Dubai is renowned as a growing and diverse economy, and this is one of the many reasons why thousands of new businesses are established in Dubai each year.
But while some businesses can be set up with little or no investment up front, others require funding. This can be for a variety of reasons, from acquiring equipment and stock to research and development.
If your startup requires funding above what you can source internally, where can you go in Dubai to source it, and how do you go about applying? Our guide reveals all the essential details, including:
Entrepreneurs have several ways to obtain funding for a startup business. One of the most common is through friends and family.
While bank loans used to be a standard option for startups, other methods have overtaken them in popularity in recent years. For instance, if you require a small amount of funding, there are various microloan companies in Dubai, as well as crowdfunding sites, which are becoming increasingly popular.
Then there are angel investors. These are usually experienced businesspeople who provide funds in return for a stake in the company. There are several angel investor networks active, such as the Dubai Angel Investor Network.
Private equity and venture capitalists offer similar routes to angels. Private equity providers usually take a minority share in the company, while private equity can take a majority stake, with a plan to eventually exit the business for a profit.
Another route to accessing funding is to join an accelerator program. There are various programs in Dubai, such as Sandbox. This is a 12-month program that gives entrepreneurs access to essential support geared towards scaling the business and ensuring it is ready for investment. Sandbox has partnered with various global businesses, meaning founders on the program can access benefits worth around $950,000.
There are numerous benefits to joining an accelerator program such as Sandbox, which is run by Dtec.
Accelerators aim to provide tangible benefits to a business and ensure the founders have all the tools they need to develop a successful business. For example, founders can get access to mentors and advice from experienced entrepreneurs. They also get help in vital areas such as product development, legal support, and tools to help the business scale.
These programs also help businesses to become investor-ready and bring exposure to startups among the investment community.
When you are establishing a business in Dubai, certain steps that need to be completed to ensure it trades legally. Here is an outline of the requirements:
Name the business
A crucial early step is to decide on a name for the company and then submit it for approval to the Dubai authorities. Dubai has certain rules on naming businesses that must be adhered to. This includes ensuring that the name has not already been used in Dubai and that it contains nothing profane or blasphemous. If you want to use your name, it must be your full name, with no abbreviations allowed.
Choose its activities
Another early step is to define exactly what activities your business will carry out. This is important as it will determine which licence you will need to apply for. Note that a company cannot conduct any activities it isn’t licenced to do.
Apply for your business licence
The next step is to apply for the licence. In addition to a completed application form, you must submit certain documents, including a copy of your passport and your Emirates ID (if applicable). It is vital to submit all the documents, otherwise the incorporation process will be delayed.
Apply for visas
If you are coming to Dubai to start a company you will need a visa. The process is relatively simple. You need to complete an application form and submit it, along with the required documents, to the Dubai authorities for approval. The process is slightly complicated as you are also required to take a medical test and fitness exam before your visa is approved.
Some of these steps might seem tricky, but there are business setup advisers out there such as Dtec, who can assist in ensuring the application is as straightforward and stress-free as possible. For more information and a bespoke quote, contact Dtec at: www.dtec.ae/contact/
Many costs must be considered when starting a company in Dubai, and these can vary significantly. For instance, the overall price depends on which sector your company will be operating in – business licences can vary in cost – how big you intend it to be and whether it will be based on the mainland or in a free zone.
Other costs may be applicable, such as buying equipment and stock and marketing the business.
One way to keep costs down is to get help with your company setup by working with a company such as Dtec. Dtec has various packages for startup businesses, which can be tailored to suit your individual needs, including service licence, workspace and visas. Prices start from AED 18,000, and you can contact Dtec for a personalised quote at www.dtec.ae/contact/
There are many routes to finding investors in Dubai. As mentioned above, there are networks throughout Dubai that provide access to funding providers such as angel investors and private equity.
Joining accelerator programs can also help increase the business’s visibility and bring it to the attention of potential investors. Money can also be raised from strangers by using crowdfunding apps or websites.
It’s just a matter of getting out there and making the contacts.
It can seem daunting to ask potential investors for money, but it is a necessary step. One of the key factors is to be confident in your business idea and have detailed plans for it – including financial details and projections for it, how you plan to develop the business and scale it and your targets for the future.
Regular events across Dubai are organised to give entrepreneurs the chance to pitch to investors. A polished presentation can go a long way to securing an investment.
As a startup, finding funding can be tricky, but Dtec can help. Dtec is the largest technology innovation campus in the MENA region and has become a hub for businesses in numerous sectors.
Dtec provides a wealth of resources to assist business startup owners in establishing and growing their businesses, including providing cost-effective flexible working spaces, accelerator programs, opportunities to source funding and networking events with leading players in the Dubai economy.
For more information on how Dtec can help your business, contact us today at www.dtec.ae/contact/