Starting a Business in UAE for Entrepreneurs
A significant number of multinational firms and foreign entrepreneurs are taking advantage of the UAE’s ease of company formation. Over the span of many decades, the United Arab Emirates has seen unprecedented growth as there are more opportunities for starting a business in UAE for entrepreneurs in 2022.
The nation’s political system is stable, there is a healthy flow of capital, its tax policies are business-friendly, and its trade barriers are minimal.
Dubai is the place to be if you want to be a successful businessperson. The United Arab Emirates (UAE) provides prospective business owners with business-friendly regulations, a tax-free environment, world-class infrastructure, access to the international community, and a robust support network with industry-specific small business tools to assist them in establishing their own businesses.
The cosmopolitan composition of Dubai’s population, of whom 85 percent are expatriates, is the city’s frosting on the cake. The government is putting significant effort to design and implement ways that will allow varied groups in Dubai to coexist harmoniously.
Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, has lately allocated $544 million to finance the enterprises of Dubai’s innovators and entrepreneurs. This ultimate guide will unveil why starting a business in UAE for entrepreneurs is a safe haven.
Benefits of Starting a Business in UAE for Entrepreneurs
Though starting a business in UAE may seem daunting at first, there are several advantages to doing so. From the ease of registering a company to the supportive business environment, here are some key reasons why entrepreneurs should consider starting their business in UAE.
1. Tax Benefits
The United Arab Emirates has limited tax rules, and VAT in the Dubai market has only been in place for the last two years. Individuals are not subject to taxation on their income.
With the exception of a value-added tax of 5% that must be paid when trading with the Mainland and the other GCC nations, free zones in the United Arab Emirates provide businesses with a totally tax-free environment. Businesses that operate inside a free zone instead of on the mainland are not required to pay customs duties and may bring home 100 percent of their earnings and initial investment.
2. Standard of Living
Since its inception, Dubai has grown into a major financial hub. After decades of development, Dubai has become one of the best places to live in the world, with a full complement of high-quality amenities and services available to locals.
Due to its low crime rate and high quality of life, the United Arab Emirates (UAE) is an attractive place to call home for many people. There is a wide variety of low-cost housing options available in the United Arab Emirates (UAE). Dubai’s government is always engaged in endeavors with the goal of making the city the happiest on Earth.
3. Investor-Friendly Space
Half of all Dubai-based businesses are startups, according to data compiled by the Dubai Statistics Centre. Cost-effective packages, world-class infrastructure, high quality of life, the chance to build up business models effortlessly, access to highly skilled mentors, seminars, events, and a helpful investment community are just some of the benefits that Dubai offers startups.
To facilitate the establishment and expansion of businesses, Dubai offers a wide variety of support services to investors. The local ecosystem for startups is supported by a variety of accelerators and incubators, including the Dubai Silicon Oasis and the Dubai Science Park.
4. Repatriation of Profits
Many countries impose regulations on the activities of international corporations and demand that they maintain a percentage of their profits and assets inside the boundaries of the country in which they are doing business.
However, Dubai does not have this need. All types of businesses operating on Dubai’s mainland and the city’s several free zones are permitted to repatriate all of their cash and profits. Standard foreign direct investment law permits the local partner to own 51% of the business share and the foreign business investment to own up to 49% of the business share.
If a company is established in the United Arab Emirates (UAE) in a certain manner, a foreign owner may be able to own 100% of the company.
5. Strategic Locations
The United Arab Emirates (UAE) has become a major trading hub for products moving between Asia and the Western Hemisphere. Its Location near the Arabian Gulf makes it a prime hub for trade. As a country, the United Arab Emirates (UAE) has a prime position between the continents of Europe, Asia, and Africa.
Furthermore, the country has easy access to Middle Eastern markets. The United Arab Emirates is a fantastic location for an import-export or trade company because of the country’s central location in the Middle East.
First, there are China and India, two countries with a wealth of untapped commercial potential and a ready supply of essential raw resources. The European Union lies just over the ocean from the United Arab Emirates and is a major commercial partner.
