As Dubai continues to hurtle into the 21st century, it is becoming an increasingly popular business destination for businesses of all sizes. Dubai’s strategic location provides access to potential clients in different continents including Asia and Europe, both of which can be reached via a short and convenient four hour flight, making the emirate a great prospect for setting up a product or service based business.
As small and midsize enterprises (SMEs) find Dubai’s business laws lucrative and its central location ideal, more investors are choosing the emirate as a business destination.
To keep costs low and maximize their profit margins, most SME’s prefer to look for a virtual office from which to conduct their business. As the name implies, a virtual office is a work environment that does not have an actual physical space, but provides a Dubai address for marketing purposes.
It is ideal for individual owners or freelancers who want to do business in Dubai, but have limited resources and minimal staff requirements. To summarize, a virtual office gives business owners the prestigious Dubai address they are looking for their business without the additional requirement and expense of investing in a traditional office space.
Location and Rules for Set-Up
As per current Dubai business laws, investors who are looking to set up businesses in one of Dubai’s Free Zones are compelled to rent a physical office space as Dubai Free Zones prefer established businesses with good track records as opposed to small individual investors, and do not offer a virtual office set up. However, there are several free zones in the Northern Emirates such as Sharjah and Ajman which do offer this type of set up with minimal up-front investment and many of these also waive the share capital requirement.
To encourage business from more Dubai based investors, many free zones from the Northern emirates have opened up offices in Dubai to allow them to service their Dubai based clients quickly and conveniently.
Although they do not offer virtual office set-up, many Dubai free zones do offer their small business investors a type of Virtual office set up that offers business centers in which investors can visit on an as-need basis and use available desk space as and when required (on a first-come-first-serve basis). Some of these business centers also offer additional services such as conference room facilities (need to be pre-booked), which can be rented on an hourly basis, a telephone hot-line and a fax number.
In a virtual office set-up, although business owners are allowed to work from home or another remote location, their home address cannot be used on marketing media such as websites and business cards as this is against the law. This is where a virtual office set up can come in handy.
Individual free zones operate by their own rules and regulations and will deal with tenants who are directly registered with them. Before setting up a virtual business it is advisable to have a clear vision of the business plan including when the business might outgrow a virtual set-up and require a physical office space. This is essential because companies that move from one free zone to another will have to terminate their business and go through the entire set-up process again with a new free zone.
Registered service based businesses can work with other free zone or mainland based companies within the UAE and will need to provide at least a half page description of their proposed business to ensure it complies with free zone regulations.
Virtual Office Fees
Fees for virtual office set ups vary from one free zone to another and can start from as low as AED 10,000 per annum for an office address and a shared telephone and fax number (excluding visas or license fees). Minimum office set up costs including two visas, business license and registration fees for a year can start from AED 25,000 per annum. When the virtual office package includes business center amenities, fees usually start at AED 35,000 per annum and include a maximum of four visas. The number of visas allowed depends on the free zone selected and usually goes up to a maximum of 5 visas per business. If more visas are required, the business is required to rent a physical office space within the limits of the chosen free zone.
Types of Virtual Office Set-ups
There are a few different options of virtual office set-ups depending on the business owner’s requirements:
Virtual Office for Marketing
This type of set up offers the business owner the opportunity to use the name ‘Dubai’ on all PR material used for marketing purposes. The address used is that of one of Dubai’s many business centers used as a P.O.Box with secretarial services on a monthly basis. It does not give the owner the ability to legally conduct business within the UAE or to get a residence visa or a corporate bank account. No physical office space is offered.
E-office or Flexi-office Set up
This type of set up is a full business set-up, licensed only through Northern emirates in the UAE, many of which maintain an office in Dubai to service their clients. In this type of set-up business owners require an official business license, a corporate bank account, currency accounts and cheque book facilities. Upon successful registration of the company, the owner can apply for a residence visa. Often, free zones licensing an E-office or Flexi-office set up require proof of share capital, which is usually in the range of AED 100,000 to AED 185,000.
Dormant Virtual Office
A dormant virtual office set up offers business owners a business address, a shared fax number or a shared telephone number in Dubai purely for invoicing purposes only. This type of business is ideal for web-based businesses that can easily be operated from home.
Consultants for Virtual Office Set-Ups
The process of setting up a virtual office can be quite complex and many business owners, especially if it’s their first time doing business in Dubai, prefer to use consulting services that help with finding the appropriate package and pricing as well as the inherent paperwork involved in the process.
For business owners who want to have their licenses from Dubai, there are numerous consultants within Dubai that can offer expert advice including DMCC (Dubai Multi-Commodities Center), DWC (Dubai World Central) and DSOA (Dubai Silicon Oasis Authority) that help with set-up.