The UAE is a global business hub, strategically located at a pivotal geographical region where trade, commerce and diverse cultures meet and coexist. Due to this, the country has consistently attracted investors and entrepreneurs leading to its strong economic reputation in the global market. It is rated as one of the top 20 best destinations to do business in the world by AT Kearney and among the top 30 most networked places in the globe as listed by the World Economic Forum.
Small and Medium Enterprises (SMEs) make up 95% of the UAE’s enterprise population and contribute to a big part of its 414.18 billion dollars annual Gross Domestic Product (GDP). Flyingcolour, a leading business setup, accounting and VAT services consultancy in the UAE, has set up over 10,000 of such SMEs since its launch 15 years ago. Their key focus: helping entrepreneurs avoid mistakes during the setup of their businesses, especially those that could cost them big time when their business gets into the expansion phase.
Commenting on some of the common mistakes that businesses make, Flyingcolour Business and Accounting & VAT services, CEO, Mr. Meet Joshi says “Some companies make the first big mistake in their very first decision. Choosing the zone in which their business will be registered. They don’t treat the decision with the seriousness it deserves. This is not a decision that should be made based upon business registration costs of various zones alone. It is a strategic business decision, but many entrepreneurs are trying to save on costs at this stage. This is a common mistake that only causes bigger problems in the future.”
Mr. Meet adds that wrong choice of business zone can lead into 30% higher expansion costs than if the business was set up correctly in the beginning.
Mainland business licenses require a UAE national to hold 51% shares, while free zones and offshore allow up to 100% foreign ownership of companies. At this stage the decision on where the business should be located should be made based upon the desired partnership structure and the future of how the said business should be set up, and not based upon cost alone. Also, there are different rules in Mainland & Free zones and the choice will also depends on the business plan, target market etc.
Another common mistake is the choice between various free zones. Each zone offers different benefits and limitations with the need for entrepreneur to adhere to zonal regulations. Different free zones have different business activities, rules and facilities available with them. The selection of free zone highly depends on the nature of client business. For example trading companies would possible look free zones with port and warehouses.
Another common mistake is poor business planning. A study conducted by the Organization for Economic Co-operation and development found that less than 50% of businesses in the UAE make it past the 3rd year. The main reason for this is often poor financial planning. This is made even worse by competition, delay in payments or receivables and poor marketing. Flyingcolour Business setup and Accounting & VAT Services, advices it’s clients to bridge the gap by tracking expenses closely. Especially expenses incurred in the set-up stage. The company proposes to offer entrepreneurs a platform where they can track expenditure incurred in business set up costs on their website – www.flyingcolour.net – a solution that would be popular among the 500+ clients who have left the company a positive Google review.
“It was an eye opener for me to be able to have a general overview of set up costs even before I started running my business. What I had always looked at as a dream become a serious business to me and I immediately had to start thinking about targets, where my revenue goals should be and making an effort to break even. The consultancy also helped me to see which costs will be recurring in the 2nd year of business and made it possible for me to plan ahead.”
Commenting on the same issue, Flyingcolour Business and Accounting & VAT services, CEO, Mr. Meet Joshi adds, “It is easier to make necessary alterations in your business planning if you have a picture of where you are spending most of the money. This is the only way you can cut stay abreast with expenses and make adjustments where necessary”.
The company plans to continue guiding more entrepreneurs. Their key value being total transparency in every stage.
To learn more or book a consultation please contact Flyingcolour Business and Accounting & VAT services on their website – www.flyingcolour.net