Best Guide Before Setting Up a Business in Dubai
The convenience of doing business in Dubai is among the key factors which make many international businesses choose to set up their operations in this emirate. During the past 3 years, Dubai has rapidly evolved from an oil-exporting economy to a technology-led business hub. This evolution has made it one of the most lucrative centers to do business in the Middle East. As a result, more international businesses are choosing to establish their operations in Dubai.
Another key factor that imparts an immediate attraction to the investors is the tax benefits that they enjoy. Since there are no direct taxes on the possession or operation of foreign ownership, there is no need to worry about paying any kind of income or property taxes when you are establishing a business in Dubai. That’s why all these business owners prefer to set up a business in Dubai. The free zones and exemption on corporate and individual taxation offered by the government of Dubai further boost the attraction of the city. There are no worries about paying the heavy amount of taxes required in other countries.
Besides being a hassle-free destination for doing business, Dubai also presents many other benefits to its inhabitants. It is strategically located on the Arabian Peninsula, a fact that makes it a great destination for a variety of businesses. The city is home to some of the most sought-after shipping lines in the world such as the Dubai Creek that connects the Persian Gulf to the Arabian sea. A large number of shipping lines can be traced running through the streets of Dubai, which further heightens the chance of your business getting a strategic location.
Another reason for choosing to establish a business in Dubai is the enormous number of employment opportunities available in the city. There are thousands of job openings in various fields in Dubai. It’s home to leading multinational banks, oil refineries, software development, airlines, telecommunication companies, and dozens of other businesses. As a result, more than half of the city’s population consists of local workers who earn good salaries and are eligible for several social benefits. In short, a business owner in Dubai can look forward to a stable economic and social future thanks to the numerous advantages provided by its location in UAE.
On the other hand, there are certain disadvantages to establishing a business in Dubai too. The stipulated annual quota of non-QC personnel in the labor force is only 30%. This means that for an entrepreneur to start up a business in Dubai, he would have to secure a business license from the department of economic development (dedicated Ministry of Economy). This business license is often issued by the EDI (Department of Economic Affairs).
Since the cost of doing business in Dubai increases rapidly – due to high petroleum prices, cheap freight rates, and tax-free labor – a business owner may require some financial assistance from his home country. The best option is to get a trade license from the relevant authority in your home country before setting up a business in Dubai. A trade license can be hard to get from your home country but is absolutely necessary for starting a business in Dubai. For this, you may need to visit your closest trade office and get information on the requirements for trading in Dubai.
On the other hand, an entrepreneur may need to follow certain formalities when setting up a business in Dubai. He/she will have to obtain a business license from the EDI. The Business Information System (BIS) is a database that keeps track of all records regarding a company’s registration. For this, a company needs to have its name, type of registration, and address. This data is then registered with the appropriate Dubai authorities, and a business license can be obtained from the EDI.
Besides these two major things, there are other factors to consider when setting up in Dubai. The government has provided free zones for certain specific businesses, such as restaurants and call centers. Free zones are also available for foreigners working in these sectors. These free zones allow foreign entrepreneurs to own and rent shops, commercial establishments, and even hotels if they meet the necessary qualifications.