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5 reasons businesses fail in Abu Dhabi


13th April 2015

For individuals and companies wanting to set up shop in Abu Dhabi to take advantage of all the benefits of doing business here, be warned, you need to do your homework first. It’s easy for businesses to fail anywhere, but following are five key areas where companies go wrong when trying to do business in Abu Dhabi.

Cultural awareness

Its essential to understand and acknowledge Arabic business etiquette, this could help to forge relationships quickly to build trust and respect, such as women not shaking hands unless the other party reaches their hand out first; and, discussing pleasantries such as enquiring after the other party’s family before engaging in business conversation. Not respecting these and many other things could be a deal breaker. See our guest blog about the Importance of Culture when doing Business in Abu Dhabi.

You need to be in Abu Dhabi

So many companies want to incorporate here but manage the business from their HQ on the other side of the world. It just doesn’t work. Business in Abu Dhabi is based on relationships, spending time getting to know people, not just potential customers, but also business connections and industry peers who can facilitate introductions and share opinions on the current market situation. It’s important that you are seen on the ground, regularly, to give the community a sense of commitment – that you are here to stay. Also, meetings are often arranged last minute, so I always say to people – don’t underestimate the value of an impromptu coffee with a connection! If you aren’t here, you can’t keep as well connected or so well in touch with the market.

Market research

I am still amazed when I am approached about setting up companies and the client hasn’t done any market research. It sounds obvious, but it is essential to know the market. Is there a need for your product or service? Will it need to be adapted in some way? Who will your clients be and how will you market/sell to them? What type of premises will you need? Do you know the regulations about employing staff? Who are your competitors? Will you need to adapt your pricing? Is your sector in growth or decline? These are just a few questions that you need answers to. The old saying is true: Prior Preparation and Planning Prevents Poor Performance (the 6Ps).  See our blog with our 3 top tips about preparing to enter the Abu Dhabi market.

Cash Flow

Anticipate your spend for the first year in line with your projected revenues. Starting a business is an expensive investment. There are a lot of upfront costs, such as the incorporation, license and legal fees, premises and fit out. There are also ongoing costs to consider, such as marketing and staffing. Are you establishing a cash in hand business or if not, how quickly will your customers settle invoices? Abu Dhabi is not a place to be without any cash and funding is hard to come by, especially for start ups.  In addition to the business costs, you will also need to consider your personal living costs, such as accommodation (rents are usually paid a year upfront) and school fees (which may be free in your home jurisdiction, but will need to be paid for here).


It can take time to secure contracts so you need to invest in networking and meeting as many people as possible. Lots of people find traditional networking events difficult, but overcome this speaking to the organisers in advance and they will be more than happy to introduce you to a few people on arrival to get you started. However, networking isn’t just in the work environment, business here is very social and you could meet a potential client via a local sports club, voluntary group, or any other interest/activity group. Everyone is a potential client or business development opportunity, once people know you and you have developed a sound reputation, you will be amazed how happy people are to recommend you and connect you. A good book of connections is essential.

Related Blogs that you may be interested in:

Complete Guide to setting up a business in Abu Dhabi     CLICK HERE

Obligations for companies once they have their Trade License     CLICK HERE


For sponsorship, company formation and assistance with your Abu Dhabi company's ongoing compliance requirements, contact Gateway Group of Companies.  Email us at: info@GatewayToAbuDhabi.com

Jenny Hunt Business setup specialist Abu Dhabi

Jenny Hunt, CEO Gateway Group of Companies

email Jenny@GatewayToAbuDhabi.com

Twitter @JennyatGateway

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