Pros, cons, regional specifics of doing business in the UAE

Russian entrepreneurs share their impressions of the UAE and their experience of starting a business in the Emirates.

"Few green areas, but many business opportunities"

Roman Doronin co-founder of Optic and EORA projects

Dubai — amazing transportation hub. You can get here from most capitals of the world and many large cities. It's easy to legalize here: get a residence permit, a bank account. Emirates is safe. And also — a large space for networking in the form of various activities, conferences, events. 

The UAE welcomes all nationalities, ethnic groups and cultures.

But here it is much more expensive than in Moscow, Yerevan, Tbilisi. Dubai is in the price category of San Francisco, Tel Aviv and Singapore, you need to be prepared for this. But the neighboring emirates are not so expensive. You don’t look much on foot, but you will have to take your license again: Russian documents do not apply here.

There are few green areas in the country: everything is very yellow and blue, and lovers of forest landscapes may be uncomfortable.

From a business point of view, there are many advantages: a large number of free zones that can take on different forms of companies, start-ups and individual entrepreneurs. For some areas there are special conditions. For example, in Abu Dhabi, companies from the gaming industry are compensated by the state for 30% of their salaries.

The disadvantages include the small size of the domestic market for IT companies and a lot of competition from companies from neighboring countries. In the UAE, high costs for salaries, inconvenient banking applications, expensive legal services.

The differences between the Russian Federation and the Emirates are huge for IT companies. Locals love to communicate face-to-face so much that they may refuse a Zoom call. Remote work is not understood here: a company must have an office if it wants to work in the domestic market.

When choosing a contractor in the context of IT, local companies prefer Arabic-speaking contractors, then they look at companies from India, and then at all others.

There is no single media that will be read by everyone, because the UAE combines different cultures and peoples, each has its own sources. It is difficult to do PR for a wide audience.

"Medicine without insurance — luxury, but partners are easier to make contact»

Alexandra Dorf, co-founder of GreenO, business angel, ex-founder of Beru!

From a year of relocation experience, I can say that myths like "no one needs you there" — nonsense. With knowledge of English at an elementary level and a desire to improve, you can find work in an international environment. And if you are an experienced entrepreneur, then there are niches to start. 

A huge minus — bureaucracy. In addition to quests with bank accounts, difficulties with DEWA (single state utility provider) and other housing and communal services, Ejari (lease registration system) and residence permits.

Medicine here is good, but very expensive: a recent express visit to a pediatrician cost 15,000 rubles. Some of the services here are disgusting and also expensive — for example, a taxi. And any food. At least in a restaurant, at least in a 24/7 store near the house.

It's best not to download air pollution monitoring apps, otherwise you won't want to go out. This air quality is manifested in fine dust that covers the balcony and the floor adjacent to it. There are also dust storms.

From the pros: cheap furniture, gadgets, cars and yachts are here, this is not "luxury"; for the UAE. Here in the concept of "luxury" includes green grass and medicine without insurance. There is a great infrastructure: a gym and a swimming pool in every house, jogging tracks in parks and bike trails on the beach and in the desert.

Children spoke and read English fluently at a British school. Hot climate — it's not as scary as snowdrifts and knee-deep mud. You miss the off-season only for the first six months, and live grass is compensated by living in a green area. Yes, there are some in Dubai too.

The specifics of the region, of course, affect the business. In Russia, people like to communicate quickly, clearly, to the point, without any "small talks". In the Emirates, there is a completely different approach: here business partners are looked at for a long time, it is important what kind of person you are and how serious your intentions are.

But at the same time, it is easier for locals and expats in Dubai to get in touch: a cold LinkedIn funnel works, just like WhatsApp follow-ups.

If you amplify this with an intro from the right people and back it up with informal meetings, you can build strong partnerships. This is important because many agreements are based on parole and one-pager proposal (presentation of an idea or project on one page), rather than large detailed contracts.

«Dubai — great business hub, but expensive»

Inna Anisimova, CEO, PR Partner Communications Agency

The main plus of doing business in the UAE — opportunity to work with international projects.

Emirates, in particular Dubai, — a huge business hub with representative offices of many companies, everyone speaks excellent English, there is air communication with all countries of the world and an almost zero tax rate. No wonder there is a growing demand for launch promotion in the UAE.

Cons for me — a long procedure for opening a bank account for a legal entity, the inability to withdraw funds from the country, expensive life (rental housing, insurance), as well as the climate: it is hot from May to September. For me, the pace of business life in the Emirates is not up to Moscow.

Among the features of the locals that you need to be prepared for: locals love to communicate live, but at the same time they are regularly late and may even forget about the meeting. They can also easily change the time or date, and it doesn't matter that you flew in specifically for this. The locals love to establish relationships, you have to meet them several times to sell.

"It's hard to survive the summer, but you can build a global business"

Kim Sanzhiev, founder and CEO at Get Outfit

Dubai — it is a city created for entrepreneurs. It is easy to register a company and start doing business here, there are practically no taxes, there is a great potential for the development of the region. 

