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Why Should You Start A Firm Instead of Launching a Startup?

By Ananya - 27 Jan 2022 Last Updated: 04 May 2022
Why Should You Start A Firm Instead of Launching a Startup?

Table of Contents 

  1. 1. Launching a Startup
  2. 2. Why the UAE?
  3. 3. Why Should You Start a Firm Instead of Launching a Startup?
  4. 4. Key Disadvantages of a Startup
  5. 5. Conclusion

Starting a business in the UAE is quite simple, and many organizations and foreigners are eager to take advantage of the opportunity. The United Arab Emirates has undergone a remarkable shift during the last many decades. It has evolved from a fishing and pearling nation to a financial powerhouse with a diversified range of successful sectors. In addition, the country has a stable political structure, a strong capital flow, business-friendly taxation, and trade regulations that are liberal. As a result, the country is becoming a more popular investment destination. The key highlight of our study is Why Should You Start A Firm Instead of Launching a Startup?

Launching a Startup

Starting a business is a difficult task. When starting out on this path, entrepreneurs experience a range of emotions. They have days when they believe they can conquer the globe and days when they believe the business is over. The life of an entrepreneur, on the other hand, is the most gratifying, because the business owner has the opportunity to create a firm from the earliest stages of conception through the go-to-market stage and beyond. Starting a business has a large upfront investment. If you plan to launch your business in the Dubai or UAE Free Zones, life becomes a little easier.

In the previous few years, Dubai has seen the rise of startups, as well as their importance over corporate. Dubai is now a growing hub of startups with excellent success stories, which has piqued the consumer's interest. The wide range of startups, from corporate to retail to travel, necessitates not only mentorship and assistance, but also space and location that are both profitable and easily accessible for the benefit of the company.

This is how one can own a startup in the UAE:

  • Setting up a Mainland company entails a non-Emirati shareholder partnering or forming a firm with a UAE national partner or sponsor who owns a majority stake in the company, a step that is also followed by a number of companies.
  • Creating a firm in a free zone is becoming a more popular option among entrepreneurs these days. A Free Zone Company or a Free Zone Establishment can be registered. FZE and FZC are limited liability businesses with a single shareholder in FZE and two to five owners in FZC. To operate outside of the free zone, the products must be distributed through a local agent. Both FZEs and FZCs can import commerce, equipment, and goods from any country without paying customs duties, while some items are forbidden in free zones.

Why the UAE?

The United Arab Emirates has evolved into an international hub for entrepreneurs looking to advertise and sell their goods and services in the region. It's also great for high-net-worth individuals looking for a suitable location, a healthy way of life, decent flight connections, and good workers. Having a firm in a free zone offers its own set of advantages. Freehold property in Dubai is also available to business owners. Free Zones typically have strong infrastructure and a favorable business climate. As a result of the UAE government's support for free zones, many amenities and benefits are passed on to businesses operating within them.

However, one must consider the benefits and drawbacks of operating in a free zone. As previously stated, enterprises operating within Free Zones can only function within Free Zones. They are unable to serve consumers in areas of Dubai other than the free zones. In addition to the 38 existing free zones, nine more are currently under construction in the UAE. From "A" industries like alternative energy to "Z" industries like zero-customs ports, the Free Zones encompass practically every industry group. All registered businesses are exempt from municipal taxes and have unlimited capital repatriation.

Companies operating in free zones are also exempt from paying import or export tariffs. UAE is a diverse country, and its startup environment is young and expanding, with a variety of business models tailored to MENA consumers. Despite economic turbulence in surrounding Arab countries, the UAE remains a safe haven of stability and openness.

Why Should You Start a Firm Instead of Launching a Startup?

A firm is a for-profit entity that is independent of current market solutions from an economic standpoint. The title implies that something new is going on behind the scenes, whether it's new production techniques, organizational structures, or items that haven't been seen before. The terms don't have to be mutually exclusive. Some startups are firms, but not all startups meet the criteria. Firms that create novel products and services are just startups.

Key Disadvantages of a Startup

Launching a startup has several disadvantages. These have been further described below:


Whether you're bootstrapping a startup with your own money or collaborating with an investment firm that wants a big return on their money, there's no avoiding financial risk when starting a business. While company planning and financial forecasting can help to limit financial risk, there is no way to totally remove it.


To establish and maintain a successful startup, you must have a certain level of self-assurance. When starting a firm, most entrepreneurs will face some level of self-doubt. Understandably, their vision, leadership, and business acumen are all on the line. One of the disadvantages of starting a business is that an entrepreneur's ability to persevere in the face of self-doubt and potential failure is critical.


Even for the most well-planned organizations, launching your own startup entails inherent risks, including a degree of uncertainty. As a result, in order to battle the stress and unpredictability of starting a business, an entrepreneur must be adaptable and resilient.


Starting any sort of business in the UAE requires a plethora of steps and other several duties. Dhanguard can assist you in the business setup process from that start to its end, if you are looking for any business setup services in the UAE, connect with us, we will gladly assist you.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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