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The advantages of a business set up in Dubai include strategic location, tax benefits, world-class infrastructure, easy setup, 100% repatriation profits, and so on. Along with this businesses that operate in Dubai have a unique opportunity to reach a huge customer base. Being located in the heart of the UAE, which has direct connections to over 200 cities globally, with 66% of the world’s population able to access it within 8 hours, according to a report from the UAE Ministry of Economy makes Dubai a lucrative option for investors. For instance, In 2023 a total of 67,222 new companies joined Dubai Chambers, which is a 20% increase compared to 2022, according to reports from Dubai Chambers.
Despite the competitive business environment, Dubai offers a highly supportive tax structure. Businesses in free zones and offshore areas can benefit from 0% corporate (on qualified income) and income tax, while mainland businesses pay a 9% tax rate only on profits exceeding 375,000 AED.
Along with this, its world-class infrastructure, including ports, airports, and advanced road networks, gives a double boost to business growth. An independent scholar of geography, Jamal al-Mehairi, highlights in his research that Dubai’s focus on infrastructure development has led to significant business growth.
Dubai’s strong economy also gives confidence to investors and ensures that they are in a safe zone. It recorded a GDP growth of 3.3% y/y in the 2nd quarter, an acceleration from 3.2% in Q1 of 2024 asper the report of Emirates NBD. along with asset protection it allows repatriation of capital and profits to further support the investors.
The government provides extra perks to the investors in the shape of visa flexibility, standard living, and a business friendly environment. The quality of life can be inferred from its 4th rank globally for quality of life among 195 cities, according to a survey by Numbeo, the largest cost-of-living and quality-of-life database.
However, with all these business-supporting drivers, Dubai also presents challenges such as high operational costs and rental prices for commercial spaces, which are among the highest in the region, according to the Dubai Economic Department’s 2023 report.
What are the Advantages of a Business Set Up in Dubai?
As a world’s leading business hub, Dubai offers countless advantages for those who set up business there. Our experts after extensive research have shortlisted 11 benefits of business set up in dubai. These includes
- Strategic Geographical location
- Minimal taxation
- Repatriation of capital and profits
- Easy business setup
- Foreign ownership
- Economic stability
- World-class infrastructure
- No currency restrictions
- Residency and Visa flexibility
- Free Trade Zones
- High Quality life
As an investor, you’ll find many other benefits too, but these are the most prominent. It’s important to remember that each business has its own set of opportunities, and it’s possible that what is beneficial for one may not be beneficial for others. In the below section we have discussed some of the benefits in detail.
Strategic Location
Dubai’s location has always been important when it comes to business planning. Being at the crossroads of major international trade routes, it attracts investors from India, China, Europe, and Africa. Its proximity facilitates its role as a gateway for trade, particularly with emerging markets in the Middle East, Asia, and Africa, according to a 2021 report by the World Economic Forum.
The location of dubai is important in different ways; 3 of these includes
- Relationships with the huge business world
- Access to major shipping routes which helps in determining how much a product or service could cost
- Maximum tax benefits if your business is located in free zone
Minimal Taxation
Dubai business taxation applies a 9% corporate tax rate on taxable business income exceeding AED 375,000, as per the UAE’s Federal Corporate Tax Law introduced in 2023, with exemptions forSMEs and free zone companies. Also Dubai mainland imposes only a 5% customs duty, while free zones may offer 0% customs duty on imports and exports.
This helps investors to operate businesses without much greater tax complications. Also they feel like they are not losing anything if they start in a freezone which empower them to take the initiative.
Repatriation of capital and profits
Dubai’s business environment allows investors to send profits or financial assets back to their home countries. Specifically, for this purpose, the government built multiple free zones to help investors retain 100% of their profits without any tax deductions. This encourages investors to increase foreign direct investment (FDI), as reported by the University of Dubai’s Institute of Business Administration.
Easy business setup
Setting up a business in Dubai is much easier and faster. This takes 1-2 weeks for a free zone, 1-4 weeks for a mainland company, and 2-5 weeks for an offshore company. The business processes have become even faster and seamless with the popular move of launching the Dubai Unified License project in December 2023.
The Dubai government not only supports investors by providing seamless business registration processes but also by providing a business-friendly environment to operate in. This has significantly contributed to the UAE’s overall ranking among the top 20 globally for ease of doing business.
Foreign ownership
Mainly, Dubai free zones and offshore jurisdictions fully allow non-citizen individuals to own businesses completely. However, when it comes to mainland businesses, foreign ownership is restricted to specific commercial sectors allowed under Dubai commercial law. The number of allowed businesses with 100% ownership is approximately 1000.
The government and various freezone and offshore authorities help investors in achieving full ownership. For instance, Dubai issued Resolution No. 25 of 2021 to expand the areas where foreigners can own real property.
