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Why Do Business In Dubai?
The UAE has experienced a remarkable shift through time to develop into a hub for numerous industries. The fastest economic growth rate in the world is in Dubai. Dubai is also one of the most populated cities among the seven Emirates of the United Arab Emirates, with a booming economy, business-friendly taxes, few trade restrictions, and political stability.
To the advantage of both investors and the nation, the Dubai government has also created flexible policies for carrying out business abroad conveniently and securely. Investors flock to the city as a result to launch startups, sister franchises, and global enterprises.
The decision of the Dubai government to permit foreign investors to establish corporations in any of the Emirates has proven fruitful and advantageous for the nation.
Benefits of Expanding to Dubai
- A world-class financial hub
- A zero-tax regime, meaning no personal or corporate income taxes
Access to more than 40+ business freezones - Safe and robust governance
- An educated supply of human capital with diverse professional experience hailing from all corners of the globe.
- No capital repatriation restrictions
- No share capital requirements
- No physical office requirements
- Lower set-up costs compared to other onshore jurisdictions
- Excellent quality of life
- State-of-the-art technology & high-speed internet facilities
Some of these points will be explained below
• Low Tax Rates: One of the main attractions of doing business in Dubai is the low tax rates that apply to most sectors and industries. Dubai does not impose any income tax, corporate tax, capital gains tax, inheritance tax or property tax on businesses registered in the city. The only tax that applies is a 5% value-added tax (VAT) on certain goods and services, which is one of the lowest in the world. This means that businesses can enjoy higher profits and lower costs by operating in Dubai.
• Booming Economy: Dubai has a diversified and resilient economy that is driven by trade, tourism, finance, logistics, technology and renewable energy. The city has a high GDP growth rate and a stable political and economic environment. Dubai also hosts many global events and exhibitions that attract millions of visitors and investors every year, such as the Expo 2020, the Dubai International Film Festival and the GITEX Technology Week. These events create opportunities for businesses to showcase their products and services, network with potential partners and customers, and access new markets.
• Connectivity and Exposure: Dubai has a world-class infrastructure and technology that facilitate business operations and communication. The city has a modern transport system, including an international airport, a metro network, a tram system and a bus service. The city also has a high-speed internet connection, a digital government platform, a smart city initiative and a block chain strategy. These features enable businesses to connect with local and global audiences, access online services, leverage digital solutions and innovate with emerging technologies.
• Visa Advantages: Another benefit of registering a business in Dubai is the ease of obtaining visas for yourself, your employees and their families. Depending on the type and location of your business, you can get visas that are valid for up to three years and can be renewed easily. You can also apply for residency visas that allow you to live and work in Dubai without any restrictions. Additionally, you can benefit from visa-free travel to many countries as a UAE resident.
• Strategic Location: Dubai is strategically located between Europe, Asia and Africa, which makes it an ideal hub for global business. The city provides access to a large and growing market of over three billion people across these regions. The city also has strong trade relations with many countries and is part of several free trade agreements that facilitate cross-border transactions. By doing business in Dubai, you can tap into these markets and expand your reach.
• Secure Business Environment: Dubai is one of the safest cities in the world, with low crime rates and high social security. The city has a strict legal system that is based on Islamic law (Sharia), which protects the rights and interests of businesses and investors. The city also has an independent judicial system that ensures fair and transparent dispute resolution. Furthermore, the city has a stable currency that is pegged to the US dollar, which reduces the risk of exchange rate fluctuations.
Should I Invest in the Free Zone or the Main Land?
If you’re familiar with the business climates in Dubai, you will know there are three types available for investors: The free zone, mainland, and offshore.
Generally, Foreign investors can choose from two options when forming an entity in Dubai. They can establish a company in local Emirati territory, known as “mainland,” or they can set up in one of the many free economic zones. It is also possible to set up a business presence offshore, but this comes with several limitations.
There are 45 free zones operating right now in the UAE. Each free zone specializes in one or more commercial categories and only grants licenses to organizations with relevant experience in those fields. Each free zone has its own rules & regulations. One instance is the Dubai Media City, which only caters to media and creative businesses.
The free zone also allows enterprises to merge with similar companies in the same industry. Because a businessperson in a free zone has entire ownership of their organization, all revenues and capital are repatriated in full.
Why Mainland is the best option for Investors
- In Dubai, a Mainland Company is exempt from corporate tax.
- Mainland companies can trade with other mainland companies. They are able to conduct business in any part of the UAE or beyond. This distinguishes them from free zone businesses, as they are only allowed to operate within their designated free zone.
- In comparison to free zone businesses, mainland companies have more options for business activities. E.g., Companies in Dubai Media City must be involved in the media or industries closely related to it. For mainland businesses, however, there are no such restrictions, and they can access the wider UAE economy, which offers a wide range of opportunities.
- Mainland companies can choose any location in Dubai for their office. This feature allows them to not only trade with the local market but also to open multiple company branches, allowing them to establish a strong presence in the UAE.
- Mainland companies are allowed to work for the government, whereas free zone companies are not allowed to work for the government and are only allowed to do private commercial work.
- On a mainland license, there are no restrictions on the number of visas that can be obtained. However, the ability to obtain visas is contingent on the availability of office space. The more office space you have, the more visas you may be able to obtain.
- In Dubai, there are no currency restrictions for mainland business.
- Capital and profits can be repatriated in their entirety.
- The registration process for mainland businesses is straightforward. There is also no requirement for a yearly audit.
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Investing in Dubai: Finding the Right Opportunity for You
Dubai has emerged as a top destination for real estate investment, offering lucrative opportunities for investors around the world. Its booming economy, strategic location, and attractive investment policies make it an ideal place to invest in property. However, with so many options available, it can be confusing for investors to determine where to invest. To make informed investment decisions, it’s crucial to conduct thorough research and consider factors such as location, infrastructure, and market trends. With the help of an experienced real estate advisor, investors can identify the best investment opportunities that align with their investment goals and risk appetite.
But before you do all that, take a moment to check out our in depth guide on Business Opportunities in Dubai
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