The UAE has been a destination of choice for starting or growing businesses for many years now. Most investors find its economic stability, steady growth, larger markets, investor-friendly processes and a tax-free regime an attractive proposition. UAE has around 30+ free zones, also you can register in any 7 Emirates within UAE. Each Emirates has its own specifics and offers its unique economic features for business. There are many free trade zones on the territory of the United Arab Emirates, which are formed in order to attract business – foreign investors and entrepreneurs. 

Company registration in such free trade zones provides foreign businessmen with the possibility of complete ownership and company management. There are significant tax and customs benefits, and there are no restrictions on the volume and nature of the movements of the investment funds and their repatriation for companies domiciled on the territory of the free trade zones.

The authorities of the UAE also provide the opportunity for the registration of the offshore companies, which can carry business only outside the UAE, but, at the same time can acquire immovable property in ownership within the country, participate in investment projects and serve as owners of other companies in UAE and abroad.

Following are 7 top advantages of having your business in the UAE:

Incentives for Small Businesses –

The government of Dubai not only provides facilities to large investors but is also friendly towards small and medium scale enterprises. The government announces incentives for types of businesses from time to time in order to support them. The President of the UAE and Ruler of Abu Dhabi launched The Khalifa Fund for Enterprise Development in 2007 to help develop local investment and entrepreneurs, as well as to support and develop small to medium-sized investments in the Emirate.

For existing businesses, they offer guidance on type of business, mode and category of business licensing, reducing business start-up costs and accessing reduced rates for business spaces. Dubai SME runs a Government Procurement program under which All Dubai Government departments allocate at least 5 percent of their annual purchasing budget to buying from UAE Nationals who own and operate small and medium-size businesses. This helps the small and medium-size businesses to build their capacities to compete with larger companies and sell their products and services to government departments.

Full Repatriation of Profits –

Many countries impose restrictions on foreign businesses, and it is mandatory for them to retain some part of their capital and profits inside the host country. But there is no such compulsion in Dubai. All types of businesses in Dubai mainland and any of several free zones are allowed 100% repatriation of their capitals and profits. 

Under typical foreign direct investment laws, the foreign business investment has only up to 49% of business share while the local partner gets to have 51%. Under different company formation in UAE, foreign business owners can enjoy 100% business ownership.

Tax Exemptions –

The UAE has no income tax. Recently, since 2018 UAE has introduced VAT. However, it is an indirect tax that businesses generally pass over to the consumer. Businesses while filing their returns also can claim VAT refunds for business expenses made. The UAE levies corporate tax on oil companies and foreign banks only. It has not yet applied corporate tax on other industries. Businesses registered in the free zones are exempt from corporate tax as of now.

The Emirates offers various kinds of business ownership patterns and tax categories. One among them stands out to be the free zones with the feature of 100% tax exemptions. This means you can keep your business profits without having to pay any business/income tax to the government.

Low Investments Required –

So in theory if you wish to start a business in the UAE with 100,000 AED you will need to assume that you will spend about 60,000 AED of the amount on setting up your company and hence, look for business ventures that can run with an operating expense of 40,000 AED or less. Even if your business does breakeven or makes a profit in the first year you will need to reinvest a certain sum in the second year to ensure your survival. 

It is a good idea to consult with a business consultant. Business consultants can help you evaluate this decision and provide you with options to use the amount optimally. They can either provide you with ideas or opportunities for investment or help flesh out a business plan based on your idea and the amount that you must work with.

Flexible Options to Set Up a Business –

Many free zones in the UAE allow you to create a business license without the requirement of a physical office space. They provide license holder smart/ flexi office usage. This however comes with restrictions regarding the number of visas that can be issued. This should not matter if you wish to be a solopreneur and run the business on your own.

Having a home-based business is not illegal in the UAE, it is currently a trend, however, it is important that you register your business and have a business license. In Dubai, the DED’s ‘Trader license’ is aimed to integrate startups and business activities that operate online or on social networking sites within the economic department’s database.

Strategic Locations –

UAE’s geographical location has made it a trade hub for products being shipped from the East to the West or the other way around. Its central location and access to the Arabian Gulf makes it a perfect hub for trade. UAE is also strategically located between three continents, Europe, Asia and Africa. The country also provides easy access to the Middle East Markets.

This location advantage makes UAE a very suitable location if you wish to start an import and export or trade business. On one hand is China and India which is a source of raw materials and significant trading opportunities. On the other side of UAE is the European Union which is a major trade partner.

Full Business Ownership –

Foreigners/ Expats operating in mainland UAE can have only a maximum of 49% interest in the business according to the country’s FDI laws. The remaining 51% must be held by a local partner. Do not let this scare you as mainland companies can be registered as LLC and an LLC is flexible and differential profit-sharing arrangements are also possible.

UAE also has a variety of special exclusive zones classified as Free Zones, companies’ setup in these Free Zones can be 100% owned by expats. Along with 100% ownership your business will also experience the following advantages, zero establishment and personal tax, 100% return of capital and incomes, and 100% import and export tax exemption. Businesses in these zones also have various benefits depending on the Free Zone and the business sector.

For advice on any aspect of Business, do connect with the experienced Business Mentors on www.jupiterbusinessmentors.com and book a Free session with any six mentors on the platform.