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7 Common Challenges Entrepreneurs Face When Starting A Business In Dubai, UAE

Challenges entrepreneurs face in Dubai UAE when starting a business

Planning to start a business in Dubai? In this guest post, Amy shares the 7 common challenges entrepreneurs face when starting a business in Dubai, UAE.

I am sure everyone is fascinated when they hear some success stories about successful entrepreneurs and their new startups. Isn’t it?

But do you even have an idea about the challenges they faced or what they have done to be here?

It takes hard work and a lot of effort to be a successful entrepreneur, especially If you plan to start a company in the UAE.

Although setting up a business in Dubai is very easy as compared to other western countries. It just requires some practical understanding and knowledge about the business norms and culture of Dubai.

Some processes are easy, and some are complex to set up a business in Dubai.

Dubai is a business hub, but it also has some challenges that the new entrepreneurs face.

It takes the right approach and hard work to become a successful businessman in Dubai.

You May like: 6 Traits of Entrepreneurs Starting a Business in a Foreign Country

What Are The Challenges Faced By Entrepreneurs while Starting Business in Dubai, UAE Region?

common challenges Entrepreneurs face when starting a business in Dubai UAE

Starting and setting up a new business in Dubai is not an easy task.

Here, we have discussed some of the most common challenges that every newbie face while starting a business in Dubai.

Have a look at all of these carefully and try to overcome these issues by taking the right guidance.

Finding a Local UAE Partner

If you are a foreign entity opening a business in Dubai, you will have to share the business with a local Emirati.

Even If you plan to partner with an already existing local business, open a franchise or a representative office.

If you want to form an onshore company or LLC(limited liability company in UAE), you will require a local partner for the same.

It is also a norm that if you are a foreign entity, you can have just 49% ownership while the local partner holds 51%.

Finding a reliable local partner can be a very tough job. It is the main challenge and can be the biggest obstacle when starting a Dubai, UAE.

The local partner you choose should have relevant knowledge about the laws and norms of Dubai Business.

VAT Application

Prior to 2018, Dubai, UAE used to be tax free. As a result of minimal tax burden, many entrepreneurs from all over the world took advantage of the tax breaks to start their business in the region.

Unfortunately, that is no more the case since January 2018, when the country implemented the Gulf Cooperation Council VAT system.

Getting accustomed to the new VAT laws in Dubai is one of the very challenging aspects of starting a business in the country.

Those business enterprises who fail to comply with Dubai’s tax system have to pay huge penalties and fines.

Related: How to Apply for Your TIN in Nigeria

Cash Management

Starting and operating a business in Dubai, UAE requires a lot of funds. You will need fund for rent, business maintenance, setup cost, equipment (If needed), taxes, registration, etc.

Hence, having proper cash flow management and strategy is challenging to start a business in the UAE.

It is essential to keep track of your expenses to ensure you don’t run out of money. As a foreign entity trying to set up a business in Dubai, it is even more challenging without proper knowledge and understanding.

You may want to consider seeking help from business setup consultants. They will manage your expenses and help you complete some tasks at a lesser cost.

Understanding UAE culture

The main problem that a foreign entity face while starting a business in Dubai is to understand its culture and business traditions.

UAE has stringent and different norms. So it is essential to have a thorough and proper understanding of it.

Also, you should know the Islamic religion and values before entering the market. Some of the social norms are related to the employees, local holidays, cultural norms, working days and hours, etc.

Also, understand the business types you want to operate in the UAE region because of some business operations that the UAE government does not allow.

Related: Top 10 Startup-friendly Countries in The World

Hiring Local Talent and their Management

If you are a foreign entity and want to start a business in the Dubai region, you will require some local staff to run your business operations.

It is still not easy to hire the locals because the UAE has some set guidelines that you will have to follow.

Understanding these rules and guidelines will make it a lot easier for you to navigate the UAE’s labour laws

You may also find that managing local employees is more complicated and challenging than hiring them due to the differences in work culture, language, and business approach.

You may want to consider bringing in local management team to oversee the operations.

Related: How to Attract Top Talents to Your Company

Getting Work Permits and Visa

A foreign entity will require a work permit to start a business in Dubai, UAE, along with the residence permit to live and work there.

If the foreign entity wishes to bring the employees overseas, he will have to follow certain norms.

Again, this can be challenging because it requires a lot of paperwork.

Complete the paperwork very carefully, even a small or silly mistake in your application can lead to your request’s rejection or denial.


Starting a new business and operating it without any hurdle is not an easy task, especially when you are starting the business in a foreign country.

It requires the right strategy and a lot of understanding, patience, and the correct approach to successfully running a business.

To ensure you’re on the right track, you may want to consider bringing in experienced business setup consultants in Dubai.

They will not just help you in starting your business; they will guide you through every step of the company formation process like visa services, trade name registration, business license, pro services, getting an initial permit, opening a bank account, and whatnot.

Most business consultants in UAE have a team of professionals who will always be available to assist you.

With their expertise and experience, you can run your business in a hassle-free manner, while focusing on the essentials of your business activities.

Author Bio

Amy is a zealous writer and with her passion to read and write about business setup in Dubai, UAE and the challenges the new businessman face in our modern world. Her inquisitiveness towards learning about how businesses has evolved in emirates is commendable. With such curiosity embedded in herself, she researches extensively before writing a blog to deliver a credible and detailed content piece.


  • Sam Steve

    Sam Steve is a strategic content marketer and founder of Emira Digital Publishing. He helps clients grow their online presence by writing primarily about digital marketing, SME growth hacking strategies, and productivity. Connect with Sam on social media:

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