Doing business in Dubai. learn everything you need to know to do well

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The Dubai News (Issue #14)
  Dubai City Information Site
Doing Business in Dubai - A Comprehensive Guide
 
Hi

This newsletter is focused on everything you need to know about
doing Business in
Dubai.  I have tried to make this as comprehensive as
possible so that you can keep this email and refer to it from time to time.  There are also links that will lead you to
further detailed sections of each topic. I hope you enjoy reading this and I hope
it proves helpful for you.


So have you ever considered investing in
Dubai or doing business in the tax free
haven? Sounds glamorous? Sure does. It comes with its own nuances and
complexities. But if you are able to overcome those, then there is no sky to
your progress. You can keep flying as high as you want.


Keep in mind that I am writing from my own experiences. I have
several friends whose families have been settled in
Dubai for decades. They are all doing
business in
Dubai
in one form or another. None of them work for wages. They are not employees. 


In addition,
Kish's
dad used to be an employee but became the Managing Director and CEO of his
company.


Although still an employee (a high ranking one), he is also part
owner of the business through owning shares.


Couple those facts with my research over the past few years and I
can say I've learned a thing or two about how it is doing business in
Dubai.


Business in
Dubai
is good overall. There are many wealthy individuals and the upper middle class
is growing rapidly because of the latest economic boom the City has been
experiencing. More people are relocating to
Dubai today for white-collar jobs than
anywhere else.


All this activity proves fruitful to companies in Dubai. If you are interested
in doing business in
Dubai,
the single most valuable piece of advice I can give you is to focus on building
long term relationships with the local Nationals.



Here in the
US
we use the term "relationship" very lightly. You hear it all the time in companies
(I hear it all the time! I even use it!). But is this the same kind of
relationship we are talking about here? Absolutely not.


In the
US,
your relationship is only as good as the bottom line. When cash runs out or if
you can no longer benefit from the other party involved, it is time to let them
go right? As sad as this is, it is very true for the most part.


It is the complete opposite in
Dubai. Doing business in
Dubai boils down to doing business based on
relationships. I mean true human relationships, not business relationships.


Unlike the US and many other places where it is all bottom line
oriented, there is so much wealth in Dubai that the numbers are the least of
the concern for many involved in business. It's truly all about relationships
and rapport. If you understand that you will be very successful doing business
in
Dubai.


You have to be a National (citizen) if you want to do business in
Dubai; and
Dubai
does not grant citizenships through naturalization. So it becomes important to
establish a good relationship with a local Arab so that you can enter a
business venture through partnership.


This is a very big decision because the local that you partner
with becomes the owner of the business on paper. Practically however that
person remains silent. So basically you work your a^*@#& off and yet on
paper someone else owns your business.


It is very important to establish a good trusting and long lasting
relationship. A business is a serious venture, especially if you will be
heavily investing in it. That said, it is not easy to find trusting partners in
Dubai that you
can become comfortable with.


Even if you do find someone, you can't become comfortable with
them overnight. Neither would they. But then again, what do they have to loose
right? To do business in
Dubai,
you need a good reference or connection. You need someone to introduce you to a
local that you can trust and are comfortable dealing with.



It is very difficult to find someone, let alone build a relationship, without
being introduced to them by someone else. My friend Riad (Ray) has been trying
to find someone for years now.


He has been back and forth to
Dubai
from the
US
at least 10 times in the last 24 months. That is a lot of 15 hour trips across
the globe! He is about ready to quit and he tells me how difficult it is every
time I speak to him.


My friends' families on the other hand moved to
Dubai
back in the day when
Dubai wasn't the
Dubai we know of today.
The rules were the same, but doing business in
Dubai was much easier. Many times locals
advertised themselves as available to do business with.


Those who moved there and have been settled and doing business are
doing very well. Of course they pay their silent partners hundreds of thousands
and even millions of dollars every year for simply using their name. The
partners do absolutely nothing!


I still won't forget my trip to
Dubai sometime in 2006 when I went for my
friend Sunil's wedding (yes his name is Sunil too). We were talking business
and he told me that last year they paid their silent partners close to $2M USD!
My jaw just about dropped.