6. Incentives for Entrepreneurs and SMEs
The government of Dubai provides a number of amenities to major investors while simultaneously being welcoming to small and medium-sized firms. Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates and Ruler of Abu Dhabi, founded the Khalifa Fund for Enterprise Development in 2007.
The goal of the fund is to encourage local investment and entrepreneurship, as well as to nurture and expand small and medium-sized businesses inside the emirate.
To participate in the Government Procurement program managed by Dubai SME, all government agencies in Dubai must allocate at least 5% of their annual purchasing budget toward the purchase of goods and services from small and medium-sized businesses owned and operated by citizens of the United Arab Emirates.
This helps SMEs develop their capacities so they can bid successfully on government contracts and compete with larger enterprises.
7. Competing in Global Market
After obtaining a license from the Dubai Department of Economic Development, you will be permitted to operate in both domestic and international trade. This is pretty significant, especially considering that COVID-19 has made the world a more linked place. This will be of great assistance to businesses seeking to develop their worldwide brand awareness.
If you want to expand your company’s activities to other nations, a license from the Dubai Department of Economic Development will be necessary. This will allow you to access new markets, extend your presence in those regions, and eventually grow your business.
Best Free Zones for Entrepreneurs
In the United Arab Emirates (UAE) many free zones play an important part in the region’s overall economic development. There are just a few prominent Free Zones in the UAE that provide investors with reasonably priced firm licensing packages.
Following is the list of one of the best and the most profitable free zones in UAE:
- Sharjah Publishing City
- Sharjah Media City
- Umm Al Quwain (UAQ) Free Zone
- Meydan Free Zone
- Ras Al Khaimah Economic Zone
- Ajman Free Zone
- Jebel Ali Free Zone Authority (JAFZA)
- Dubai Multi Commodities Centre (DMCC)
- International Free Zone Authority (IFZA)
- Fujairah City Free Zone
- Dubai Media City
- Dubai Silicon Oasis
- Dubai South
- Dubai Studio City
- Dubai Healthcare City
- Dubai World Trade Centre
- Dubai Airport Free Zone
- Dubai Internet City
Top 5 Industries for Starting a Business in UAE for Entrepreneurs
There are many reasons to start a business in UAE, but for entrepreneurs, the five industries below provide some of the best opportunities. With a booming economy and ample resources, these industries are ripe for new businesses to succeed. So if you’re looking to start your own business in UAE, read on for our top five picks.
Even though Abu Dhabi has a larger population than Dubai, Dubai has been one of the most significant drivers of e-commerce in the whole Middle East. With an annual turnover of US$8.5 billion, the United Arab Emirates is the 24th-largest market for eCommerce.
Running a successful e-commerce business in the United Arab Emirates requires only a small initial capital outlay and an in-depth familiarity with the industry. the United Arab Emirates online retail sector.
2. Real Estate & Tourism
A whopping 70% of Dubai’s population is made up of foreigners, making it one of the most sought-after ex-pat hubs in the world.
One of the main reasons why real estate in Dubai is so lucrative is that despite having more than 16 million tourists within its city boundaries for the fourth year in a row, Dubai is still the fourth most visited city in the world. Whether you’re interested in building, managing, or selling property, Dubai’s real estate market is quite lucrative.
Consulting services are in great demand because of the increasing number of businesses in the United Arab Emirates. Due to the fact that most UAE firms are still in their infancy, many of them need consulting services in order to properly manage their resources.
Most of the time, companies will hire third-party consultants to help them with strategic planning and corporate strategy since doing so allows them to acquire answers that are both more accurate and realistic. As a result, starting a consultancy in the United Arab Emirates, where there is no scarcity of consumers, might be a very lucrative endeavor.
4. IT Services
Since the government of Dubai has been actively implementing laws and programs designed to encourage digital innovation and recruit tech entrepreneurs, the city has become a magnet for tech companies from all over the globe. This is part of Dubai’s plan to make the city the most technologically advanced.
Over the last several years, Dubai’s free zones have attracted a growing number of digital start-ups. According to AstroLabs, the first Google for Entrepreneurs Global Tech Hub in the Middle East, DMCC is the ideal location for young companies seeking to break into international markets.
