Dubai, along with the UAE as a whole, boasts a vibrant economy encompassing a wide array of thriving industries such as real estate, finance, tourism, technology, logistics, and transportation, among others.
Renowned for its cutting-edge infrastructure and exceptional transportation network, Dubai has become a magnet for freelancers, startups, SMEs, and multinational corporations, offering them a host of enticing opportunities.
The following are the compelling factors driving entrepreneurs to relocate to Dubai in significant numbers.
1. Corporate Ecosystem
Due to the UAE’s advanced infrastructure, favorable regulatory environment, ample funding opportunities, access to regional markets, and a diverse pool of talented individuals, Dubai and Abu Dhabi have emerged as prime choices for international entrepreneurs. Furthermore, the recent policy changes in the UAE, such as permitting foreign investors to have full ownership of companies and offering long-term residency permits to tech startup entrepreneurs, have significantly propelled the growth of the country’s startup ecosystem.
2. Lowest Tax Rates
Dubai’s attractive tax environment, characterized by some of the lowest tax rates globally, serves as a key driving force behind the influx of entrepreneurs to this contemporary city-state. Entrepreneurs seeking to optimize their earnings and minimize tax burdens consider Dubai a prime destination.
The Ministry of Finance in the United Arab Emirates (UAE) has established a tax rate of 9% for taxable income exceeding 375,000 UAE dirhams (approximately $102,000), while maintaining a zero tax rate for taxable income up to 375,000. This ensures that small companies and startups continue to enjoy the advantage of being exempt from taxes. Moreover, it appears that businesses operating in free zones will also retain the benefit of tax exemption as long as they fulfill all the required criteria.
3. Easy and Hassle-free Business Setup
Starting in 2021, the process of establishing and operating a business in Dubai has become significantly more convenient, primarily due to the elimination of the requirement for foreign investors to have Emirati partners. This policy change grants foreigners the privilege of complete ownership of their businesses in Dubai.
Previously, conducting business in the UAE mandated finding an Emirati national who would hold a 51% ownership stake in the company. This arrangement was an inherent aspect of business operations in the country.
When considering relocation to Dubai for business purposes, it is advisable to explore the free zones, also known as free trade zones. These areas offer various benefits, including exemption from most forms of taxation, making them an attractive choice for establishing a registered business with simplified procedures.
4. Strategies to Boost Foreign Acquisitions
In 2023, the Dubai Foreign Direct Investment (FDI) authority remains committed to continually enhancing overseas acquisitions. As per reports, the Dubai FDI has been actively promoting acquisition opportunities and strengthening its partnerships with major global cities. Notably, the alluring foreign acquisition endeavors contributed AED 17.76 billion to Dubai’s economy in the first half of 2018, with similar schemes planned for 2023. This presents an excellent opportunity for entrepreneurs to leverage these prospects and reap their associated benefits.