Virtuzone founder: “We’re setting up about 500 companies a month in the UAE”

Pictured: Neil Petch, founder and chairman of Virtuzone

Neil Petch is the founder and chairman of a company that many entrepreneurs in the UAE will be familiar with: Virtuzone.

After seeing a gap in the market more than 15 years ago, Petch and his co-founder Geoff Rapp took a plunge with creating a business that would help other businesses register licences faster and more efficiently in the UAE.

Since then, Virtuzone has grown by incredible leaps and bounds, with it now helping around 500 companies every month with securing their licences. In this regard, Virtuzone is playing a vital role in bolstering the SME sector in the Emirates, and helping the country expand its economy.

As Petch explains in this interview, the UAE is one of the best places in the world right now to launch a business. With an economy that is set to grow by more than 4 per cent this year, according to World Bank forecasts, and a continuous liberalisation of business laws here; it’s easy to agree. Here is a full video interview with Petch. Posted further below is an edited transcript of some of Petch’s key points.

Tell us about the backstory of Virtuzone, how it started, and where it is today.

Actually, it’s a great example that can hopefully inspire a few people. I’ve been in the UAE for 30 years. I initially set up a publishing company, which did extremely well. After selling that business, I was considering my next move. I launched a radio station and several magazines. During this time, a very good friend of mine, who worked for the Executive Office of His Highness Sheikh Mohammed bin Rashid Al Maktoum, wanted to set up a side business. He was involved in marketing initiatives, like wrapping the very first building on Sheikh Zayed Road with an Emirates Airlines ad featuring the Statue of Liberty.

He needed a company to handle such projects. He approached Media City for a licence, but they were full. He discovered that the demand wasn’t for physical office space but for licences without the burden of maintaining large offices. Startups typically don’t want the weight of high costs and large office spaces. The idea was to create something with minimal costs to enable entrepreneurs to focus their spending on generating leads and hiring the best talent.

At that time, Dubai was heavily focused on real estate. The authorities didn’t see the potential in a business that didn’t have a direct real estate play. Fortunately, I saw an opportunity. I took the idea to the ruler of Fujairah, and we set up a joint venture. There was already a free zone in Fujairah, but our goal was to create a jurisdiction that was approachable, modern, and easy to navigate. This would allow entrepreneurs to get licences and visas quickly and affordably, helping them start their operations without incurring huge costs.

And talking about the process of registering a business, how has it changed from then to now?

Well, we’ve learned a lot over the 15 years that we’ve been in operation. People who come to Dubai now can see the tremendous growth that has taken place. There’s no greater opportunity than there is at this moment. We’re witnessing a confluence of events that are creating amazing business opportunities.

To answer your question, what’s changed? One of the biggest changes is automation. When we started, I remember customers would come into our office and fill out forms by hand. We would then type the information into a computer, email it to Fujairah, where it would be printed and taken to the Free Zone office just 10 metres away. Throughout this process, human error was a significant issue, especially with variations in names like “Mohammad,” which can be spelled in multiple ways. A small error could result in a visa rejection after a month-long wait.

We learned to automate and take control of the process. Now, if you walk into our office near Dubai Mall, you’ll see 220 people working to ensure smooth operations. Our trade licence product was much more expensive than the government entities we competed with. So, we focused on customer experience and process efficiency to survive.

Fifteen years later, we’re learning how to further automate, use AI, and reduce human error. This approach benefits both our customers and our staff. Minimising errors leads to fewer objections and more satisfied customers, turning them into ambassadors for our company and for Dubai. I believe Dubai is the best place in the world not just to set up a company but to run a global business.

READ MORE: Why Virtuzone’s executives believe startups must emulate UAE for long-term success

And in those 15 years, how many companies have you helped set up, more or less?

We’re setting up about 500 a month now. So I would say we’re the startup capital of the world. At any given time, we’re talking to 300,000 customers who are either former customers, current customers, or prospects with whom we’re having ongoing conversations. Everything is about delivering content to people—ideally, content that is specific to them. 

For example, someone setting up a trading company has very different needs from someone setting up a fintech company. If they’re setting up tomorrow and their challenge is to get a bank account quickly, that’s a very different objective from someone who is still in the research phase.

I’m sure you’ve got insights into some fascinating data in terms of the type of people who are actually coming to the UAE to set up businesses. Can you give us some insight into that?

So, look, we’ve all heard of the Golden Visa, but I don’t think we fully understand the enormity of its impact. A few years ago, my company was doing extremely well helping people set up businesses and move to the UAE for the first time. Now, we’re seeing global companies and people relocating here, especially after the COVID-19 pandemic. 

Remember, it’s only been 18 to 24 months since people in places such as London couldn’t see their parents who lived half a mile away. They were being taxed 40 – 70 per cent on their profits. People came here and realised that the UAE reacted to COVID better than anywhere else and is much more tax-efficient. This has contributed to the property boom, especially at the high end of the market. 

People running global companies are thinking, “Let me come here, let my children grow up here.” Then they think, “Why not structure my company here?” The UAE is thriving. It’s the only country in the world with two international finance centres, epitomising due diligence.

Our KYC (Know Your Customer) processes, now automated, are comparable with those in London and New York. This automation allows us to communicate with anyone around the world. 

