With 37 free zones across the UAE, giving companies 100% ownership, there are many options on where you can register your new business startup. However, once the legal and official end of the process is done, the old adage of, ‘location, location, location’ truly sets the profile for any company looking to make a distinctive mark.
Before delving into the details of why an office address is important, a few clarifications:
Free Zone visa vs a mainland company
When setting up a new business in the UAE, the first thing determining the office address, is the license, free zone, mainland or offshore. Free zone companies are 100% self-owned, and don’t require a sponsor or an agent to act as a liaison. A mainland company refers to a business registered on the mainland, in partnership with a 51% local sponsor, and operating all over the UAE. The geographical area and the license under which a new business in the UAE registers, determines the location and nature of the office address.
Renting an office space, with annual renewal, at the Jebel Ali Free Zone Authority (JAFZA) is mandatory if a new business startup is licensed there, whereas, certain businesses with specific activities, based out of the Fujairah Creative City, for example, do not require a rented space serving as the official business address.
Legal vs business address
The size and structure of a registered new startup business dictates the importance of the office address. Smaller outfits licensed under the free zones can occupy a minimum-required office space within the prescribed, free zone geographical proximity. Equally, a new business startup registered out of multiple free zones (under the “one free zone passport” scheme), can choose to list an office address that best profiles the kind of corporate image they want to portray.
Representative office vs branch offices
Existing business startups in the UAE, as well as, companies operating from abroad can set up representative offices. The difference between a representative office and branch office is determined through the powers granted to each. A branch office address, allows a company to conduct business in the UAE and make a profit, whereas a representative office must outsource all its work back to the parent company and where ever it has been set up. Setting up a representative office address allows a business startup to enter into the UAE market, while it maintains a stronger foothold abroad. This kind of an office set up is more cost effective, with more favourable tax conditions. It is also a mark of slightly more established, economically-stronger enterprises, that want to make and entrance into, and feel out the local market.
Dedicated office address vs shared business hubs
One of the best things about the UAE is how the country serves as an incubator for a lot of business startups in Dubai and the other emirates. This kind of economic environment fosters business and entrepreneurial creativity. To meet that demand, the Dubai government particularly, has created multiple initiatives to encourage growth.
Listing a physical office address is an important prerequisite for any business startup in Dubai. Depending on the scope and scale of the business, an enterprise can choose the address it wants to list. Once a minimum investment granting a trade license has been made, most business startups in the UAE go for serviced office spaces. Serviced offices are usually of a high standard and offer access to landmark buildings, that profile a business’s standing and image, without the need for larger initial investments. Smaller enterprises, especially new business startups can choose to list their office address out of shared spaces and hubs.
Location, quality and costing
Location, quality and costing are usually the most important considerations for businesses. Choosing a place that is central, serviced by supporting transportation infrastructure, and close to where employees and expatriates live, becomes key in determining the success of a newly-established startup. Factoring in setup and rental costs of your office address, in conjunction with licensing costs etc. has to be undertaken at the start when planning to set up a business in the UAE.
Enlisting the help of professionals when setting up a company license and office address in the UAE helps smooth out the process. Book an appointment with one of our trusted consultants at Decisive Zone and get expert help on how to set up a business in Dubai today.