So far, the most difficult thing was to survive the summer in Dubai. It can also be noted that the local market itself is small and the region is a bit more difficult for product localization. But, on the other hand, you immediately think about building a global business. We look at this region as a launching pad for testing hypotheses with further access to the more developed markets of the US, UK and Europe. Dubai – multinational city, 90% of the population – expats. This makes it possible to test hypotheses on small segments of different audiences. 

Locals are slow, need a local command to work

Alexandra Gerasimova, co-founder of Fitmost

In the UAE, the usual link "time is money" does not work. Decisions are made here for a very long time, it is important to be prepared for this. 

In addition, the difference in mentality really affects the business, so a local team is required. By the way, due to the difference in the background, at first there were difficulties with hiring employees: it was not always possible to understand whether they were suitable for the company. Now we have already formed a separate operational team that understands the specifics of the region.

"Personal contacts decide a lot" 

Alexey Galtsev, founder of IT company Realiste

Since the majority of the population of Dubai — expats, there is no feeling here that you are alone in a closed foreign Arab country. 

At the same time, there are some differences from the usual norms: it is better for girls to wear slightly more closed clothes to meetings than they are used to. Oversized fashionable this season will do, trousers — you can, there is no talk of any head covering.

We need to get ready for the fact that it is customary to make friends offline here and make appointments not on zoom, but over a cup of coffee. Be prepared to talk a lot and hug when you meet. At large meetings, alcohol should be excluded, it is not accepted here.

It is especially difficult for startups with Russian roots to cope with opening a bank account: they are not refused, but they are not helped either.

Decision — only in personal contacts: to find someone who will hold the hand and really help to arrange. But in general, business breathes easily here.

"Everyone is friendly to expats, but big business belongs to the locals"

Anton Kondratyuk, Founder of Fikra

Pros: easy to start, easy to open a company, no taxes. The dirham has a fixed exchange rate against the dollar and, in fact, your income — dollar. You can spend any amount of money, but you can live quite economically: a big city, a lot of opportunities. Everyone speaks English, friendly attitude towards visitors, because visitors are all here.

UAE — a rare place now, where being Russian will play a plus, because there is an interest in Russian projects. There are direct flights to many countries of the world, a small difference with Russian offices (+1 hour).

The presence of local large and medium-sized businesses, the presence of large offices of most international companies: often projects from 60-80 countries pass through the Dubai office of a global company due to the tax regime.

A lot of business activities, there is always something to do, the ideal climate is half the year, there is the sea.

From the minuses: it's hot in summer and many people leave for a remote location, no one is in a hurry and does not process anything, all the main trends are set "from above", all big business is owned by locals in one way or another.

You will almost certainly not become a citizen of this country. Companies also like to put pressure on price cuts and bargain.

A high standard of living is combined with the "bazaar of being"

Anastasia Davydova, founder of Movingo relocation platform

The biggest plus is that this is a very interesting market: it is developing very quickly, and many things familiar to a Russian person can be brought. There is a high level of comfort of life and a level of security.

Cons: it is difficult to open bank accounts for citizens not only of the Russian Federation, but also of almost all CIS countries. Multinationality and great cultural differences oblige to adapt to new communication traditions, sometimes it is difficult and can greatly affect business processes.

There is still a minus in this "bazaar of life", when some things are solved by a simple message on WhatsApp, while others are solved for a very long time, because everyone is drinking tea and does not want to rush anywhere.

There is a very large part of Asian expats here, and their understanding of time is very different from the European one, you have to constantly make allowances for the next missed deadline.

Dubai — absolutely not a pedestrian city, it is very frustrating. There is very little quality entertainment here. And the weather: summer period — it's just hell, it's impossible to be on the street, the temperature is +40 even at night. Experienced expats prefer vacation or remote work during this time.

Personal experience

Here you can survive the "venture winter"

Alexandra Dorf, co-founder of GreenO, business angel, ex-founder of Beru!

During global recessions and venture winters like this, Dubai is a safe haven. There is a very open environment, charging, conducive to experiments in finding PMF and forgiving mistakes at the start. 

Very cool startup and venture community, the infrastructure for it is also developing. Specifically, for Russians, this is a friendly, non-discriminatory environment: any bullying and inciting ethnic hatred is prohibited by law. That is why most of the investors and HNWI moved to Dubai.

I'm currently launching a new operating business with partners in the FoodTech industry. We will make an official announcement after the launch. But even now I can say that it will be one hundred percent local business, related to what is close and interesting to me — healthy food. We look at this market with great optimism, it is growing at a serious pace in the UAE and is supported at the state level.

Before that, since moving to Dubai, I was responsible for the launch and development of the UAE market at Realiste, a startup that developed AI technology for investing in the real estate market.

It was a rich and interesting experience as a CBDO MENA. My team and I started our expansion in the UAE from scratch. We did it in six months: three pivots of the business model, in order to find the current Product-Market Fit, held 300+ meetings with all local top developers, real estate agencies, banks and government agencies, signed more than 20 contracts and generated more than $1 million in revenue per month.

