Why Do You Need to Start Your Business in the UAE?

Many multi-millionaires have grown their wealth by starting a business, regardless of how big or small. UAE is a popular destination among investors and entrepreneurs. It is not only a friendly country, but its low tax policies and ease of doing business have helped strengthen its position as a business hub in the Middle East.

UAE has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement.

The UAE has benefited from increased investments looking for diversification within the region, along with the spill over effects of higher oil prices benefiting the economy as a hydrocarbon exporter on the background of abundant oil and gas reserves, the seventh-largest in the world.


What are the benefits of doing business in the UAE – United Arab Emirates?

Are you determined to start a company in UAE Great! The following points show why you should choose the UAE – the heart of the Middle East – as the (new) home of your business and an attractive hub for you to invest:

  • UAE has one of the most liberal trade regimes in the Gulf Region and attracts strong capital flows from across the region.
  • The business atmosphere in the UAE is considered as one of the most favourable in the Gulf Cooperation Council (GCC) region.
  • UAE is focussed on economic diversification in trade, logistics, banking, tourism, real estate and manufacturing
  • As an investor-friendly authority, the government of the UAE has ensured that foreign investors get to enjoy the best of amenities and infrastructure.
  • UAE has a strong banking system and stable political system.
  • UAE provides for a window of free trade zones that allow 100% foreign ownership and nil taxation regime provided certain conditions are met.
  • Emiratis are known and beloved for being some of the most hospitable people ever. Having a business in a society with people who are welcoming to foreigners and everyone alike is a positive boost for any business brand.
  • UAE provides a tax favourable environment for most industries; 0% corporate tax provided certain conditions are met and personal income tax, as well as a minimal VAT rate of 5%.
  • UAE has high number of expatriate workforce at all levels of the economy which is absorbed by the growing number of international companies, professional service firms and financial institutions. The UAE is also a favourable country for employees and employees alike since it provides competitive wages and, as mentioned, has 0% tax on personal income.
  • UAE does not have exchange control restrictions and it is possible to have unrestricted repatriation of income and capital.
  • UAE’s culture is driven by Islamic traditions, however, with over 150 nationalities, expatriates are able to practise their own cultures.
  • UAE provides a safe and secure family environment with one of the lowest crime rates in the world.
  • The recent amendment of the Commercial Companies Law allowing for 100% foreign ownership will underscore Dubai’s position as a focal point for major multinationals and will result in substantial investments in industry and ICT sectors.
  • Despite having federal rules for setting up a company in the UAE, each of its seven emirates has their own set of additional regulations and legal procedures for establishing a business.
  • The UAE is very well connected to the rest of the world mainly due to Ethihad, the UAE’s national carrier and Emirates, Dubai’s airline, rapidly expanding their fleet networks.
  • Economic diversification into gas, tourism, financial services and high-tech industries offers some protection against volatile oil prices. Oil prices are expected to stay high (by historical standards) over the near future.
  • Courtesy and hospitality are amongst the most highly prized of virtues, and this is reflected in the warmth and friendliness of the local people.
  • UAE society is marked by a high degree of tolerance for different lifestyles.
  • The UAE is a regional leader in the protection of intellectual property rights, with improving enforcement of copyright, trademark and patent laws.

People in the UAE prefer to do business in person. Relationships and mutual trust are paramount for any successful business interaction and can only be developed through face-to-face meetings. It is important to spend time with Emirati business counterparts and ensure future meetings take place to continue cultivating the relationship. It is also important to have connections with people in the UAE who can facilitate introductions before attempting to do business in the countryEmiratis prefer to do business with those they know, so appropriate introductions are important in order to establish a successful business relationship.


Though there are benefits in starting a business in UAE it has its own weaknesses and threats. The UAE’s currency is pegged to the dollar, giving it minimal control over monetary policy and reducing its ability to tackle inflationary pressure. The country’s location in a volatile region means that its risk profile is, to some extent, affected by events elsewhere.

Heavy subsidies on utilities and agriculture, as well as an outdated tax system, have contributed to persistent fiscal deficits in the past, although rising oil revenues have addressed the problem in recent years. UAE is committed to maintaining its peg with the US Dollar and, therefore, the prices of non-US Dollar imports are expected to witness volatility in line with the movements in the US Dollar exchange rate.


Deena

Human Resource professional and writer.

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