Gamechangers: UAE Company Formation Specialist Virtuzone On 10 Years Of Supporting Entrepreneurs Virtuzone proudly declares it has been able to launch over 16,000 companies since 2009.
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It's not uncommon to hear entrepreneurs in the UAE talk about how they find the business set-up process in the country to be a cumbersome affair, and that's exactly the pain point that Neil Petch and Geoff Rapp were aiming to tackle when they founded Virtuzone in 2009. 10 years on, the enterprise, which today has George Hojeige at its helm as its CEO, has become one of the leading players in this particular domain in the UAE- in fact, I'm willing to bet that Virtuzone is the company that first comes to mind for most people in the country (and even outside it) who are looking for someone to help them launch their entrepreneurial ventures. After all, Virtuzone proudly declares it has been able to launch over 16,000 companies over the years- that number is an indicator of the kind of experience it boasts of, while also showcasing the amount of trust people have in the brand. So, how did Virtuzone get to where it is today?
That's a story that Petch (who's today the Chairman of Virtuzone), Rapp, and Hojeige tell me over the course of an afternoon at their office in Dubai's Souk Al Bahar as they celebrated the tenth anniversary of their enterprise. Virtuzone essentially came into being as an idea that Rapp had when he was working for The Executive Office of Dubai (i.e. the office of H.H. Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai) in the early 2000s.
At the time, Dubai was in the throes of making itself out to be a hub for business in the MENA region, be it with its real estate endeavors, or with its launch of free zones like Dubai Media City, and while larger enterprises were being catered to with these efforts, Rapp had noticed that smaller players weren't getting as much attention. Rapp saw that the entrepreneurs behind these companies (which were often in the very early stages of their business trajectories) didn't actually need office spaces or desks for them to run their enterprises– after all, they could work from practically anywhere, but they did need the basic aspects of running a business here, which include things like the requisite legal structures, trade licenses, bank accounts, etc.
Rapp thus saw a need for "a virtual free zone" that catered to these startup businesses, and while his idea was appreciated by his employers at the time, it was shelved on account of the other undertakings Dubai had put higher on its priority list back then. Now, that idea would have stayed on the backburner had it not been for Rapp meeting with his long-time friend Petch a few years later, who agreed that there was potential in the concept- and that it was an untapped opportunity. Petch took the idea (after a fair bit of repackaging and rebranding) to the Emirate of Fujairah's Creative City Free Zone, and that entity gave him the green signal to run with it, and with the aim to simplify the process for entrepreneurs and businesses to set up shop in the UAE, Virtuzone came into being in July 2009.
Note the year here- this was the time when the world at large was in the middle of a global financial crisis, and yes, the UAE was being affected by it too. "We actually officially launched the business in the teeth of the first crash that Dubai had seen," Petch recalls. "We didn't realize it then, but eventually that was a huge opportunity for us. Timing is everything in business," Rapp adds. "So, the fact that it happened right at that time of the global financial crisis, literally, from 2008 into 2009, it was great timing, because a lot of people were losing their jobs, they didn't want to leave Dubai, and they were looking for other opportunities. So that was certainly a factor that actually played in our favor."
And when these entrepreneurs needed help with setting up their enterprises, Virtuzone found itself perfectly placed to cater to their needs. And while the startup sector may haven't been the most appealing of industries to be a part of in those days, Petch and Rapp were able to make their company an indispensable partner to all of these newly launched businesses. "We came up with the name Virtuzone, because, obviously, we were representing a free zone, and we wanted something that was virtuous, that enabled people to set up for a limited amount of money," Petch says.
"We realized we wanted to target startups- no one else was after that sector, as the other players were much keener on larger companies who had a lot of people, or a great big office." Of course, this strategy proved to be a hit for Virtuzone in the long run, as these young businesses it supported and enabled ended up being the ones that allowed for Dubai and the UAE to recover from the effects of the recession in the long run. The formula, according to Petch, was that Virtuzone would grow alongside their clientele- and for that to happen, their customers needed to succeed. "So, very rapidly, in the first year of operation, we realized we need to provide them with a supportive ecosystem," Petch continues. "That meant helping them get bank accounts. That meant helping them have accounting services, which sounds very obvious, but if you're a one-person or two-person operation, then you can't afford an accounts person… So, providing a supportive environment became an absolute tenet of our business."
Virtuzone thus became more than just a company to go to when you needed a trade license- it started offering a host of services that helped its clientele with everything from setting up a bank account, to funds to enable startups to get off the ground without a huge initial investment. "One of the roles that Virtuzone has provided, which we did before anyone else, was being a bridging point," Petch says. "So, if you set your company up, we would finance you, we would enable you to pay for the costs of setting up your company over the course of the year, which meant, suddenly, that the ability to set a company up [became easier]."
It didn't stop at financing though- today, Virtuzone prides itself on being a one-stop-shop for anyone wanting to set up a business in the UAE, with the roster of services it provides for startups including everything from design to IT. It has also partnered with leading organizations from across sectors over the years to add to its support of entrepreneurs. "Now, if you look at our partners, and if you compare us to anyone else out there, we're partners with Etisalat, we're partners with KPMG, we're partners with Aramex, we're partners with Dubai FDI, we're partners with the Chamber of Commerce, we sit on the panel of ease of banking in the UAE," Petch notes.
"You can tell a lot about a man by his friends, and a lot about a company by its partners. Compare us to anyone else; they don't have partners." At the same time, for all of the services and support it provided its clientele, Virtuzone was also aided in its growth by the fact that it was one of the first organizations to build a sort of brand around itself as a company formation specialist in the UAE.
