Starting a company abroad might be a scary notion. When the foreign nation in issue is the UAE, however, it is everything but. The Emirates offers an exceptionally warm and helpful business climate.
That’s one of the numerous reasons thousands of firms debut in Dubai alone every year. In reality, in 2020, more than 40,000 new company licences were awarded in Dubai despite the epidemic.
With an expat community making up about 85 percent of the country’s population, many of these new firms are set up by overseas entrepreneurs.
If you’re contemplating adding to that number, here’s everything you need to know about establishing a business in Dubai – from the primary advantages, to picking a company name and applying for licences and visa services uae.
Benefits of start your company in Dubai
There are many of reasons why thousands of entrepreneurs across the globe migrate to the UAE and Dubai to conduct business. These include:
Low tax
The UAE still proudly touts 0% tax on both personal and business income. The only important tax to be aware of in the Emirates is Value Added Tax (VAT) – implemented in January 2018 – which sits at a flat rate of 5 percent .
Set up in a free zone and you’ll also benefit from 100 percent repatriation of capital and earnings, no currency limits, and 100 percent import and export tax exemption.
What does this imply for entrepreneurs?
Tax is a key outflow for most firms in different areas of the globe. When cashflow is tight in the early days of a business, it may be a major expenditure.
Not so in the UAE, where you’ll pay zero tax on both your personal and company income and also apply for Payroll Outsourcing dubai. This not only enhances the profitability of your operation, but it also provides your organisation considerably more liquidity, possibly enhancing your cashflow and providing you with more discretionary money to spend in your company.
Startup support
The Emirates is home to various financial schemes geared to stimulate company development. The AED 2bn Mohammed Bin Rashid Innovative Fund, for instance, helps fund innovation initiatives and gives professional advise and support to bring company ideas into reality. Many of the UAE’s free zones also offer startup incubators and venture capital forums targeted at assisting small firms expand and obtain finance.
Startup Support
The UAE government is also obligated, by law, to award at least 10 percent of government contracts to small firms every year. Meanwhile, Dubai recently outlined its ambitions to reduce payment processes for SMEs in an attempt to enhance liquidity and stimulate development.
What does this imply for entrepreneurs?
An ecosystem that is set up to assist companies flourish means you’re never short of possibilities whether you’re searching for guidance, mentoring or even investment.
And plainly, it is a system that works — SMEs account for 95 percent of the firm population in Dubai and contribute 40 percent to the Emirate’s GDP.
Vibrant economy
The Emirates is home to the second biggest economy in the Arab world, with a GDP of roughly AED 1.5 trillion (USD 421 billion), behind only Saudi Arabia.
In addition, it has a diverse economy where non-oil and gas industries make for 70 percent of its GDP. From multiple areas such as healthcare and hospitality, to technology, commerce and finance, the UAE has a developing economy that gives many attractive prospects for both budding entrepreneurs and organisations wishing to expand overseas.
This has caused the Index of Economic Freedom to commend the UAE economy for its “broad-based and dynamic growth… backed by continual efforts to enhance the business environment, stimulate investment, and encourage the formation of a more robust and varied private sector.”
What does this imply for entrepreneurs?
A broad and diversified economy gives a wide variety of options for entrepreneurs. A robust economy builds trust and stimulates investment – firms are pleased to invest in new products and the cycle of economic stimulation continues.
A healthy economy also tends to lead to increased pay. In the UAE, earnings climbed by 3.9 percent in 2019, resulting to a net positive gain in discretionary income – wonderful news if you’re selling directly to the customer.
Strategic location
Dubai’s position provides it the perfect base from which to trade with the huge markets of East and West. Its time zone coincides with that of several major commercial hubs and its two busy airports put one-third of the world’s population within a four-hour flight and two-thirds within eight hours.
Strategic Location
What does this imply for entrepreneurs when they start company in Dubai?
The UAE is the excellent environment to do international business. Its strategic position in the centre of the Middle East provides it a time zone that overlaps with the working day of most important business centres in Asia, Africa, Europe and the east coast of America.
The Emirates is best when you start your company in Dubai also home to two of the world’s busiest airports – Dubai International and Dubai World Central – providing direct passenger and cargo connections to most of Asia, Africa and Europe – and even as far away as the USA and Australia. If you’re wanting to import or export, the UAE is very well supplied by water, with Jebel Ali port among the world’s top ten busiest ports.
Ready to start your company in Dubai?
Here’s how to get things underway:
Choose an activity: Your selected activities might impact where you can set up, therefore this has to be determined ahead. The Dubai Department of Economic Development includes over 2,000 activities which your firm might fall under.
Choose free zone or mainland: If you opt to set up in a free zone, you’ll benefit from 100 percent company ownership, 100 percent repatriation of capital and profits, no currency restrictions, and 100 percent import and export tax exemption, but will need to work with a partner to trade locally in the UAE. Set business on the mainland and you may deal directly with the local market and worldwide, and take on government contracts. Additionally, new rule now enables 100 percent foreign firm ownership in the mainland for specific activities.
Choose a business name: You’ll need to comply to the UAE’s rigorous naming standards. A business creation professional can assist guarantee you fit the standards.
Apply for a licence: Whether you’re establishing up in a free zone or the mainland, you’ll normally just need a few common documents: completed application form, shareholder passport copies and so on.
Create a bank account: With your licence in hand, you are free to open a UAE corporate bank account. You may select from a number of foreign, local and Islamic banks headquartered here in the UAE.
Apply for your visa: The last stage in the company establishment procedure is immigration and visa processing. Again, a business creation professional can help you through this procedure for starting company in Dubai.
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