Business valuation in the UAE: what your company is actually worth

A UAE SME valuation is not an appraisal of what you built. It is an estimate of what someone else will pay for the future earnings of it, in cash, this year, in this market.

That framing matters because it explains almost every disagreement over price. You are pricing a decade of work and personal risk. The buyer is pricing next year's income and the risk that it does not arrive. Both of you are being rational. Only one of you is writing the cheque.

There is no public register of completed private sales in the UAE, so nobody can point you at a verifiable comparable the way an equity analyst can. Dubai DET publishes open licence data, and our own extract of it, snapshot dated December 2025 through July 2026, counts roughly 533,000 active licences in Dubai alone. What that data cannot tell you is what any of them changed hands for. Private sale prices in this market are not published. That is precisely why the number has to be built from your own figures and stress-tested three ways, rather than lifted from a comparable that does not exist.

The method below is the one used on every business we look at, whether we end up working on it or not. It has three steps and it takes about a page.

Seller's discretionary earnings is the total economic benefit one owner-operator takes out of a business in a year. For owner-operated businesses below roughly AED 15 million in revenue, it is the base every multiple attaches to.

What gets added back to reported profit

• One owner's salary and drawings. The buyer will either run the business themselves or hire a manager. Either way, the owner's own pay is not a cost of the business, it is a return from it. Only one owner's package comes back.
• Personal expenses run through the company. Vehicles and fuel, family phone lines, travel that was not for a client, school fees, personal insurance. Real, common, and legitimate to add back if it is documented.
• Family on payroll above the value of the role. If a relative draws AED 15,000 a month for work a AED 6,000 hire would do, the difference is an add-back. The market rate for the role stays as a cost.
• Genuine one-off costs. A legal case that has concluded, an office relocation, a bad debt from a client who disappeared, a write-off that will not repeat. One-off means one-off.
• Depreciation and amortization, and any owner-related interest. Non-cash charges and financing costs that will not follow the business to a new owner.

What does not get added back, whatever you have been told

• Salaries of staff the business genuinely needs. If the work still has to be done, the cost stays.
• Rent at a below-market rate you personally negotiated but cannot transfer. A buyer prices the rent they will actually pay.
• Costs described as one-off that have appeared in three consecutive years. At that point they are operating costs with an excuse attached.
• Revenue that was invoiced but never collected, and revenue that never touched a bank account.
• A second owner's full package, if two owners genuinely both work in the business. SDE assumes one operator.

Which year

The last full twelve months, reconciled to VAT filings and bank statements, is the working base. A weighted look back over three years matters when the trend is moving: a business growing 20 percent a year is priced differently from one that had one exceptional year and two ordinary ones. If your best year is the oldest of the three, expect the buyer to notice before you point it out.

Sector shifts the starting point too. Recurring-revenue facilities management with real contracts sits higher in the range than project-based work that has to be rewon every quarter. A garage with a twenty-year customer base and its own workshop lease sits higher than one that survives on walk-ins. None of this moves the range by whole multiples, though. If someone tells you your business is worth eight times SDE in this market, ask them who is funding it.

Check one: SDE times the multiple

The headline method. Normalized SDE multiplied across the defensible multiple range gives you a first bracket. This is the number most owners and most advisors stop at.

Check two: the buyer-yield test at 25 to 35 percent

A large share of UAE buyers are purchasing an income and, often, a residency anchor. They underwrite a cash return on the money they put in, typically 25 to 35 percent a year, before they will sign anything. Divide SDE by that yield and you get the price a yield-driven buyer can justify. Where this bracket overlaps the multiple bracket is where a fundable price sits. Where they disagree, the yield math usually wins the negotiation, because that is the actual money arriving from the largest pool of buyers in this market.

Check three: the asset floor

What would a buyer get if they bought the parts rather than the business: equipment at realistic written-down value, collectible receivables, usable stock, less bank debt and less the end-of-service gratuity owed to staff. For a healthy trading business the floor sits far below the earnings-based number and never binds. For a business with thin or falling SDE, the floor is the price, and finding that out early is worth more than any amount of optimism.

Read what the three checks did there. The multiple bracket alone would have supported an opening number as low as AED 2.4 million. The yield check says no yield-driven buyer needs to go that low, because at AED 2.4 million they would be underwriting a 50 percent cash return, which is not what this market clears at. The asset floor is a long way underneath and never comes into play. The overlap, AED 3.4 to 4.2 million, is the range worth defending, and the position inside it is decided by the factors in step two.

This is the most common single fact about sellers in this market, and it is not a criticism. Three things inflate the number:

1. The competitor headline. What the bigger firm down the road reportedly sold for is usually an asking price, a gross figure including property, or a number with an earn-out attached that never fully paid. Almost nobody quotes the terms.
2. The years invested. Ten or twenty years of personal risk is real value that you created. A buyer is not purchasing your last decade, only the earnings of the next few.
3. Replacement cost thinking. What it would cost to rebuild the relationships, the licence history and the reputation from zero feels like the price. It is not what a buyer pays, because they are buying the outcome, not the effort.

The reason to write the valuation down before anything is marketed is simple. A number you have defended out loud to family and friends is very hard to move six months later in front of a buyer. A number that was tested privately, in writing, with the arithmetic attached, is one you can hold or adjust on your own terms. There is a longer list of what this costs owners in practice in the seven mistakes UAE owners make when selling.

• Reduce owner dependence. Promote or hire someone who runs daily operations. Move customer relationships off your personal mobile and onto the company. This is the single largest lever on the multiple, and it takes the longest, so start here.
• Reconcile the books to your VAT filings. Every dirham of revenue a buyer cannot see in a VAT return and a bank statement is a dirham they will not pay a multiple on. Cleaning this up converts unpriced revenue into priced revenue.
• Convert repeat customers into signed contracts. A verbal annual arrangement and a signed annual contract deliver the same cash and a materially different multiple.
• Fix client concentration. If one client is 40 percent of revenue, adding two mid-sized accounts is worth more than adding one large one.
• Compute and start funding the end-of-service gratuity. It is owed either way. Discovered by a buyer in diligence it is a deduction plus a credibility problem. Disclosed and computed up front it is just a line item.
• Sort the lease. Renew early, and confirm in writing that it can transfer to a new owner. A short or non-transferable lease caps the multiple regardless of how well the business trades.
• Clean the balance sheet. Collect or write off ancient receivables, clear related-party loans, and remove personal assets sitting in the company.

Owners who do this arrive at their sale with a better number, a shorter process, and far fewer surprises in diligence. The mechanics of the sale itself are set out in how to sell a business in Dubai.

An indicative read does not need your accounts. It needs five lines and turns around in 48 to 72 hours.

• Sector and main activity, roughly what the business does
• Revenue band for the last full year
• Rough net profit, and anything obvious you personally run through the company
• Headcount, and whether there is a manager who could run it without you
• Why you are thinking about this now, and any timeline in your head

No company name is needed to get a range. If it moves to a written valuation, that works from source documents, VAT returns, bank statements and payroll records, because those are exactly what a buyer will test later. Everything shared is confidential from the first message, and fees for any written work are quoted in writing before any engagement begins. Full detail on what to send and what happens next.