Setting up a business in a foreign land is fraught with challenges and tough choices. To test your business in an uncharted territory takes courage, conviction, and resolve from the entrepreneur’s side. Benefits that await these entrepreneurs are huge and will fire up their chances of making it to the big league (if the product is really good).
However, it’s not all a bed of roses, as there are many difficulties that business owners face on a daily basis in the UAE. Here are some of those difficulties that come with setting up a business in the UAE:
Company Formation
Setting up a business in the UAE often requires a local sponsor, who holds a majority stake in the company. Finding a reliable and trustworthy individual who will continue the legacy of the company can often involve a lengthy screening process.
Cost of Operations
Starting a business in the UAE can be expensive, due to high office rent, business setup fees and visa costs. Therefore, many entrepreneurs and business tycoons are hesitant to consider the UAE as an ideal location for their highly globalized business.
Scale of Competition
In the previous decade, numerous international organizations have made big efforts to establish a foothold in the Middle Eastern market which has made the playing field highly competitive in the UAE. While this competitive scenario has been a boon for the residents of the UAE, companies have often found it difficult to make a niche in this cultural melting pot.
Culture and Language
Cultural differences can create challenges for foreign companies attempting to establish a business in the UAE. The Middle Eastern/Arabic culture is starkly different from the Western or Eastern/Oriental culture and there are a lot of cultural sensitivities that brands have to keep in mind before launching their marketing campaign and reaching out to their target audience.
Another barrier for international organizations and brands can be the language as well. Hiring native experts and understanding the regional context in the local language is of paramount importance.
Lack of Market knowledge
When stepping into a completely new region, brands can often find themselves armed without adequate market information and their first foray into the new country/region can turn out an arrow in the dark that has a 50-50 chance of being a hit or a miss. A lack of knowledge about local market trends and consumer behavior can make it difficult for businesses to succeed in the UAE. It is important to be patient and have an open mind while analyzing the target audience as the product or the services rendered might need to be tweaked significantly in order achieve success in the UAE.
