If you’re considering entering UAE market, you may want to know all the options available for you. As a business owner, you want to take your company to new frontiers so you can continue growing and obtaining excellent results. For this reason, the UAE is the perfect destination for you.
However, it’s not as easy as many may think since there are many aspects you have to consider beforehand. If you’re struggling with your expansion and you don’t have a solid plan to enter this profitable market, it’s time to look for assistance.
In this article, you’re going to learn the best tips you can use before planning your expansion. In addition, you can gain understanding about the several strategies available so you can choose the perfect one for your business. Let’s observe:
- Entering UAE market: The best tips to develop a successful market entry strategy
- What is a market entry strategy?
- Why do you need a market entry strategy?
- Which steps should you take before establishing your business in the UAE?
- What are the most common market entry strategies?
- How can Connect Group help you entering the UAE market?
1. Entering UAE market: The best tips to develop a successful market entry strategy
Entering UAE market is a goal for many businesses around the world. If your corporation is expanding and you want to have global operations, the UAE is a great place to start. It is an attractive place for investors since there are many benefits that you can get by establishing your presence there.
Nevertheless, planning a global expansion it’s challenging, particularly when it comes to taking your business to new places where regulations are different from your home country. For this reason, you should know where to start and how a third-party can help you in this matter.
1.1 What are the best reasons to enter the UAE market?
Whether you’re a business considering a global expansion or you’re an investor that is planning a start-up, you may be wondering why the UAE is a great place to start.
Some of the best reasons why the UAE is an attractive place for business owners are the following:
- Flexible visa options
- Tax-free income
- Supportive investment
- Excellent infrastructure for all kinds of businesses
- Friendly trade policies
- It connects your business to the East and West regions
Corporations of all sizes and industries see in the UAE a haven for businesses where they can thrive. So, if you’ve decided that you want to have a solid presence in this region, it’s best to know how you can achieve this successfully.
2. What is a market entry strategy?
You need to have a solid market entry strategy for entering UAE market. It’s important for you to do this since it will allow you to have a smooth entry. In addition, you ensure continuity in your operations and you won’t face unexpected challenges or issues.
Therefore, a strategy to enter a market is a plan where you put all the tasks and actions you’re going to take to ensure a triumphant debut in the country of your choice. You must decide which key steps you’re going to follow and what your team will do.
2.1 What should be included in your market entry strategy?
You probably know that you must have a plan to enter a market, but what exactly do you need to evaluate? Here we have some of the considerations you must take:
- Do you want to form a company or would you prefer to have a local partner?
- How can you establish your branch?
- What are the rules and regulations you should follow?
- Which kinds of licenses do you need to operate legally?
- Can you start operations without having an office?
- How many employees do you need?
- How are you going to control your HR management?
Do you want to set up a Free Zone Company?
Once you’re sure the UAE is the destination for your expansion or for your start-up business, you have to develop an infallible plan that directs you to success.
3. Why do you need a market entry strategy?
Having a solid strategy is the key for entering UAE market successfully. It’s important to know that you carry out your expansion blindly because otherwise you’ll get bad results. Therefore, a plan will be your guide, so you can be sure that each step you follow.
Let’s observe the best reasons to consider a robust strategy as follows:
- Have a better understanding of the diverse cultural spectrum so you can decrease the culture shock
- Know which logistical challenges you may face so you can be prepared
- Define your goals and objectives better and realistically
- Determine your business targets so you can develop a solid marketing strategy
- Know how you can enter the market easily and hassle-free
- Set your expectations and fulfill them on time
- Face the complex laws and regulations to ensure compliance from the start
- Have a sound understanding of the market
- Determine which factors you should consider to establish your presence in the UAE
- Save costs and time by knowing the exact stages of your market entry
As you can see, there are many benefits of having a solid plan. For this reason, you have to consider all the recommendations and choose the best strategy for your business.
4. Which steps should you take before establishing your business in the UAE?
Entering UAE market means that there’s a lot of planning involved. Before starting the process, there are a few things you should carry out so you can have a robust business plan. Therefore, it’s crucial for you to know the current market conditions, so you can know how to get excellent results.