Rapp was the one leading the charge on this front, with his expertise from a career in marketing at companies like Emirates and Bowing certainly aiding Virtuzone in its outreach efforts. "Back then, people didn't look at company formation from a branding/marketing perspective," Rapp recalls. "We were the first to really launch a brand, build a brand, and communicate to people at an emotional level." On the marketing front, it's safe to say that Virtuzone is continuing to push the bar when it comes to the creative ways in which it makes sure it's always on top of mind when people talk about company formation in the UAE. Be it by being one of the first players in the market at large to do content marketing right, or by its recent launch of a radio show (Starting Up on Dubai Eye) for entrepreneurs, Virtuzone has always managed to go above and beyond other players in the industry in this domain.
"From a marketing perspective, we are seen as the reference," says Hojeige, crediting Petch and Rapp for choosing to invest in this particular function at Virtuzone. "One of the biggest mistakes entrepreneurs do is that they don't invest in marketing when they start. So, you can have the best team in the world, you can have the best product in the world, but if you're not marketing, you're not going to sell anything. And if you don't sell, you're not going to succeed as a business."
"So, the guys have always had the guts and the vision to actually invest heavily in marketing. We still, I believe, invest a lot in marketing, a lot more than your typical SME would, as a percentage of its revenue or turnover. And that's paid up- we're in a pull business; we're not in a push business… What we need to do is we need to go pull as many of those people that want to start companies, and pull them to our site."
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Hojeige, whose career so far has seen him lead sales and business development at various organizations as well as entrepreneurial pursuits of his own, joined the Virtuzone team only recently, but having been a long-time friend of Petch and Rapp, he's been privy to the development and growth of the company as well. In fact, Hojeige recalls how he and others would joke with Petch and Rapp on how, in the early days of Virtuzone, they expected their company to be shut down by the authorities, as their offering was essentially a quasi-government function.
Of course, it's a testament to the Virtuzone's team's hard work and leadership that this didn't end up happening, and while the company has had a fair number of challenges thrown in its path, it persevered through all of them, and today, it offers its clients support with starting up in any of the UAE's 52 free zones or the mainland, as well as an assortment of other offerings. But despite the success that Virtuzone has seen, Petch, Rapp, and Hojeige are all in agreement that the company cannot sit on its laurels, and instead has to continue to be pushing the envelope for it to remain ahead of the curve. "When we started, it was all about how many licenses we can sell," Petch says.
"And we realized that we need to get the processes right [to do this properly]. We now have thousands of customers, and even if a small percentage of those customers are not happy, then you are going to hear about it on social media. So, we need to make sure our customer experience is absolutely at the top of its game." Indeed, this focus on their clients is absolutely critical to their business, the trio say- that's essentially why Virtuzone takes charge of all of the different processes relating to the company set-up procedure, as then they can make sure all of what is being done for the customer is done at a very high standard, as well as in an extremely efficient, effective manner, at a very competitive price point.
It's thanks to efforts like these that Virtuzone can proudly declare that almost 90% of its clients renew their licenses with it on a yearly basis, with its customers themselves becoming ambassadors of the brand to other new, prospective clients. Petch's glee is palpable as he talks about the startups he and his team have helped get off the ground over the years, with many of them having grown right alongside Virtuzone to greater heights of success. "One of the most wonderful things about working at Virtuzone is that we're setting up over 300 companies a month, and people are coming in here with their dreams, and we're helping them turn it into a reality," Petch says.
While Petch, Rapp, and Hojiege acknowledge that there are other players in the market today that work in the same space as Virtuzone, they are adamant that their company stands miles ahead of the others, and that they are often looked on as a role model even by their competitors. Copycats could be seen as a problem- but the Virtuzone team don't seem to be too concerned about that. "Whilst some people have been playing catch up and looking at what we were doing previously, we're now looking at how we can improve the customer experience, how we can improve the amount of time that they stay with us," Petch explains.
"If they continue simply to copy us, yes, it's going to cost them less to do it, but they are going to get into a lazy mentality of not innovating. And so, we're going to continue to stay ahead, continue to look for the next thing, which of course is going to benefit the customer at the end of the day. That's the way that we do our business."
As for the road ahead, Petch, Rapp, and Hojeige are clear that they are going to continue innovating at Virtuzone and what they do for their clientele in the UAE, but they are also hard at work on building up the nation's brand outside of its borders as well, and thereby bring more businesses to set up here. "I think the opportunity for the UAE, and I really would want to drive this, is there's a massive trend happening in the world at the moment- the offshore markets, in which there are hundreds of thousands of companies, are under pressure," Petch says.
According to him, given these global dynamics that are turning away from offshore centers (think places like the British Virgin Islands, or Panama), the UAE is extremely well placed to be seen as an alternative to these places, by virtue of it being a much more conducive place -be it with its legal structures, or its political stability, or simply its geographic location- to do business in.
On the homefront though, Petch, Rapp, and Hojeige are united in the company's premise to always keep their customer first, and continue to develop their offerings to assist entrepreneurs in building up their respective businesses in the UAE. And as for what makes Virtuzone stand apart from the rest, Hojeige replies: "Experience. Nothing beats experience. You know, we are the longest running in the market. We are the most trusted by both jurisdictions and by clients. So, I think trust is the main issue here. And I realize this more and more, and I realize it more every day, starting a business, for some people, is literally putting everything they have into that business."
"And trust, I think more than price, more than being Western, or being Indian, or being Arab, or being whatever it is, trust in the person that's doing it for you, I think, would beat any other asset, in my opinion. And that's something that we thankfully have from our clientele, and it goes from mouth to ear from there. So, trust and experience, I think, is our main driver, and our main advantage on everybody else. We can compete on price any day. That's easy. The price part is easy, because we buy better than anybody else. But I think building trust and building confidence is something that has taken 10 years to build, and you can't build that overnight."