Economic stability
Just as economic stability is crucial for maintaining business power, it is even more crucial for gaining the trust of global investors. And it’s pretty much clear that business growth goes hand in hand with economic stability. And this is clear from Dubai’s emergence as a global business hub. It ranked 1st according to a study conducted by the INSEAD Alumni Association France, which surveyed 835 INSEAD alumni with international work experience. The study considered 30 criteria related to both professional and private life, one of which was economic dynamism.
Overall, the UAE ranked 7th among 67 countries in the IMD World Competitiveness Ranking 2024, conducted by the IMD World Competitiveness Centre. The ranking is based on an analysis of economic performance, government efficiency, business efficiency, and infrastructure. This shows the government’s keen focus on business policies.
World-class infrastructure
Dubai is a premier business city, offering world-class infrastructure and modern techniques to protect investors’ financial and personal well-being. Only in 2020 did Dubai set $42.5 billion worth of infrastructure developments in construction, and most of this was to support the staging of Expo 2020 Dubai. Overall, the UAE ranked 4th this year in the World Economic Forum’s (WEF) competitiveness report, with the infrastructure quality of Dubai and Abu Dhabi playing a key role.
No currency restrictions
Dubai supports a seamless, convertible currency system. Investors face no restrictions when transferring currency due to the friendly exchange policy. They can use this for all purposes without any restrictions to support cross-border businesses. This open financial environment positions Dubai as a favorable location for global business operations.
Residency and Visa flexibility
Dubai allows visitors to stay for up to 60 days with most visas, except for the 96-hour and 48-hour visas, which are valid for 30 days, according to the official emirate portal. This supports both short-term and mid-term stays. Additionally, Dubai offers long-term visas, including the Golden Visa (5 or 10 years), Investor Visa (2 or 5 years), Freelance Visa (2 or 3 years), Retirement Visa (2 or 5 years), and more.
Free Trade Zones
Dubai Free Trade Zones are income tax-free areas designed to attract foreign investors. There are about 27 free zones in Dubai, including the two most famous: Dubai Airport Freezone and Jebel Ali Free Zone.Dubai’s free zones. Business setup in these zones are much easier For example, in DAFZA you can set up a business in just 1-2 weeks. Along with this in these zones, foreign investors are allowed to own business 100% without any need of a local sponsor.
High Quality life
Dubai promotes a modern and balanced quality of life through its strong financial conditions and modern infrastructure. It ranked as one of the top cities in the Global Liveability Index 2024: According to the Economist Intelligence Unit’s Global Liveability Index. The government provides greater job opportunities and better health services to create a stress-free living environment for residents. They launched the Dubai Quality of Life Strategy 2033, consisting of over 200 projects to improve residents’ well-being.
What are the Benefits of Business Set Up in Dubai for Foreign Investors?
There are countless benefits of setting up a business in Dubai for foreign investors. Some of the most prominent are listed below:
- Dubai allows 100% foreign ownership in free zones, offshore areas, and certain sectors on the mainland.
- Dubai’s strategic location provides access to global markets.
- There is 0% corporate tax in free zones and offshore areas (on qualified income), while it is only 9% on the mainland.
- Foreign investors can repatriate 100% of their profits to their home countries without any deductions.
What are the Benefits of Business Set Up in Dubai for freelancers?
The benefits of setting up a business in Dubai for freelancers include 100% foreign ownership, networking opportunities, a flexible work environment, and multiple visa options. Not only that, but freelancers can also enjoy a virtual workplace in Dubai to run their business from their homeland. Some noteworthy benefits are provided below:
- Government Support for Entrepreneurship
- Access to High-Speed Internet
- Strong Intellectual Property Protection
- Flexible Work Environment
What are the Benefits of Business Set Up in Dubai for Foreign Investors?
Small businesses in Dubai benefit from an investor-friendly tax structure, modern infrastructure, and easy access to skilled employees and workers. Along with this the fuel driving the small businesses growth in dubai is the ease of doing business. The 5 main benefits for small business owners includes.
- Small businesses take advantage of both freezone and mainland, as the corporate tax applies only to profits exceeding 375,000 AED.
- With the increased shift to online presence, small setups are receiving an excellent response due to the millions of visitors from around the globe coming to Dubai.
- Flexible office setup options directly support small businesses by reducing their setup and maintenance costs.
- The advancement of technology in Dubai helps small businesses run operations smoothly. For example, transitioning to Dubai is now easier than ever before.
What are the disadvantages of Business Set Up in Dubai?
Despite the valuable facilities available in Dubai for businesses, there are some challenges that arise if one does not follow a systematic approach. For example, businesses face difficulties with operational permissions, especially when it comes to trading between free zones and the mainland.
Similarly hiring a skilled workforce in dubai can necessitate increased investment, potentially leading to higher capital needs for businesses. Some business sectors are subject to rigorous legal requirements that can be challenging for newcomers. However, you can avoid these issues by following the legal guidelines provided by DED and specific business authorities.