See Sunil's dad is involved in a few venture. They have a textile
trading company, an electronics sourcing company and most recently he started a
small real estate private equity type group. They are trying to liquidate and
get into real estate solely given the massive boom
Dubai is experiencing in property values.



Anyway, I won't sit here and tell you who to trust and who not to. All that
comes down to your personal inclination and gut feeling. Some people are more
trusting than others so it just depends on your appetite to trust and your
risk. It is very important to keep that in mind when making an important
decision such as doing business in
Dubai
by teaming up with a local.


Most of my friends who have been doing business in
Dubai are very happy. I
mean why not. Sure they pay up their wazooos, but they are also getting rich at
the same time. It's a win-win situation for all.


On the other hand, my friend Hansie was cheated on a few
occasions. His dad had to completely dilute a company because of disagreements
with his local partner. Generally this is not a smart move. Not so much because
it's bad for business, but simply because you can get kicked out of the country
immediately and no one would even know.


Yes,
Dubai
is known for "deporting of the hip". One mistake and you're gone! That is why
you can't have a citizenship to begin with! That is why the country/city is so
safe. People are afraid of committing crimes and making mistakes. If they do,
they might not see another day in
Dubai.
I will cover this more on my website.


But my point is that knowing who to trust and do business with is
an individual decision. Things are risky overall but if you don't take risk you
won't see any rewards. That goes for anything in life. Just make sure you are
well informed and take calculated risks whenever you contemplate a tough
decision; in this case doing business in
Dubai.


Use the American
Business Council in Dubai
 to
guide you with your business ventures (that's if you are currently based in the
US).


Their constitution stresses to development of commerce and
investment between US and
Dubai
as well as the other Emirates. This is a FREE and volunteer composed resource
so make sure you take advantage of it.


Train
Yourself Locally


One way to win the respect and trust of the locals is to blend
with them. This goes for anything right? Think about it. If you come across
someone that shares the same culture and language as you, wouldn't you feel
closer to them off the bat?


This is human nature. It is particularly helpful when you are
overseas away from your country. Meeting someone who shares the same background
as you is comforting and encouraging.


Learn the basic customs, rules and regulations of
Dubai. More on this in
other sections of our website. Also, learn the basic "Hi" and "Hello" type
words in Arabic. This is not hard.


Grab a self teaching program and just do it.
Kish can partly understand Arabic and can
speak a lot of it too! Just a little bit will help tremendously with your
business in
Dubai!


Laws,
Regulations and Taxes


Once you get started conducting your business in
Dubai, all else falls into place nicely.
Laws, regulations and taxes are not of concern. Everything is very relaxed and
as long as you are going about your business legally and cleanly, there is
nothing to worry about.



Dubai does not tax your personal income so that is a big plus for a lot
of business men and entrepreneurs. Many companies are also taking advantage of
the tax haven by establishing locations in
DubaiCity.


The Jebel
Ali Free Zone
Dubai


The Jebel Ali Free Zone Port of Dubai is located 35 kilometers from The
City. The port was established around 1970 and a small area was developed
around the port to house all the construction workers that worked on the port.


Jebel Ali is the biggest port in the
Middle
East and the largest mad-made harbor. The sight is absolutely
amazing. This port is extremely busy as billions and trillions of dollars in
international trade are transacted here every year.


The area has improved dramatically over the years. As
Dubai is progressing,
DubaiCity
is expanding outward and overlapping into nearby territories like Jebel Ali.
When I was in
Dubai
in 2007 I stayed in a corporate apartment in the Jebel Ali area.


Everyone told me how nothing used to be there and roads used to be
narrow and made of dirt. I just couldn't believe it. When I was there it looked
like
Pasadena,
California. They even built a brand new Ibn Batuta Mall in the area which is supposed to be
one of the biggest and best malls in the
Middle East.



Dubai Investments


So what do you do with all that extra cash from doing business in
Dubai? Whether you do
business or work, you will likely save more money at the end of the year. Here
in the
US,
.40c of every $1 I make goes to my long lost Uncle Sam.


