Connect with us


Common Challenges Entrepreneurs Face In UAE

Common Challenges Entrepreneurs Face in UAE

New business setup is not an easy process. Dubai is a business hub, and where each service is available for businesses to use and improve their abilities, business owners must face different problems. It shows the fact that it is not always fun and profitable when operating a business. Sweat and hard work are needed to build a successful business setting in Dubai.

To reduce the burden of so many business tasks that exist, business owners try to get help from business consultations such as Dubai’s business settings. Hiring them provides expert advice for your business setups. They also help you with visa services, trademark registration, bank account opening, etc. The business owners can follow their most important tasks and leave the rest on setup consultants. 

Entrepreneurs choose UAE to start their business abroad because they have researched and been amazed by the acceleration of the region’s development. UAE is always in the spotlight in print and electronic media for its innovative product, reforming foreign investment policies, new startups, and company frameworks.

Apart from all the rumors ignored about slow economic growth in the region that appears after several years, the UAE continues to exceed current expectations and estimate investors and entrepreneurs with the development, evolution, and growth of the next level.

What Are The Common Challenges Of Doing Business In The Uae?

Dubai’s business setup has many advantages and opportunities, but good things never come easy. They bring a lot of challenges and hurdles in the path of a new journey.

Some of the significant challenges faced by entrepreneurs starting a business in Dubai are as follows-

1. Company Ownership –

If you plan to start a business in Dubai, you require a local sponsor for the same. If you want company formation or business setup in Dubai mainland or offshore, you need a parent who has 51% of company ownership. 

The main challenge is to find a reliable and trustworthy partner in a foreign country. Other than this, the foreign partner should know and understand the UAE market, laws, culture, and other local business operations. 

Although Freezone companies don’t need a local partner and give 100 percent ownership with zero taxation policies and many other benefits, they have limited visa approval and tiny offices. (You Should Check – How Entrepreneurs Benefit From Employee Outplacement)

2. Understanding UAE Business Culture and Particulars

UAE has business regulations like trade licensing, visa regulations, marketing specifics, etc. A person starting a company in Dubai should be well versed with its rules, regulations, legal policies, etc. 

A person should understand the culture and traditions before starting the business, like norms related to the employee. 

You need to understand the traditions, culture, and religion properly. 

The particulars include knowledge about local holidays, employees, cultural norms, etc. 

3. VAT Implications

All the transactions help inside UAE, and other gulf countries are subjected to VAT. The tax is applicable at the rate of 5 percent. All the business services, goods, logistics, etc., have the impact of VAT. 

If you plan to set up a company in Dubai, then check the VAT filing details. It is one of the biggest challenges for setting up a business in Dubai. If you fail to comply with the UAE’s tax system, you will have to pay huge fines. 

4. Fund and Expense Management

Often, entrepreneurs do not realize that preparing a business, whether in the free zone of Dubai or land, can take a lot of money, not because of taxes and registration but because of the business’s rent and equipment. For this reason, cash flow strategies must be developed so that expenditure can be arranged for business progress. 

Also Check – 5 Top and Significant Tips for Moving to Dubai

Language Issues

The official UAE language is Arabic, despite the usage of English for business communication. However, while hiring local employees, foreign companies must ensure that employment contracts, records, training manuals, and other documents are in Arabic. The company may need to find local translators or legal experts who can help them with Arabic and English languages.


For new business startups, arranging funds can be challenging. There is a very limited venture capitalist to support new businesses in the UAE. Getting funds from UAE banks is a very time-consuming process and requires a lot of paperwork. 

Difficult To Getting Work Permit And Visa

Foreign employees need to get a work permit or place to live and work in this country. Foreign entities bring employees abroad to the UAE, especially need to follow visa norms. The company also needs to comply with the Directorate General of Residency and Foreigners and Ministry of Human Resources & Emiratization regulations.


When you start a new company in Dubai, UAE, you will need some local employees to work for your company. UAE has a stringent set of guidelines and methodologies for this. Hiring local employees can be a big challenge for one who is not aware of these regulations and practices. 

Employee Management

Another challenge in doing business in the UAE is managing local workers efficiently by local law and compliance. Employee management can be difficult because of differences in culture, language, and administrative approaches. 

Management of payroll and taxation of employees according to the UAE law may also look complicated. Also, foreign companies need to follow the Wage Protection System (WPS), along with payment of services and other benefits.

Dubai’s market is highly competitive and challenging. But if you correctly understand the proDubai’s market is highly competitive and challenging. But if you correctly understand the process, cultures, and rules of doing business, you can run a smooth and hassle-free trade.  If you still face any problems, it is good to hire a business setup consultant in Dubai. They will help you through the complete process of this business setup company in Dubai. They will also help you with other tasks like bank account opening, pro services, trade license, etc.

Also, Read – Top 5 Most Famous American Entrepreneurs

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent Comments

Recent Posts