With the help of a small BD department, we set up automatic data collection for the first online brokerage IT platform in MENA. Before us, no one could systematically hack this question.

It's impossible to list and remember everything when you work 24/7, seven days a week and hold five business meetings a day in different parts of the city.

Unfortunately, my personal and sports life is still developing: I don’t have time for it at all in the stream of business meetings, business networking and operating systems. My day starts at 6 am and ends at midnight. But, honestly, I love this rhythm of life!

What frustrates me is the big gap between the picture and the essence of the country. In the picture, as in the fireplace painted on the wall in Papa Carlo's closet, — advanced technologies, metaverses, solar-powered cities of the future and flying drones.

And if you make a hole in the picture of the fireplace and look inside, then there are no business processes there. Inside, everything is chaotic and manual labor: here we write, here we wrap the herring. Dubai itself is like a real startup.

We are pleased with the focus of the UAE government agencies on constructive changes, the introduction of technologies and the improvement of all business processes, and not just a "facade change".

Networking has become a mainstay

Inna Anisimova, CEO, PR Partner 

When it came to retaining some foreign clients, I chose the Emirates.

Quality networking has become my mainstay. Thanks to partners in the Equium Club and to the SORP Group client, we solved some organizational issues. And clients came to us through word of mouth. The team was not transported, the guys work in Moscow. We will soon start with a separate site on the .ae domain with cases.

I live in Moscow, I visit Dubai once a month on average. Therefore, my life remained as usual: working with a team, networking in business clubs, sports, family. I am glad that I can combine my usual mode with regular business trips to the Emirates. In March, I even combined a business trip with a vacation — spent a few days at a swimming camp in Dubai.

And again about the importance of an offline office

Roman Doronin, co-founder of Optic and EORA.ru

EORA.ru develops AI-based application solutions for e-commerce and FMCG companies. We immediately started looking at the MENA region, because only here we can enter with our own capital without attracting investments.

Now we work without a full-fledged offline office, and despite the presence of an Arabic-speaking sales team, remote sales are difficult. Next year we plan to open a full-fledged representative office "on the ground".

Another project I'm working on — Optical — located in Dubai development office and AI-research. I believe that it is Dubai— a convenient point for creating offline infrastructure: offices, accounts, transportation of employees. One of the main advantages of — transport accessibility.

An even more promising market for FashionTech is nearby

Kim Sanzhiev, founder and CEO at Get Outfit

We chose this region because we are building a startup at the intersection of Retail/FashionTech and AI/ML. Here, people love fashion, and in the last three years alone, the UAE market has more than tripled, and online penetration — from 13% to 41.5%. 

An even more promising market of Saudi Arabia with a young and solvent population is nearby.

We are building the Get Outfit recommendation platform to make shopping easier and more personalized. A few months ago, we launched an MVP in the UAE and within a week we received the first sales, well casted users, formed a product backlog and will soon launch a mobile application.

We were lucky, and we quickly received the first investment proposals here from local emirate angels with a good network in the UAE and Saudi Arabia. We are currently negotiating terms. We have already established contacts with local funds that are interested in investing at later stages. I see a good opportunity to take the first steps in building a startup in the fashion industry aimed at the global market.

Great place for wellness business

Alexandra Gerasimova, co-founder of Fitmost

The volume of the wellness segment in the UAE is the same as in Russia, but the growth rate is higher. At the same time, if in Russia some of the studios do not suit us, because there is a level like “Valera’s rocking chair”, then in the Emirates there are more clubs a segment higher. 

At the same time, there is weak competition here, and in the UAE we have the opportunity to supplement the business model with services for tourists. 11 million people have already visited Dubai alone in 2022.

The application in Dubai now has more than 55 studios, by the end of 2023 we plan to increase this number to 250. We focus on corporate clients when the company pays for subscriptions and other wellness products to its employees.

The UAE is also an excellent entry point for scaling into international markets. For example, we are planning further expansion to Southeast Asia.

Communities, events and media

Entrepreneurs note that due to the large number of expats, people in the UAE are generally tuned in to networking.

Friendly entrepreneurial communities are forming around large hubs like H71 or In5.

The UAE has a well-defined business season, which lasts from September to the end of March (before the start of Ramadan). By May, the temperature rises, with it, activities, meetings and events subside. In «high» the season is constantly going through a lot of interesting things.

It is recommended to search for profile events on LinkedIn among mutual friends.

There are several large communities for entrepreneurs with Russian roots, for example, Dubai Business, which brings together Skolkovo graduates and members of the Atlanta business club.

Networking among compatriots can also be found in thematic Telegram chats, for example, Dubai Unicorn Chat, World Model. There is also a separate channel Startup Events Dubai. The irony, the founders say, is that Pavel Durov and his team are in the UAE, and Telegram is used mainly by Russian-speaking expats.