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July 30, 2019

The Advantages of Starting a Business in Dubai

The main benefits of setting up a business in Dubai are related to a good business environment and economy, a tax regime that is advantageous for investors as well as a generally simple procedure for opening a company. The United Arab Emirates (UAE), of which Dubai is a part, includes several free zones – special economic zones – some of them being in Dubai emirate. As the largest and the most populated city of UAE, Dubai attracts a wide range of investors and foreign employees and it is a popular tourist destination in the region (thus allowing for different, tourism-related business opportunities, such as a yacht rental company in Dubai ). We explore some of the advantages related to opening a business here as well as highlight the general requirements.

Favorable foreign investment policies

Dubai is one of the seven Emirates of the UAE, and it has shown an impressive development following the oil discovery in the late 1960s. The favorable policy towards foreign investors and the friendly and welcoming regime for expats have been at the core of its development, along with a focus on high-quality infrastructure as well as the implementation of a favorable taxation regime.

Investors who start a business in Dubai can enjoy full foreign ownership in one of the many free zones. The city ranks well at the ease of doing business section, as per the World Bank Report. In 2019, it scored well in categories such as paying taxes, getting electricity, registering property and dealing with construction permits, enforcing contracts, and protecting minority investors.

Dubai is stable both politically and socially, allowing for the development of a favorable business climate.

An attractive taxation regime

Foreign investors in Dubai, such as UK investors and many others, enjoy the favorable tax policy in Dubai. It is a notable feature and perhaps one of the region’s greatest advantages for starting a business. No tax applies for the majority of businesses, except for those involved in oil/gas exploration and production as well as some petrochemical companies and the foreign bank branches. For these companies, the tax is progressive up to 55% (for oil and gas companies) or 20% for branches of foreign banks. Other companies, such as services companies, are not subject to corporate income tax.

Dubai also offers incentives in the special free trade zones. The benefits here include 50-year tax holidays, no restriction on foreign ownership, capital and profit repatriation, and no import duties for goods delivered into the zone.

Apart from the local taxation policy, the UAE is part of many international agreements meant to encourage foreign trade and relationships.

Easy company formation procedures

Company formation is simplified in Dubai and the rest of the Emirates. Investors can choose between several business forms, such as the limited liability company, the private or public joint-stock company or the branch and representative office for foreign companies that want to expand on the market. The Department of Economic Development oversees the registration and the licensing of companies.

Apart from a Company Law that allows for a simplified company formation procedure, the UAE also implements a sound Intellectual Property Law.

Dubai’s strategic location, modern infrastructure, favorable business regulations, and ease of doing business attract investors from around the world.

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