5. Digital Agencies
In Dubai, there is a plethora of digital marketing agencies available to help companies find and engage with their potential clients online. These businesses are able to develop and implement SEO, PPC, social media, and email marketing campaigns, among other forms of digital advertising (SEO). The digital marketing agency business in the UAE is quite lucrative. Statista predicts that in 2022, the market for digital advertising would spend US$947.40m on advertising.
Reasons Why UAE is a Heaven for Entrepreneurs
The following are the main reasons that portray why it is the right time for entrepreneurs to start a business in UAE.
1. City of Future
The Global Finance report from earlier this year ranked the United Arab Emirates (UAE) as the world’s second-safest country. Dubai began implementing technological upgrades ten years before the pandemic occurred in order to bring itself in line with the goal of being a smart metropolis.
Its visionary government is not just ensuring the country’s long-term prosperity for its residents, their families, and visitors by investing in cutting-edge technical tools like blockchain, virtual reality, and artificial intelligence.
In addition, the Dubai 2040 Urban Master Plan is now being implemented. Given all these developments, any visionary entrepreneur would do well to integrate themselves into this thriving ecosystem.
2. Ease of Doing Business
Dubai is home to several high-quality incubators. Incubators not only help start-up businesses get off the ground, but they also provide a wide range of post-launch needs.
When starting a business in the United Arab Emirates (UAE), these corporate services are crucial to getting things off the ground and running smoothly. Their participation makes the process easier by handling necessary governmental formalities and procedures such as documentation, paperwork, and approvals.
3. 100% Ownership of Your Business
A foreign owner of a business in the UAE no longer has to enter into an obligatory partnership with an Emirati sponsor who would control 51% of the company shares as a result of recent amendments to the Commercial Companies Law of the UAE.
Foreign investors, in addition to the UAE’s business community, have praised the judgment since it gives them full legal authority over their UAE company’s funds and activities. Additionally, investors who set up a business in the United Arab Emirates are eligible to apply for permanent citizenship and to have their relatives and employees sponsored for visas.
A special economic zone may be designated as a free trade zone, sometimes called a free commercial zone. They are fenced-in areas where enterprises may participate in commerce, transshipment, and re-export without being subject to customs duties and without having to consult the relevant government agencies.
Most free-trade zones may be found close to important transportation hubs like seaports, airports, and national borders, which provide a variety of logistical advantages for international trade.
Since there are no taxes levied on companies operating in Dubai, consumers will find the city’s commercial sector to be very accommodating.
It means that you won’t have to mess with the intricacies of your company’s cash flow and financial practices to reduce your tax liability.
Additional perks that may aid your company’s development include a lack of currency restrictions, a total exemption from export and import taxes, and the freedom to repatriate all revenues and capital.
FAQs About Starting Business in UAE for Entrepreneurs
Can entrepreneurs apply for Golden Visa?
It is true that an entrepreneur may submit an application for a UAE Golden Visa. Those who qualify for the Golden visa include investors, scientists, outstanding students, entrepreneurs, recent graduates, front-line heroes, and humanitarian pioneers.
What are the conditions for granting a Golden Visa to entrepreneurs?
If an entrepreneur satisfies one of the following requirements, they may be granted a Golden visa: ownership or partnership in a start-up that is registered as a small or medium firm (SMEs) in the UAE and that generates annual revenues of at least AED 1 million.
Dubai is an enticing challenge for the business-minded dreamer, with its burgeoning business climate aided by government incentives and the ease with which new businesses may be established. Although Dubai’s social standards are still emerging, the city’s kind people and forward-thinking regulations tend to favor the ambitious. Connect with Airzone for starting a business in UAE for entrepreneurs. We’ll get you in touch with the right people who can help you establish the business in the country.
If you want to learn more about how to set up business in Dubai, we have a comprehensive guide for you. With a thorough understanding of the UAE’s business scene, you should be well prepared to establish a company in the country. If you need information regarding free zones, we have detailed articles on different free zones in UAE.