7 Factors to Consider When Choosing a Business Location in the UAE

Setting up a new business is exciting, but selecting the perfect business location is vital. It can make or break a business. In the past, many companies have shut down due to poor location choices. The business location factors into a company’s net income and profitability. It is also crucial to attract the right talent pool and establish long-term relationships with customers, partners, and suppliers.

Here are seven key factors to consider when selecting the ideal location for your business in the UAE—in short, a business location in the UAE guide.

Why is Choosing the Right Location for Your Business Important?  

Choosing the right location for your business, especially in the UAE, is important as it directly impacts your operation and growth. An excellent business location ensures proximity to customers, suppliers, and industry clusters, such as the DIFC for finance or Dubai Internet City (if you operate in the UAE), which boosts visibility and engagement. Moreover, prime locations enhance brand perception, attract skilled talent, and provide a competitive edge, driving long-term business sustainability.

Mainland vs. Free Zone: Your First Business Location Factor  

For the unversed, in the UAE, businesses can establish their companies in either the mainland or free zones. Companies establishing their business in the mainland UAE can have full access to the UAE market. Meanwhile, businesses in the free zone can trade both within the free zone and internationally. Moreover, companies operating in the mainland are subject to taxation, customs, and VAT, which are often exempt in free zones. Therefore, the first “business location factor” you must consider when starting a company in the UAE is whether to operate in the mainland or a free zone.

7 Things to Keep in Mind When Choosing a Business Location in the UAE 

Here are seven things you need to consider when choosing a business location in the UAE:

1. Study the Demographics 

The first business location factor to consider is the regional demographics of the locality you are considering. Studying the demographics of each location you are considering will help you choose the right place for your products or services.

Consider important demographic details, such as:

• Cumulative household income
• Age group
• Gender
• Race
• Ethnicity
• Education level, and more.

Based on your customer profile, select a community whose population aligns with your target market.

2. Don’t Forget the Business Set-up and Rental Cost 

When choosing your business location, consider setup and rental costs, as well as the minimum capital required to start your company in the region. Depending on your budget, you can choose to set up your business on the mainland or in a free zone. Don’t forget to check the taxes applicable in the region.

Income and sales taxes vary from emirate to emirate. Therefore, it’s also important to consider other location-specific expenses, such as grant and vehicle permit costs.

3. Prioritize Logistics and Infrastructure 

The location you choose for your business should be accessible from different parts of the city. Moreover, different parties, customers, employees, and suppliers should also be able to reach your business establishment conveniently.

If you are in the import and export business. In that case, proximity to seaports, airports, and major highways, an excellent logistics network, and ample warehousing space at lower costs are important considerations to ensure ease of shipping, tracking and tracing, and the timeliness of logistics services.

Lastly, your business location should have modern, technologically advanced infrastructure to support all your operations.

4. Less Competition, More Customers  

Select a location where the competition is less and where there are enough customers in the community to buy your products or services. If you need a substantial market share, you should locate your business where you are the primary supplier to that target market. Too many competitors selling the same product may hinder you from creating a large customer base.

5. Location That Enhances Your Brand Image 

Choose a location for your business that allows you to create a unique brand image or enhance your current one. For example, if you are launching a media or creative agency, setting up in Sharjah helps position your brand within a recognized creative hub, reinforcing credibility and aligning you with other innovative companies in the sector.

6. Local Governance 

One of the most critical UAE business location factors that one should look into is the governing laws and zoning restrictions in the area that may affect your business activities. Check whether the location offers any incentives, solutions, or packages to help lower your business expenses.

Free zones are the best choice as they have easy-to-understand rules and diverse business solutions and services designed to support entrepreneurs.

7. Growth Opportunities 

You should choose a vibrant business location that offers current and future growth opportunities to your company. If you aim for future growth, select an area that offers flexibility and room for expansion through good access to other markets.

Conclusion 

Your business location can significantly influence the success of your company. That is why establishing your business in the right place is critical. Consider the above eight business location factors to make the right choice.

If you are looking to set up a new business in the UAE, consider Sharjah Media City (Shams) Free Zone as your company location. Choosing Shams means aligning your business with a free zone company designed for modern entrepreneurs—low costs, high flexibility, and a community that amplifies your growth.

Call Shams authorities at 800 (Shams) 74267 to learn about the setup process or visit www.shams.ae for more information.

Frequently Asked Questions (FAQs) on How to Choose the Best Location for Your Business