We work closely with amazing banks here, including digital banks. Most digital banks are just reskins of old banks, with outdated processes. A true digital bank, like Wio, is built from the ground up with automated processes. This speeds up compliance and security checks, making lending more efficient. We should be able to work in a borderless community where money moves around the world faster and more efficiently. Look at how India is buying oil more efficiently now and the benefits it’s seeing.

In the world of business, speed is everything. How long does it typically take to get a business up and running in the UAE? Can it be done in 24 hours?

To set up a licence, it can be as fast as that, but you need at least one person who has a visa in the country, and that takes a bit longer. It requires a health check, for example. By the way, I did my last health check when I got my Golden Visa, which means I can be here for 10 years, and my entire family can be here as well. The benefits of having a Golden Visa for your extended family are incredible. It’s what’s attracting amazing talent from all over the world right now.

When I did my health check, I didn’t touch a single human being. After I completed the process, a robot brought me an espresso. I posted a video of it, and my friends in London, who couldn’t see their grandparents [during Covid-19], were amazed. That’s symptomatic of Dubai. 

The point is, look at cities like Delhi or Mumbai, which have been growing for hundreds of years and deal with terrible traffic and other legacy issues. The UAE doesn’t have these legacy issues. You’ll be able to travel between Dubai and Abu Dhabi incredibly fast, without noise pollution issues. In two years, you’ll even be able to travel by drone from the airport. 

Let’s touch on the topic of income tax. We’ve just seen corporate income tax introduced here in the UAE for the first time. Do you think the next step is personal income tax here, perhaps at a very low rate, or is that something off the radar for now?

My personal belief is that corporate tax is a new phenomenon, and VAT at 5 per cent is virtually nothing. We’ve had VAT for five years now. I don’t see personal income tax as an immediate concern. As a country, the more you know about people, the better you can provide them with the services they want. In many democracies, people resist sharing their data. Personally, I’m for growth. I want the best people who work the hardest to do the best, and if I have to give up some data for that, I’m okay with it. That’s how the UAE operates.

With this approach, they will eventually have the data to consider personal income tax, but it’s all about maintaining a unique selling proposition (USP). If you’re Rolls Royce, you don’t suddenly decide to be half as luxurious. In my opinion, personal income tax might happen in the future, but it will be very small and not for a considerable period. By that time, we’ll have such a sensational infrastructure and standard of living that it will be manageable.

You made an interesting comment about the 2008 financial crisis. You mentioned that it had a peculiar effect in Dubai, where people who suddenly found themselves out of a job decided to start businesses. How many of those businesses do you think have become bigger today, and what does that say about the opportunities for entrepreneurship here?

That’s a brilliant point, and it gives me an opportunity to highlight that just when you think you’ve arrived too late or there isn’t an opportunity, that’s precisely the time to push forward with whatever you want to do. In our case, during the 2008-2009 crisis, we were not experts in setting up companies. My co-founder Geoff Rapp is a brilliant marketer, and I’m a sales guy. Suddenly, we had huge numbers of people coming through the door wanting to set up companies with their ideas because Dubai is very entrepreneurial. It makes you believe you can do things. 

But having an idea is only about 3 per cent of the process; execution is the most important part. Execution, execution, execution. Ideas are a dime a dozen. What Dubai and the UAE have done as a country is to support and facilitate that execution. It needs a private-public partnership to encourage entrepreneurship, and that was happening in a different way back in 2008-2009. 

Now, it’s happening again in so many ways, particularly with how legislation is crafted to encourage entrepreneurship. If you’re coming from South Africa, Australia, or anywhere else, you’ll find that you can really thrive here. Our challenge is to spread the word because many people just don’t know how good it is here. Some might want to keep it a secret, but that’s the wrong mentality. It’s like a business owner who doesn’t want to recruit someone better than themselves. Always recruit someone better than you, as that will enable you to do something bigger and better.

So, let the secret out: Dubai is a fantastic place for entrepreneurs, and the opportunities here are immense.

And what is the next step for Virtuzone now? Do you look to markets like Saudi Arabia, for example, which is becoming a big emerging market with Vision 2030 on the horizon?

I’m going to be a little bit arrogant and say it’s obvious that we should regionalise and expand to places like Saudi Arabia. It’s also obvious that we should have satellite offices in Geneva, London, and Moscow—there are very few places in the world where we’re legally and commercially supported to do that right now. Virtuzone partners with FDI (Foreign Direct Investment) entities here, whose job is to bring investment into these regions.

But my ambition goes beyond that. For 15 years, Virtuzone has been trying to solve our customers’ pain points and our own. We’re a business where process is incredibly important. From the beginning, we’ve had to be more efficient to compete against government entities.

We want to create a bundle of products that our customers need. For example, we had a process that used to take 48 hours to prepare an invoice, send it, and provide a payment link. Now, through automation, we can do it in 3 minutes. This eliminates human error and gives customers more control, infinitely faster. That’s just for my own company, but why can’t we offer that to 6,000 of our customers tomorrow? These small companies typically don’t have access to advanced solutions like Salesforce or Zoho.

I see our role as enabling the world to set up in the UAE and providing a suite of services that increase their likelihood of success. Dubai’s entrepreneurial environment and our focus on efficiency and automation create a unique opportunity for businesses to thrive.