It is no secret that the UAE attracts entrepreneurs in their droves and that is certainly set to continue. This can only be good news since the goal of the country’s National Entrepreneurship Agenda is for the UAE to become an entrepreneurial nation by 2031 and it seems as though it may have already succeeded.
In fact, for two years running, the UAE has made the number one spot in the Global Entrepreneurship Monitor National Entrepreneurship Context Index (NECI) according to their 2022/23 report. The ranking is done on values such as ease of access to entrepreneurial finance, government policy and other critical benchmarks.
Perhaps this is another reason that, by 2030, it is estimated that there will be 1 million SMEs in the UAE. Clearly, the entrepreneurial landscape is booming with growing numbers of investors launching businesses in the UAE.
Lured by investor-friendly initiatives, first-class infrastructure and political stability, starting a business in the country is seen as a great opportunity. However, no matter how confident an entrepreneur is that they have the next big business idea, it always pays to heed advice. This is where business set-up consultants come in and help facilitate the growth of the entrepreneurial landscape throughout the emirates.
“Launching a business in the UAE demands meticulous planning. Entrepreneurs should prioritise understanding local regulations, cultural nuances, and market demands,” says Jovana Jancic, Chief Operating Officer at Decisive Zone.
“Choosing the right business structure, navigating licensing procedures, and ensuring compliance with legal requirements are critical. Additionally, establishing a robust financial plan, grasping the unique consumer landscape, and fostering local connections are key considerations. Adaptability to the region’s dynamic business environment and leveraging strategic partnerships can significantly enhance the prospects of a successful business launch in the UAE,” explains Jancic.
These are sentiments echoed by Neha Thomas, Head of Marketing at Creative Zone.
“Like any big business move, research is crucial. Businesses need to understand cultural nuances, legal requirements, and consumer behaviours within the target country, and use that to tailor their services accordingly,” she says.
“It is important to establish a local network of companies too, as they can offer support and guidance based on their own experiences. It can be challenging for market newcomers, so Creative Zone leverages its services and network to help businesses navigate challenges and adapt to market dynamics. We ensure that international expansion is both successful and sustainable,” adds Thomas.
For a successful business model, consultants assist by ensuring that fledgling companies are on the right track from the outset and don’t fall foul of any legalities.
“We have a team of company formation specialists who enable start-up companies to get their set-up right from the start. What many do not realise is that choosing the right jurisdiction and licence is extremely crucial for their long-term growth and success. With the correct set-up, they can carry out their business activities without complications and optimally scale and expand their operations,” says George Hojeige, CEO, Virtugroup.
“We also support start-ups by addressing their early-stage operational requirements through our broad range of corporate services, which include bank account opening, accounting, mail management, legal, compliance, and more. Additionally, with the introduction of corporate tax (CT) in the UAE, we have pledged to assist 10,000 companies in becoming tax-compliant by providing them with free tax registration, free accounting services for three months, and a region-first compliance guarantee. To fulfil this large-scale initiative, we have allocated an investment of over Dh50 million,” Hojeige adds.
Seek guidance on corporate tax
The addition of tax has certainly changed the business landscape and means that the self-employed have to pay more attention than ever to those accounting books. However, business consultants can help businesses continue to succeed by playing a pivotal role in safeguarding expensive mistakes.
“The introduction of corporate taxation since June 2023 has fundamentally altered the business landscape, bringing with it various challenges for companies aiming to establish a tax-efficient corporate structure,” says Prakhar Varshney, Partner, Rank Accounting and Consultancy.
“A notable issue arises for businesses operating in both mainland and free zones, as mainland companies face a 9 per cent corporate tax, while free zone entities can enjoy zero per cent CT by meeting specific Free Trade Agreement (FTA) conditions. This necessitates careful structural planning and continuous monitoring. Companies must also contend with the ever-evolving CT regulations, as the FTA regularly issues notifications and amendments. To tackle these issues effectively, a thorough review of financial records and expert advice from tax consultants are essential.
"Furthermore, proper management of opening balances and financial years is crucial for tax efficiency and compliance in this new corporate tax era,” Varshney explains.
It has been almost two years since the news broke that corporate tax was being put into force, but this hasn’t deterred aspiring entrepreneurs.
Mariben Christine Eustaquio, Founder and Managing Director, Ezone, says, “In January 2022, the UAE Ministry of Finance unveiled its plan to implement a federal corporate tax on the net profits generated by businesses. While this significant tax reform will have repercussions for a wide range of businesses operating in various sectors, it is not expected to diminish the UAE’s status as a highly competitive business destination. Additionally, this measure is anticipated to contribute to the augmentation of non-oil revenue, thereby enhancing the stability of public finances.”
Since the job of a business consultant is to stay on top of the latest regulatory updates, they can also ensure that business owners succeed in navigating any unfamiliar changes in regulations.
“Ezone conducts a thorough review of the regulatory updates and establishes open and personal lines of communication with our clients. Our team is well-equipped and prepared to handle all enquiries and complexities, and we often collaborate with specialised consultants when needed,” Eustaquio says.
By ensuring that legalities are up-to-date, business owners can focus on their organisation and the day-to-day running of their trade. However, once they are up and running and on the path to success, business consultants are also providing help and advice long after a corporation has been established. To enable companies to grow further, they can even help future-proof a business and assist in ideas to adapt and avoid any potential difficulties down the line.
“Future-proofing is easier after fostering a company culture of adaptability, diversification, and innovation. Companies should build the values of embracing change. They shouldn’t be afraid to diversify offerings, markets, and revenue streams. And, of course, invest in technologies like automation, analytics, or AI. These allow a company to sustain or even grow operations amidst change,” suggests Thomas from Creative Zone.
Certainly, this gives business owners something to think about, especially since we witness a shift in business trends globally as we herald the fourth industrial revolution. Already the AI and technology sectors are flourishing and entrepreneurs are seeking out business consultants who can provide specialist advice in these fields. Therefore, it seems even business consultants themselves are having to adapt in order to provide the necessary support.
As the UAE looks as though it is on track for an ambitious 1 million SMEs by 2030, it is assured that business consultants will continue to assist in accelerating this growth. However, in the meantime, it is plain to see that demand for business consultants is at an all-time high and is surely set to stay that way.