Why Does Everyone Want to Start a Business Setup in Dubai?
Dubai has experienced remarkable growth in a relatively short
period, making it an appealing destination for entrepreneurs to start their
businesses. The Department of Economic Development (DED) in Dubai has observed
a 13% annual increase in new startups choosing to operate in the city. Dubai's
thriving economy offers numerous opportunities, particularly in sectors such as
services, finance, trade, real estate, and properties that generate profits.
Additionally, Dubai is known for its diverse and cosmopolitan environment in
the Middle East.
Reasons why a foreigner should start a Business Setup in UAE
1. Tax Benefits: Companies incorporated in Dubai are not
subjected to corporate tax, withholding tax, VAT Registration,
import/export tax, or capital gains tax.
2. Double Tax Avoidance Treaties: The UAE has signed over 66
international double tax avoidance treaties with key countries like China, the
USA, and many EU members, providing additional tax benefits and reducing the
risk of double taxation.
3. Currency Accessibility: Foreigners have easy access to the
local currency as there are no exchange controls in place.
4. Multicultural Environment: Dubai is a multicultural city
with a diverse population from around the world. This creates a vibrant atmosphere
and keeps the city up-to-date with the latest trends and developments. It also
offers a wide range of international cuisines for food enthusiasts.
5. Shopping and Tax Benefits: Dubai is a shopping paradise as
it does not impose VAT. Additionally, residents are exempt from paying personal
income tax.
In summary, starting a business setup in Dubai provides tax
advantages, international tax treaties, currency accessibility, a multicultural
environment, and tax-free shopping opportunities.
Business setup in Dubai
To start a business setup in Dubai, the first step is to
choose the right company type for your venture.
Opting for a business setup in a
Dubai-free zone is strongly recommended. In a Dubai-free zone company,
foreign investors can have full ownership (100%) of the company.
However, if you opt for a Dubai Limited Liability Company
(Dubai LLC), foreigners are typically limited to owning up to 49% of the
company. The remaining 51% of shares must be owned by a UAE national. In
exceptional cases, the government authorities may grant permission for a 100%
foreign-owned LLC.
Advantages of Setting Up a Business in Dubai
1. Thriving Economy: Dubai's economy has experienced rapid
growth, making it an attractive destination for business. Companies from around
the world are shifting their operations to Dubai, which has become a hub for
startups and established conglomerates.
2. Skilled Workforce: Dubai offers a liberal and
cost-effective labor market, making it easier to find skilled employees. The
city's desirable location and favorable labor laws allow businesses to recruit
talent from various parts of the world and scale their workforce as needed.
3. Local Sponsorship:
While it is a requirement for certain business types in Dubai to have a local
sponsor or Emirati partner, this arrangement has its advantages. A local
sponsor can provide valuable insights into the local market, and industry
connections, and navigate cultural nuances. They act as a liaison with
government authorities, enabling smoother operations and local compliance.
4. Excellent Infrastructure and Reputation: Dubai provides
world-class infrastructure, including transportation, healthcare, education,
business parks, and corporate spaces. Its strategic location and strong
business reputation make it an ideal place to start and attract businesses.
5. Favorable Business Laws: The UAE government offers a
business-friendly environment with laws and regulations designed to support
foreign investors. The government continuously amends laws to make them more favorable for foreign investment, streamlining licensing and registration processes.
6. Tax Benefits: Dubai's tax system provides various
ownership patterns and tax categories. Free Zones, in particular, offer 100%
tax exemptions, including 0% corporate and income tax. This means business
owners can enjoy significant tax savings as they are not required to pay taxes
to the government.
In summary, Dubai offers a thriving economy, skilled
workforce, excellent infrastructure, favorable business laws, and attractive
tax benefits, making it an ideal destination for setting up a business.
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