From sand dunes to skyline, Dubai’s transformation over a few decades has been extraordinary. Now, the city is entering a new phase, a tech-dominant, AI-led paradigm where business processes scale faster, leaner, and more instantly accessible. AI integration spans both private-sector operations and government platforms, increasingly shaping enterprise-level decision-making, especially for business owners.
However, many entrepreneurs make a critical assumption: that AI is always correct. What’s often overlooked is that AI is pattern-based, not wisdom-based. It lacks contextual judgment and struggles with nuance unless specifically trained. Experiential insight remains out of reach, at least for the next few years.
Take consultancy: AI can generate proposals, estimate licensing fees, compare jurisdictions, or project delivery schedules. But it won’t ask:
- Are your shareholders based in the UAE?
- Might your activity require external approvals or tailored insurance?
- Do you want to scale aggressively or remain lean?
- What banking relationships and compliance structures do you need?
These are instinctive questions for seasoned consultants familiar with the UAE’s regulatory terrain. AI, for now, lacks this intuitive intelligence.
Consider the case of one of our clients who used a global AI-powered assistant for company formation in the UAE. The process was fast, minimal input generated immediate recommendations, specifically a UAE Freezone known for optimized costs and quick setup. But two months later, the client was unable to open a bank account because:
- Licensed activities spanned unrelated categories,
- There was insufficient substance and documentation,
- The bank categorized the structure as high-risk and denied the account.
The result? Double the cost, first for the automated setup, then again for restructuring through professional advisory.
Why did this happen? The AI optimized a solution based on narrow inputs. It didn’t account for essential factors such as:
- Client nationality and associated risk profile
- Jurisdictional complexity of future contracts
- Banking and compliance red flags
- VAT registration and Economic Substance Regulation (ESR) triggers
- Double taxation treaty implications
These aren’t edge cases, they’re standard filters any experienced advisor would apply. Yet most AI systems can’t catch them unless explicitly prompted.
Let’s be clear: AI is a powerful asset when paired with human oversight. But strategic decisions, particularly in complex and fast-evolving jurisdictions like the UAE, still require contextual interpretation and expert judgment.
Dubai’s growth velocity is real. AI’s automation benefits are clear. But early missteps can be costly to undo. If you’re launching or scaling in the UAE, use AI as a tool, not a decision-maker. Strategic guidance from experts remains irreplaceable.