That is A LOT OF MONEY!!!! You can save your money (savings
account), invest it in a CD (certificate of deposit) or buy Gold which is
increasing beyond belief. Did you know that Gold is more valuable than Diamonds
today? Amazing isn't it?



Dubai has some of the best 24K Gold in the world. A lot of
Dubai's Gold is supplied directly from
India (once known as the Golden
Hen). I have not seen Gold as pure as the one I see in
Dubai.


You can also look into Dubai Properties. Real estate in
Dubai is booming and
property values have experienced unprecedented growth since 2005. Rents are up
30% in a two year period and there is no sign of slowing down. Real estate is
probably the best
Dubai
investment (in my humble opinion - though I think that a bubble does exist!).


In fact the rent to mortgage spread in
Dubai is about 7% on average. This means you
can get a loan and pay 3% interest rate and rent your investment property out
for 10% cash flow after paying your mortgage.


10% minus 3% is 7% pure profit in your pocket. And the best thing
is that your tenant pays your property off. This is free equity! Appreciation
on your property is icing on cake.


All in all you just made bank! Hey doing business in
Dubai also entails smart
real estate investing. For many this IS a full time venture.


Also consider Dubai investments online. There are many
options available today that might fit your investment profile. Managing your Dubai finances is key in successful business tenure
in
Dubai. Why?


Check out this excellent Dubai investment company
resource.
 This
company has the most comprehensive market and industry information covering the
entire Middle Eastern region including
Dubai.



[Pardon this brief tangent: If you don't manage your finances and simply keep cash in the bank
account, you are actually loosing money over time. With inflation, your $1
today isn't $1 tomorrow. You need your $1 to grow at whatever the inflation
rate is to keep up with rising costs.


In countries that tax your earnings, you need to make your money
work even harder. Suppose inflation in your country is 3% and your tax rate is
25%. That means if you have $100 invested and you earn 5% on it, you are really
taking home a .75% return.


Stay with me. 5% return on $100 is $5 right? A 25% tax on $5 is
$1.25 right? Subtract that from $5 and you are left with $3.75. A 3% inflation
on $100 is $3 right? Subtract $3 from $3.75 and you are left with only a .75
cent gain. Do you see why you need to make your money work hard for you and
grow?]


Read more about Dubai Investments in this discussion.



Dubai Stock Market


The Dubai Stock Exchange, or the Financial
Market was founded in March 2000. It has been well received and investors are
slowly developing confidence in it overtime. As of 2007 there were close to 60
companies listed.


Most of the companies are local UAE based companies and others
from the Middle Eastern Region (also called MENA). Investments are open to
foreigners and are often good avenues to diversify your portfolio as well.


More and more companies are joining the Dubai Stock Exchange and
the list of participating industries is also growing.


Read more about the Dubai Stock Market here.


Banks in
Dubai


Banking in
Dubai is pretty
straightforward like in the
USA.
There are financial institutions established left and right. You can find a
bank pretty much anywhere.


Banks in
Dubai offer pretty much
the same financial products and solutions that you will find in the
US.
After all, the entire world has modeled their economy after the
US -
to some extent.


Pretty soon the whole world will look the same as one. True
Globalization!


Read more about banks in Dubai in this discussion.



 



 


The Jebel Ali Free Zone Dubai - Tax Free Trading &
Business


Today, the Jebel Ali free zone is home to some 6,000 companies, a
long cry from just 19 when it was started in 1985. Learn about this business
heaven and all it has to offer companies willing to set up shop within its
boundaries. 


Want to Work in Dubai? Know the Working Guidelines First


The great thing about work in
Dubai is the way things are so neatly
organized, from working hours to the number of annual leave days that each
employee is allowed. Now you might prefer a more flexible set-up but for most
employees in
Dubai,
this is the "way of work" they know about. 


Banks in Dubai - Banking in Dubai is No Longer
Complicated


Banks in
Dubai
are everywhere today. At one time (not too far back) banking was such a hassle
in
Dubai, but
all that has changed. 


Companies in Dubai are Just Booming Left & Right


Companies & business in
Dubai
are both booming, flourishing and prospering ever than before. Thanks to the
decree of 1985,
Dubai
companies have never looked back into the past. 


