Gaining a foothold in the economic powerhouse of Dubai is an ambition held by many Jordanian SMEs. But to succeed in doing so, preparation is key.
By Rebecca Irvine
The benefits of setting up a business in Dubai are easy to see. The strong and growing economy positions the city as the international hub of the Middle East. With ‘power industries’ in a huge variety of areas from shipping to media, retail and banking, Dubai is also one of the world’s major travel and tourism hubs.
Beyond this, Dubai can be considered a tax-free city, with companies and individuals living in the city not subject to income tax, and a number of free zones—areas that offer tax free and free customs duty benefits to expat investors.
It’s these benefits that attract thousands of Jordanians to establish their businesses in the emirate. Two of these Jordanians are Khalil Shadid, founder of Reserve Out, the online restaurant reservation platform, and Moe Ghashim, founder of Shop Go, a platform that helps users to start their own online store in the MENA region. These are their tips and advice on what to consider when making the move to the Gulf.
Preparation, preparation, preparation
The process can be lengthy, and it’s important to make sure you are properly prepared before you embark on it. Shadid said it can be difficult to rectify any mistakes that you make further down the line because so many different bodies and departments take the details of the company. First you need to be pre-approved, established with a bank, and get final approval—all before applying for visas. “Get prepared with getting all the company documents together”, said Ghashim. This includes everything from company registration papers, social security registration, and any relevant licenses. You don’t necessarily need legal advice, providing you do all the preparation properly, and in fact Reserve Out completed the process independently.
Do your research
There’s more than one way to go about setting up a business in Dubai, and it’s important to choose the option that suits your business model best. Broadly speaking, you can choose between working with a local partner who will hold a stake in the business, or setting up inside one of Dubai’s free zones. “We chose to set up in a Free Zone—we didn’t want to lose 50 percent of the company to a local partner,” explained Ghashim. Shadid made the same choice, setting up without a partner in the Dubai Media City Free Zone, to continue the position as an independent company.
Reserve Out and Shop Go were also both expanding Jordanian companies into the new markets so had capital to play with. For what it’s worth, you will need $15,000 of working capital to deposit in the bank in Dubai once registered.
A waiting game
Something that can vary quite a lot is the time the process will take. For Reserve Out and Shadid, the process took around four to six weeks. While for Ghashim at Shop Go the expansion to Dubai was a “deadly slow” process. While there were no major problems along the way, it took around four months before it was fully complete. So it seems in this case, patience can be a virtue. “It can be a pain,” Ghashim explained, “but we had to do it to get access to the Dubai market.”
Help is out there
An option for companies who are looking for a way to get started is to utilize the assistance of an incubator. There are many out there, with several developing in recent years. “In 2013 when we began looking into options, at that time there wasn’t the help of the incubators today,” said Shadid, adding that their help could be especially useful for companies in their earlier stages. Shop Go had the assistance of In5 Innovation Center who worked with him on the registration process, the legal side of things, and on which free zone may be most suitable for them. Others out there include Flat 6 Labs and Afkar.me.
Plan for the future
Last but not least, it’s important to consider the future of the company. While making the move over to the Gulf can seem like a bit step in itself, where the company may be in three to five years should also influence the decisions you make. “There may be options that suit your growth better,” explained Shadid, as some of the Free Zones may suit where your company is going more than others, in terms of their location, and what you need to use the office space for. There are many options out there, so take your time and think long-term.