Business Tips and Insights by Dubai-based Entrepreneur Preeya Malik
Interview with Preeya Malik – an Entrepreneur, U.S. licensed attorney, immigration rights advocate and Co-Founder of investment immigration firm STEP America. At STEP America, she helped expand the firm’s reach to Dubai, Qatar, Mumbai, New Delhi, and Singapore, as well as securing the building and development of several Hilton and Marriott Hotel properties across the U.S., a number of private charter schools, and cutting-edge government infrastructure and technology projects. Preeya is also an expert on navigating the entrepreneurial landscape in the UAE and the Middle East.
What can you tell us about the latest in the startup and entrepreneurial scene in Dubai/ Middle East?
Dubai and the Middle East is probably one of the best places I’ve seen thus far in terms of opportunities for both entrepreneurs and startups. Being a fairly “new” city, Dubai is a breeding ground for new, innovative concepts and ideas which entrepreneurs continue to develop as well as introduce from other parts of the world. I think the city was built on individuals coming in and starting their own businesses in manufacturing and trade. That has evolved into younger professionals in the fields of technology, consumer services, and retail adding their experiences from all over the world. We are constantly seeing more support and development for the startup scene. For example, Forbes Middle East just recently honored the top 50 most promising startups in the U.A.E, giving entrepreneurs something to strive while demonstrating the value the Middle East is placing on encouraging and fostering startups and new businesses.
What according to you are some of the biggest misconceptions and surprises of living and working in Dubai?
I think one of the greatest misconceptions about living and working in Dubai, especially as a female entrepreneur, is that it is difficult to function as a woman in business. Most people think that women in the Middle East garner a lower level of respect in a more male dominated society – especially in industries such as business. From my experience, this just isn’t true. As a woman living and working in Dubai, I have encountered certain discriminations, such as the strong preference of some to associate with or to work with a male instead of a female. Unfortunately, these are issues females face from time to time in any business landscape and aren’t specific to the Middle East. People who have never visited the region or hold stereotypes in their mind are constantly questioning me in disbelief about my decision to move to Dubai and start a business. These misconceptions never really existed in my mind and after living here, the misconceptions people have as to how women are treated in the Middle East just seem so out of place.
Can you tell us what it’s like being a female startup founder in the Middle East and the need for more female entrepreneurs in the region?
Being a female startup founder in the Middle East has been a positive experience. People have shown great respect for what I have been trying to do here in starting up a professional investment firm. I don’t think people are as accustomed to seeing women in positions of authority, especially within the financial or legal industries. The number of women entrepreneurs and leaders in the Middle East is growing significantly, especially over the past few years. However, I think these success stories need to be displayed internationally so as to diffuse the misconceptions people may have about women functioning in business in the Middle East. I truly believe this display of success will encourage more women to enter the market with ideas unique to females, which is what we need here in the UAE in order to continue to grow and develop the economy.
How are women entrepreneurs perceived in the US vs in Dubai?
It’s interesting in that I feel female entrepreneurs are respected both in the US and in Dubai almost equally. In fact, I feel that being a female entrepreneur in Dubai draws even more positive attention than in the U.S. because it has not yet become so commonplace in the region to see a woman starting up and operating her own business. People seem intrigued by the idea of a woman being “brave” enough to start her own business in the UAE while in the U.S. we are accustomed to seeing women in positions of power and authority. Many of North America’s largest corporations are headed by women, and we have a women currently running for President. Since women taking on such roles is a newer concept In Dubai it is somewhat intriguing. It also draws attention to the business itself if started by a woman.
From your experience, can you share some of the biggest business lessons from living in the UAE?
Business in the UAE largely revolves around relationships. Culturally, business is done based on trust and often on a handshake. The UAE and Dubai particularly are relatively small ponds. One may be faced with a large amount of skepticism prior to building those relationships. For this reason, business transactions are often long and drawn out. The most important lesson I’ve learned about doing business in the UAE is to be patient and know that investing time into building strong relationships will eventually yield you with beneficial and positive results. The time spent networking and building these relationships is often better spent than vast amounts of money on marketing or other forms of business expansion.
What are the key differences between owning a business in the UAE/Middle East vs the U.S.?
