Cities like London, New York, Tokyo, Hong Kong, and Singapore generally have higher office rent prices than Dubai. Having a physical office space in the UAE is part of the UAE government’s regulatory/ legal obligations your business has to fulfil in order to be operational in the country. Each emirate has its own licensing and registration procedures, and compliance with these regulations are necessary.
In many cases, your business needs to have an Ejari (a tenancy contract governed by the Real Estate Regulatory Agency (RERA) in Dubai and other authorities across the UAE) and a valid trade license to rent an office space. An Ejari is mandatory for obtaining trade licences, visas, and conducting business activities in the UAE. Without a valid Ejari, the business may face penalties, fines, or even suspension.
Here are some of the things recommended to UK SMEs to consider when planning on expanding their operations to the UAE.
Leases
The rental lease terms for office space in the UAE can vary, but they are typically signed for a minimum of one year and subject to VAT. The lease agreement would outline the terms and conditions, including rent amount, payment schedule, renewal options, and any additional fees or charges.
Office space rental prices in the UAE can differ significantly based on several factors including location, size, quality, and amenities. The most expensive areas are often found in prime business districts such as Dubai’s Downtown, DIFC (Dubai International Financial Centre), and Abu Dhabi’s Al Maryah Island.
Landlords & how they work
Office rental landlords in the UAE provide office spaces to businesses on a rental basis. They could either be individuals, companies, or real estate agencies that own or manage commercial properties for leasing to businesses. Landlords in the UAE tend to advertise their available office spaces for rent through various channels, including online property portals, real estate agencies, and their own websites.
Upon a business deciding to lease an office space, terms and conditions are negotiated with the landlord. These may include the rental price, lease duration, security deposit, maintenance responsibilities, and any additional provisions.
Payments / rent structure
In the UAE, the tenant/ company is typically required to pay the rental amount on a monthly or quarterly basis, as specified in the lease agreement. It is not uncommon for a landlord to also request a security deposit, which is normally refundable upon the end of the tenancy, subject to meeting the agreed-upon conditions.
In cities like Dubai and Abu Dhabi, office leases commonly fall into two categories: gross leases or net leases, contingent upon the contractual agreement between the involved parties and prevailing market norms in the respective emirate or area where the property is situated.
Unless specified otherwise, tenants typically bear the responsibility of covering internal property maintenance costs, utility charges, and taxes imposed on the premises.
Office space fitout
When it comes to office fit-outs in the UAE, there are several important factors and considerations that UK SMEs should keep in mind. In regard to regulations and approvals, each emirate may have specific guidelines regarding building codes, permits, and approvals.
Additionally, depending on the type of space & design your company opts for, a realistic budget has to be determined; as costs can vary significantly as a result of certain factors including the size of the space, desired quality of materials, and complexity of design.
FZs inasmuch as they are also your landlord if you are set up in one
The UAE offers various options for office setup, including free zones and mainland areas. For a UK SME to setup a on office in a free zone in the UAE, the process is relatively straightforward and streamlined. Free zone authorities effectively are the landlords and often provide a one-stop-shop service that facilitates company registration, licensing, visa processing, and other administrative procedures. There are limitations however, as the initial setup costs can be higher compared to establishing an office outside the free zone.
Onshore options are greater
Onshore/ Mainland offices, nonetheless, offer numerous advantages and opportunities to UK SMEs setting up in the region. For instance, being onshore allows you to tap into the talent pool & vibrant business ecosystem, as well as connect more easily with potential partners, suppliers, and customers. Nevertheless, having an onshore office can ensure you to have access to high-quality facilities, which can enhance your company’s operational efficiency and productivity.
BCB option & advantages as a registered Incubator
With the close support of the UAE authorities, the BCB has developed a unique structure that allows UK SMEs a quick, cost-effective and low-hassle set up and licensing path to establishing a corporate presence in the UAE. Through the BCB’s incubator platform, UK businesses benefit from the BCB’s full support to get your business underway in the Middle East. Our incubator platform offers numerous advantages including UK SME’s having the opportunity to operate through the BCB’s existing licence/ Ejari/ office, thus removing the arduous tasks of you having to independently source an office location, complete Ejari application, sort out office fitouts and utility charges (water, electricity, and internet), property tax and more.
Establishing an office, obtaining an Ejari certificate in the country are crucial steps for UK businesses looking to operate successfully in the region. By understanding the significance of these factors and making informed decisions, you can unlock opportunities and thrive in the UAE’s vibrant business landscape. Get in touch to learn more on how we could support your business and how have successfully helped more than 60 UK businesses set up in the region.