A feasibility study is a pre-investment review that tests whether an idea can work in real market conditions. Unlike a business plan, it asks whether the idea is worth building at all.
Why Dubai needs local thinking
Demand varies by area, and setup choices differ by sector. Rent, salaries, visas, VAT and corporate tax should all be tested early rather than assumed.
When you need one
- Costly, risky or financed projects
- Expansions and acquisitions
- Small, low-cost setups may not need one
What it should include
1. Executive summary: the investment, returns, risks and recommendation. 2. Business concept and scope: the activity, customers, location, ownership, revenue model and capital. 3. Market study: size, demand drivers, price sensitivity and seasonality. 4. Competitor analysis: rivals' pricing, positioning, reviews and online visibility. 5. Legal, licensing and regulatory requirements: the setup route, approvals, visas and import and export rules. 6. Operational feasibility: staffing, suppliers, equipment and daily costs. 7. Financial feasibility: setup costs, forecasts, cash flow, break-even, payback and return on investment. 8. Tax and compliance review: corporate tax at 0% up to AED 375,000 and 9% above, and VAT at 5%. 9. Risk analysis: each risk paired with a mitigation, such as a pilot launch. 10. Sensitivity analysis: scenarios such as 20% lower sales or delayed collections. 11. Final recommendation: proceed, change, delay, reduce the investment, pilot or stop.
Feasibility study or business plan?
A feasibility study comes before major investment and ends in a go, change, delay or stop decision. A business plan follows approval and maps the execution.
How long it takes
One to two weeks for a simple study with the documents ready. Complex projects take longer.
What information is needed
The business idea, target customers, location, investment amount, pricing, staffing plan and supplier or rent estimates.
What it costs
The fee depends on the scope, the industry, the number of locations, the depth of research and the report format. Very cheap reports often contain generic data.
How to choose a consultant
Check their industry experience, whether they explain their assumptions and whether they test risk and sensitivity.
Common mistakes
Assuming demand, underestimating working capital and ignoring cash flow.
Example: a restaurant
Rent, food cost and break-even may show that the restaurant is viable only if rent stays within a set range. A good study tells you that number before you sign the lease.
FAQs
- Can it support bank finance? Yes, by showing your funding needs and repayment ability.
- Does it include tax? Not always, so ask, since VAT and corporate tax affect profit.
We prepare feasibility studies and financial models. See our business setup service and accounting service.
Key takeaways
- A feasibility study tests whether the idea is worth building before you invest.
- It should cover market, competitors, legal, operations, finance, tax, risk and sensitivity.
- Ask whether tax is included.
Frequently asked questions
Who needs a feasibility study?
Owners and investors before starting, expanding or buying a business.
Can it support a bank loan?
Yes, by showing the funding needed and the ability to repay.
How long does it take?
One to two weeks for a simple study.
Talk to a chartered accountant
Questions about your own situation? Reach us directly and we will reply with clear next steps.
This article is general information and not advice for your specific circumstances. Rules and thresholds change, so confirm the current position before you act.