One of the things I realized quite quickly while starting up in the UAE was that it is much more difficult and regulated in starting a business and becoming licensed in the UAE compared to the United States. While in Florida, I was able to launch my law firm quite quickly and easily. Everything is done online, and the fees are also nominal to incorporate a business. However, the UAE is much more stringent, both in monitoring the types of business activities that are going on as well as collecting fees for such monitoring. The whole process is more expensive and comprehensive, but clients and customers view proper licensure as a sign of validity.
The other difference is the vastness of opportunity. I view the UAE as a small pond where you can grow into a big fish quite quickly, while North America is a huge pond with various small fish and a highly monopolized market across many industries. With the UAE and Middle East still viewed as regions of growth and development, there is a lot less competition with new concepts and ideas in comparison to the level of saturation and competition you would find in the U.S. This type of environment provides the opportunity to succeed at a much faster rate and at higher levels than in the United States or North America generally.
What’s the difference between starting your business in a Freezone vs Non-Freezone in the UAE and why is it important?
The Freezone vs. Non-Freezone (or DED – Department of Economic Development) routes were a very different concept I encountered when trying to decide how to structure my business in the UAE. There are multiple freezones across the UAE. In a Freezone, one can own a business outright as a foreign individual, however, all operations and business transactions must be done within the freezone as that is the only area your business license will hold validity. Should you wish to do business outside of the freezone, or within a DED area you must properly licensed by the Department of Economic Development. A DED license requires one to have a local partner who owns 51% of the business. This is very common and there are locals who will agree to be partners in businesses. Most of the larger hotels, and corporations outside of the freezones are partnered with a local individual as a partner.
Knowing where the majority of your business transactions will be handled and marketed as well as where your demographic is coming from will play a huge role in deciding whether to gain licensure in a freezone or outside of a freezone, or perhaps obtaining a license in both.
Starting a business in Dubai – can you briefly tell us on how to start from scratch?
When starting a business in Dubai there are various moving parts that may make things complex and require some additional organization on the part of a start up or entrepreneur. First, you must need a resident visa to own a business in the UAE, however, you must need a business or employer to generally obtain a resident visa. This means both processes have to run simultaneously. In addition, most landlords wish to see a resident visa prior to renting out a residence. This also makes it difficult as the process of both getting licensed and then getting the resident visa can span over a couple of months.
Many times both commercial and residential landlords will request annual rental payments upfront. If you are lucky you can have these divided into two or three payments over the year by providing post-dated checks. However, it is difficult to get a loan from a bank to pay these full amounts prior to having any history with the banks and by being a brand new resident in Dubai. Therefore, it is necessary to come prepared with a substantial amount of savings to be able to adequately start up a business in the UAE.
I would certainly recommend hiring a PRO or an experienced firm in starting up your company and gaining the appropriate licenses. It may be an extra expense but that expense is definitely worth it as the business landscape can be hard to navigate as a new business owner in Dubai.
What are some of the best ways for networking and marketing your business in Dubai?
The Middle East and this region generally are open to forms of marketing which may not be available in other parts of the world. For example, SMS and Whatsapp happen to be very popular in terms of marketing products and services or even doing business. This is never something I encountered in the United States as a business owner.
As mentioned earlier, the business landscape is based heavily on relationships and referrals as well as who you know. There are a number of groups and organizations aimed at bringing together business owners and entrepreneurs. There are also many groups targeted toward specific industries. If you seek out these types of organizations and affiliate yourself, your network can grow very quickly. Dubai is generally a small city which is still developing and so your reach can go very far.
Can you share some tips and advice for businesses and entrepreneurs who want to move to Dubai?
Be prepared for large start up expenses. Many expenses in Dubai both to start living here and to start a business require upfront payments. Licensing is expensive, and so are living costs. This is one of the major differences between starting a business between the UAE and North America.
Begin networking in advance of your move. It is easy to contact individuals in your industry even from abroad and I have found people to be very responsive to emails or phone calls. Networking prior to your move will give you better insight into how your business will work and how it should be structured so that you can hit the ground running upon your arrival.
Don’t be afraid to ask for help. People are generally willing to help, and therefore it will benefit you to ask questions and ask for help where needed. Other entrepreneurs and business owners will be happy to provide you with their own personal knowledge and experiences quite openly so you aren’t going at it alone.