Over recent years, Dubai’s government, which highly encourages innovation, has created several initiatives to attract foreign direct investment and inspire entrepreneurism. The Mohammed bin Rashid Fund, for example, offers two types of loans, depending on the amount of money needed, to help new SMEs get started. However, government aid is just one of a number of reasons why setting up a business in Dubai is a very beneficial move for foreigner investors.
Free trade zones
In recent years Dubai has introduced a number of free zones to increase foreign direct investment in the city. Companies registered within the free zones can have complete foreign ownership. Outside of the zones, foreign companies must have a local partner and can only enjoy a maximum of 49% ownership, so the zones are a huge advantage.
There is a huge amount of government support for such companies and the chance to operate within a highly diverse, multicultural business environment. However, there are certain limitations to the types of enterprises able to conduct their business in the zones, so it is important to check whether your company fits the criteria.
Dubai’s open market is one of the top trade policies to have incentivised trading companies to set up their businesses in the emirate. Statistics from the Dubai Economic Department reveal an 11% growth every year in total international trade, indicating rapid development and increasing foreign cooperation with Dubai. What’s more, the lack of import or export duties, exchange controls or trade barriers has made the market even more productive and even more attractive to foreign companies.
Dubai has quickly become a key location for businesses to enter the global market and create worldwide connections. Once an arid desert, it has rapidly transformed itself into a major metropolis with outstanding infrastructure in just a few short decades. It is an epicenter for business transactions around the world, connecting Asia, Africa and several parts of Europe.
Working in the UAE means that individuals and businesses do not have to pay any income tax. What’s more, corporate taxes in Dubai applies only to companies engaged in oil and gas production and/or the extraction of other natural resources (at an average of 55%), as well as to branches of foreign banks (at a rate of 20%). Companies operating in free trade zones pay no tax at all. This system is an enormous advantage for foreign enterprises and one that has already attracted many expats to the city.
Dubai is a comprehensive platform for knowledge-based and innovation-focused businesses. By combining sustainable business prospects and innovative industries, with high-tech infrastructure and favourable laws, the city has created an environment in which businesses can develop quickly and successfully. It is favourable towards sectors related to knowledge, education, science and research in order to create a complementing economic system and optimize diversified revenue streams for the growth of the economy.
If you are planning to make an investment or start a company in Dubai, speak to a consultant from Shuraa Business Setup about the various business opportunities in the emirate. Shuraa is a leading business setup service provider in Dubai, mentoring entrepreneurs and investors all over the UAE. So, if business setup or commercial investments look like a puzzle board – let Shuraa Business Setup assemble the pieces for you!