical space. Hence, firms can benefit from reduced overhead costs. The money saved on rent with an Estidama can be reinvested into the company’s operations. This is highly beneficial for an entrepreneur or newly established companies to be able to operate without having exceedingly high costs,” Musa said.
“However, an Estidama does have a limit on the number of visas that a company can obtain, with the maximum being four, unlike an Ejari contract, where the quota is unlimited. Thus, this is not particularly suitable for companies that have more than four employees. In this case, if the company is larger or is aiming for an expansion, then an Ejari may be more appropriate,” he added.
According to PRO Partner Group, if you do want to shift to a physical office, you cannot switch from an Estidama to a physical space in the first year of your contract.
How much does a virtual office cost?
According to the experts who spoke with Gulf News, the cost of a virtual office can vary depending on the services that you sign up for. However, you can get a basic contract for around Dh500 a month, according to Azimov.
