Opening a Business in Dubai
9 things to know before opening a business in Dubai
Before opening your business in the financial capital of Dubai, there are nine things you should know that may influence your decision. The United Arab Emirates (UAE) is a global economic powerhouse with a diverse and thriving economy. Being a member of the World Trade Organization, the UAE plays a crucial role in international trade and commerce, making it an attractive destination for entrepreneurs and investors looking to set up a business. These things which are going to discuss are most vital for Opening a Business in Dubai.
1. Dubai Offers Tax Incentives for Incorporation
The government of the UAE provides tax exemptions on personal income, withholding tax, and corporate tax, allowing investors to enjoy doing business and living in the global city of Dubai. In other words, you get full profits, which you can reinvest to grow the business. Minimum taxes and a simplified tax structure ease various aspects of opening and running a business. However, You have to keep in mind while Opening a Business in Dubai. So, where you save on taxes, you can invest in improving business processes and workflow efficiency. That said, the right company structure and competitive business strategy can help you qualify for more tax benefits.
2. The Local Rules and Regulations are Business-Friendly
The UAE is consistently ranked as one of the best countries in the world for doing business, renowned for its strong legal structure. The rules that govern foreign investors are separate from those that govern labor, with criminal law being the only exception. The process of registering and opening a business in Dubai can be completed in less than a month, and in some emirates, company registration and licensing can be obtained within 24 hours.
3. Choose the right jurisdiction for your business
In the zonally-segregated UAE, you may find mainly three types of businesses – Mainland companies, Free Zone firms, and Offshore businesses. Depending on your business model, preferences, and budget, you can choose between mainland or free zone locations if you have no plans for offshore or virtual company formation. Most business persons opt for mainland company formation due to recent changes in the law that allow them to fully own their company without the need for an Emirati national and significant expense towards the business setup. When starting your company in Dubai, UAE, it is important to pick the right jurisdiction based on the location, business activity, and nature of the business.
4. Different Ownership Options are Available to Expats
In Dubai, you have the flexibility to choose between maintaining partial (up to 49%) ownership in all seven Emirates or achieving 100% ownership by opening a Free Zone company. This allows investors the opportunity to enter various developed sectors. If you opt for partial ownership, you will have a local (UAE national) partner, so it’s important to find a reliable partner for this option. Ownership regulations will also vary depending on the type of company and the location where you wish to incorporate your business.
5. Supportive Government
Thanks to strong policies, the UAE has created a benchmark for governance, making it one of the most secure countries to live and do business in the world. The visionary government of Dubai encourages all types of foreign investment. His Highness Mohammed bin Rashid Al Maktoum has spearheaded the economic transformation in Dubai, gearing the government towards providing various business opportunities to foreign investors from around the globe.
6. Choosing the Right Structure is a Key
Whether your business succeeds or fails will be defined by the structure you choose for business registration in Dubai. The Limited Liability Company (LLC) is one of the most common structures while registering a Free Zone company is becoming increasingly popular among foreign investors. Opting for a Free Zone company allows you to maintain 100% foreign ownership in renowned Free Zones such as IFZA, MEYDAN, DMCC and more. The choice of the business structure is a crucial decision that can significantly impact the success of your business in Dubai.
7. The Labor Market is Diverse and Highly Skilled
Thanks to the immigration and labor policies implemented by the government, Dubai has a large and diverse labor market. The city is home to professionals from more than 200 nationalities, providing businesses with access to a pool of highly educated, experienced, and motivated talent. However, it’s worth noting that the UAE is a high-income country, which means you can expect to pay a premium for top talent.
8. The Currency Exchange Rate is Favorable
The Currency Exchange Rate is Favorable. The UAE currency, the AED, has remained stable against major currencies in the world, including the USD, with currency rates largely unchanged since 1997. The exchange rates are favorable with most countries in the Arab World, Africa, Asia, and Europe. For nearly two decades, the currency has demonstrated relative stability.
The stability in the purchasing power of the AED and its strength against other currencies provide businesses in the UAE with leverage in global trade. Furthermore, the world-class banking industry in the UAE offers a competitive edge, enabling businesses to stay on top in their respective markets.
9. UAE Has a Bright Future
Dubai has one of the highest expat population growth rates in the world, with more than 80% of the population being expats. The city’s peaceful lifestyle, world-class facilities, and incredible tourist attractions make it a logical choice for relocation. Dubai is renowned for hosting major events, including the Expo 2020 Dubai, which creates numerous investment and job opportunities.
Expats living in Dubai can enjoy unmatched living standards and experience high return on investment on property, ranging between 10% and 15% per annum. The UAE has established global standards in education, offering prestigious institutions such as the University of Wollongong, American University of Dubai, and Manipal University. Overall, Dubai’s future is undeniably bright, making it an attractive destination for individuals looking for a prosperous and fulfilling life.
MARKEF can assist you in better understanding the local market and gearing up your business for growth and success. We provide comprehensive consultancy and support throughout the entire company formation process in Dubai, including services such as business and personal bank account opening, immigration support for you, your dependents, and employees, and much more.
With over 50 Free Zones, different corporate structures, and banking options to choose from, the decision-making process can be overwhelming. Our team is here to guide you and provide the expertise needed to navigate through these choices. Trust us to support you in establishing a successful business in Dubai while ensuring a smooth transition to your new life in this dynamic city.
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MARKEF is a leading Accounting Firm offering wide range of services including Accounting and Bookkeeping, Audit and Assurance, VAT and Corporate Tax, Business Consulting, Management Consulting, and Business Setup Services in Dubai and across United Arab Emirates.
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