Some of the steps that you have to take before entering the market are the following:
4.1 In-depth market research
Each market has its own complexities, and the UAE has some aspects that you should know in advance. Many businesses look to establish themselves in this region, but not all of them can get the expected profits.
For this reason, you should carry out an in-depth market research so you can know how to make your products or services more attractive to your target.
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Some of the tasks you should do are as follows:
- Gather information about a segment of the market
- Analyze and interpret the data to know how your product or service will fit
- Learn about the current market conditions
- Research your competitors
- Look for the needs and preferences of your target audience
4.2 Business plan
Once you know how to expect regarding market conditions, you have to start developing a solid business plan. Some of the aspects you should consider are the following:
- Is your service or product profitable in this market conditions?
- How are your finances? Will you need an investor? Which costs are involved? Have you considered the fees for licenses, visas, etc.?
- Will the business be profitable over time?
- How are you going to market and sell your services or products?
4.3 Commercial structure
It’s important to learn more about the several commercial structures available in the UAE. You should make your research about this matter to determine which could fit your business best.
Let’s observe some of the structures your business can take as follows:
- Limited Liability Company LLC (on-shore)
- Foreign branch
- Limited Liability Company LLC (Free Zone)
4.4 Understand the laws
The UAE is a place where the authorities make sure the private sector complies with the laws and regulations. Therefore, if you fail to do this, your business can incur in liabilities and this can get bad consequences.
For this reason, if you’re planning on setting up a company you must learn everything about how to do this process. Perhaps it would be best to partner with a third-party that can help you have a better understanding of all of this.
5. What are the most common market entry strategies?
After you have carried out your market research and you have your business plan, the next thing you should do is determining the commercial structure for your company.
Entering UAE market means that you’ll have to opt for a determinate strategy so you can reap all the benefits and rewards. However, it’s important to note that an effective entry strategy is the only way to achieve your goals, so you should consider very well which one could suit you best.
Let’s take a look at the most common strategies businesses use to enter the UAE market, as follows:
5.1 Opening a branch office or representative office
As a business that is expanding, you may be considering opening a representative office or a branch office in the UAE. However, this option may not be the best for all businesses.
A branch or representative office won’t be able to carry out commercial transactions since you’ll need a local service agent. This partner will be in charge of some business activities. So, this strategy won’t guarantee the 100% ownership of your business.
5.2 Business license
Since a branch or representative office may not be your preferred choice, you could opt for business licensing. This is the most common strategy for businesses that are looking to enter the UAE market.
Once you get a license you’re able to sell your products or services directly, without the need of a local agent. However, getting your license could be a tedious process, particularly if you don’t enough information about how to do it.
This option may be best for small-sized businesses and start-ups, but it would be best to contact a third-party that assists you in this process.
5.3 Create a local company
If you’d rather have a company in the UAE then you can create one. Nevertheless, it’s important to note that for company formation, the UAE requests that the foreign investor should hold up to the 49% of the company. It means that you must look for a local sponsor to own the remaining 50%.
Most business owners may not like this choice. However, this varies depending on the type of company you’d like to form. In the UAE, there are two options for company formation: on-shore and off-shore companies.
- Off-shore: In the Free Zone, you could get 100% ownership of your business thus you avoid having to look for a local sponsor. However, as an off-shore company you won’t be able to conduct businesses on the entire UAE territory, in the Free Zone only.
- On-shore: if you prefer a Mainland company, you can get assistance from a partner such as a service provider that can be your local sponsor.
5.4 Local partnership
Another great option to enter the UAE market is by looking for a local partnership. This is a great choice if you’d like to test the market before. In addition, you can rely on your partner so you can reduce any risks.
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Some of the advantages are the following:
- Merge resources with the partner
- Get the benefits in relation to expertise and experience
- Have a better understanding of the market
- Understand the laws and regulations easily
- Navigate the cultural complexities
7. How can Connect Group help you entering the UAE market?
Here in Connect Group you’ll find everything for entering UAE market. Our solid services network is the perfect solution to achieve excellent results with your business expansion or start-up.
The UAE is the perfect market for your corporation to flourish and thrive. We focus on serving our clients around the world so they can meet the objectives they have set for their corporations.