The Dubai Employment Scene - Find out What It Is Like


The
Dubai
employment scene is booming and ever changing. As the industries prosper and
continue to expand, so will employment in
Dubai.
Dubai jobs can
be found left and right today. 


Working in Dubai - The Financial Benefits (Salary,
Bonuses, Allowances)


Working in
Dubai
can be very good for many when compared to some of the western nations,
especially the 'no personal taxation' part. I am not sure how many of you have
worked overseas, but if you had, you will be able to see the benefits of
working here right away. 


The Dubai Investment Company is Like Berkshire Hathaway
on Steroids


The Dubai investment Company is quite well diversified and offers
you an easy way to optimize your investments in such a way that you do not have
to spend any more sleepless nights worrying about "putting all your eggs in one
basket". 


Dubai Investments - Counting the Cash



Dubai investments are as good as any other,
if not much more lucrative and safer. In scope and size, they offer you a
valuable opportunity to make some good money by investing some of your savings. 


Dubai Stock Exchange - A True Cash Cow


The
Dubai
stock exchange continues to remains unaffected despite the global markets
suffering from the sub prime industry crash and global credit crunch. 


The Dubai Stock Market Has Double & Tripled Since
March 2000


The
Dubai
stock market is one of the best today (2008) to turn your investments to high
gear. The average Joe investor has tripled his investment since March 2000 and
the trend remains the same. 


Setting Up a Business in Dubai


Setting up a business in
Dubai
can be very easy, but once you know the rules and regulations.
Dubai is a business
friendly place and running your own business here can be extremely lucrative,
especially with no tax. 


Shipping Agency in Dubai


Read this discussion if you are looking for a shipping agency in
Dubai. Shipping agencies
play a major role in the transportation of goods from one country to another.
Find a reliable partner for your business here. 


Dubai Ports World


Dubai Ports World controversy was a recent dispute (2006) in the
American government that led to a sale of operations by the
Dubai
government to the
United
States. 


Lawyers in Dubai


There are many lawyers in
Dubai
and you may need one either for business or personal issues at any point. Read
this discussion to find out about the best ones to engage who will get your
work done for you the right way. 


Distributors in Dubai


Read about the distributors in
Dubai and how much they impact the local
economy.
Dubai's progress and emergence has
created an opportunity for even the small importer and exporter to claim a
piece of
Dubai's
economic pie. Definitely critical to doing business in
Dubai. 


Dubai Secrets - Setting up a Successful Business


By far the best guide for investors and entrepreneurs wanting to
do business in
Dubai
that I have read! From legalities, pros and cons to step by step guidance. 


Setting up in Dubai - A Business Investor's Guide


A highly acclaimed book on doing business in
Dubai that has received rave reviews. It is a
pricey investment but well worth it from what I have heard. I cannot speak to
its content as I have not read it yet. I will write a review on this book once
I have read it and include it in the Dubai Book Review section


Setting Up a Business in Dubai - Why, How, etc.


Doing business in
Dubai
comes with a unique set of challenges. Find the perfect business partner in
Dubai to set up your
company and start conducting business. 


Cost of Starting a Company In Dubai


Want to know the cost of setting up a business in
Dubai? Starting a business
in no joke, and it certainly isn't in
Dubai.
But the benefits can far outweigh the costs. 


Dubai Business Services - Start a Business, Set Up Your
Company Wisely


Engage the right
Dubai business
services firm to set up your business in
Dubai.
Quality business establishment services have distinguished the successful
companies in
Dubai
to date. 


Banks in Dubai Gamble on Oil Revenue Securitization


Oil revenue securitization aided in the
Dubai Stock Market bust, and business in
Dubai
in general. Find out how banks in
Dubai
gambled with oil securitization and went south as a result. 


= = = = = =


 
In the next newsletter I will
write about The Popular and Mostly
Visited Areas in Dubai. Don't forget to tell us what you are interested in
so we can bring you ONLY the latest and greatest information that you are MOST
interested in.

Take
care and see you soon...


 


~Sunil


The Dubai City
Information Site is the first and only comprehensive website on Dubai
from a fresh, practical and first hand perspective. 
 
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