European entrepreneurs are constantly looking for opportunities to set up their businesses in Dubai. It is so because of the business benefits, environment, support, infrastructure, and more. But they are unaware of the requirements, processes, and things to consider to establish a business in the UAE. This guide for European entrepreneurs on setting up a business in Dubai will give you insights into everything required to open your company there right away.
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Key Benefits of Starting a Business in Dubai for European Entrepreneurs
Dubai’s economy is booming. New businesses are choosing to relocate there because of the city’s favorable reputation for accessibility, a reasonable tax structure, security, high-quality business support, and state-of-the-art healthcare systems.
The United Arab Emirates has become a major trading hub and top investment destination thanks to a variety of economic sectors, including construction, export, import, logistics, trade, financial services, hospitality, event management, tourism, and so on. Due to a variety of reasons, the United Arab Emirates is a preferred destination for many businesspeople. Here are the top ten reasons for European Entrepreneurs to conduct business in Dubai:
1. Economy of Dubai is Growing
The UAE’s economy remained strong despite the pandemic. In other words, the tourism industry recovered the quickest in comparison to any other part of the world.
Despite the Covid-19 crisis, the United Arab Emirates hopes to have a better future and wants to increase its economy by 2030. Modern infrastructure, excellent connectivity, highly developed incubators, accelerators, investors, a variety of incentives, and recent legislative changes are all available to entrepreneurs, investors, and creative minds in the country.
2. Strategic Location
Dubai’s advantageous position and easy access to the three main continents of the world make it a great place to do numerous economic operations, including international trade (import and export), logistics, tourism (hospitality), and events (event management). Dubai is in the center of the 400-mile-long shoreline of the UAE. Dubai is a perfect transit center for goods going between the East and the West since the city has access to both the sea and the air. Through Dubai, 2.5 billion consumers in Asia, the Gulf, Africa, and CIS countries can be reached.
3. Business-Friendly Tax Structures And Regulations
It’s interesting to note that many business owners that choose Dubai as their headquarters are ex-pats from countries and cities with high tax rates including the United States, the United Kingdom, Switzerland, and France. Although profits are not subject to taxes in Dubai, it is still important to be aware of the local tax rules. Those who favor self-regulation show Dubai’s regulatory environment as another benefit of doing business in the country. 38 free zones of the United Arab Emirates are established to promote international investment. It is done by exempting businesses from corporate and personal income taxes as well as withholding taxes.
The United Arab Emirates is one of the most diverse and liberal economies in the Middle East and North Africa. Apart from hotels, oil and gas companies with U.S. headquarters, and international bank branches, the majority of businesses in Dubai are exempt from taxes.
In Dubai, none of the following taxes are applicable:
- Withholding Tax
- Personal income tax
- Capital gains tax
- Value-added Tax
- Corporate Tax
4. A Perfectly Safe Place to Live and Work
The city’s modern startup hubs, design centers, and strategic partnerships have everything entrepreneurs need to establish a business. Dubai is ranked as one of the safest cities on earth due to its special emphasis on health and safety. Dubai is one of the countries with the lowest rates of crime in the world.
In order for businesses to thrive, there must a safe environment in the country. The number of severe crimes in the UAE is only 0.5 to 1 for every 100,000 people. Whereas the world average is 6 to 8 severe crimes for every 100,000 people. It makes the UAE a very safe and stable country to work and live in. The country also has political stability and extremely high security which attracts so many foreign companies and investors to the UAE.
5. Possible to Get a Residency Permit
UAE wants to make the country more attractive and appealing for business owners, startups, entrepreneurs, and other business people. That is why UAE has introduced various visas for people to live and work here.
Upon starting your business in Dubai or anywhere else in the UAE, you can get a residency visa for yourself, your team members, and your family members. The visa provides you with tons of benefits such as leasing an apartment for a long period of time, entering and exiting the country many times, and opening a current account in the Bank of the UAE.
Golden Permits were introduced in 2019 to make it easy for European entrepreneurs to set up businesses here. This permit is a long-term residence visa that lets business owners and their staff live and work in the UAE without any requirement of having a sponsor. Previously, it was necessary for businesses outside of the free trade zone to have a local Emirate partner or resident to have 51% ownership of the company. But now, these visas are given to qualified entrepreneurs and business owners along with their family members for either 5 or 10 years. The visas are renewed automatically and business owners can have 100% ownership of the business without giving any share to the local partner.
6. World-Class Healthcare
The Ministry of Health and Prevention oversees healthcare in Dubai. Also, the healthcare is top-notch with highly qualified staff and excellent facilities. Over 40 hospitals are currently operational in Dubai including the government’s four hospitals, Hatta, Dubai, Rashid, and Latifa. Every resident of Dubai can have access to healthcare. It is compulsory for employers to give health coverage for their employees’ costs.
You need to find something to do in Dubai in order to live a healthy lifestyle here in the city. Locals and visitors, who are conscious of their fitness, enjoy Dubai’s delicious cuisine, pristine beaches, and bustling streets great for a stroll. the most popular sports in the city include cycling, skiing, camel riding, polo, tennis, and cricket.
7. Keep 100% of Profits and Capital
There is no limitation on remittances of capital and profits in Dubai. However, enterprises and businesses mainly keep their money in the United Arab Emirates. It is so because Dubai features a tax-free status. Plus, UAE has zero foreign exchange restrictions. Furthermore, the UAE Dirham and the US dollar have a more stable exchange rate than other countries of the world.
8. Excellent Infrastructure And Transportation
The Dubai International Airport (DXB) is one of the best public transportation systems. It serves more than 260 destinations and 100 airlines worldwide. Moreover, according to the Airports Council International, Dubai International Airport (DXB) is the world’s fastest-growing and largest cargo and passenger hub.
if you’re launching a business in Dubai, you can easily find a warehouse, an office, a manufacturing unit, or a retail shop. There has been a tremendous amount of new construction in industrial, tourism, residential, and commercial use on a vast scale in the past few decades. Also, the construction of new highways, public transportation, and a new airport are all in progress.
The WEF Travel and Tourism Competitiveness Report placed the UAE’s infrastructure and transportation among the best in the world. The country’s roadways and the quality of air travel, ports, and ground transportation differ significantly. Ports in Dubai are of two types: aviation and maritime.
Dubai International Airport is the largest airport in the region. Plus, Dubai has one of the biggest seaports (Jebel Ali Port) in the region. You don’t have to worry about the logistics of international shipments getting here or there because it is possible to export and import goods to and from Dubai by air, sea, and land.
9. Corporations with a Global Reach
A few of the world’s most well-known multinational corporations including, Boeing, HP, Sony, Oracle, Nokia, and Microsoft with regional offices in Dubai. Moreover, BBC World, Procter & Gamble, and Adidas have regional offices in the city. In addition to that, a lot of internationally famous colleges have campuses in Dubai including Hult International Business School, the American University, Rochester Institute of Technology, Michigan State University, London School of Economics, Wollongong University, and the London School of Business.
10. High Living Standards
Another reason to choose the UAE as a company location is the top-notch quality of life and living conditions that one can enjoy in Dubai. Out of all the countries, the UAE is 15th globally and first in North Africa and the Middle East for overall quality of life. Moreover, according to the UN, the UAE is the 14th happiest country in the world. That is why entrepreneurs can be inspired and more productive by the pleasant environment while enjoying supreme living standards and quality of life.
Dubai has grown to be among the most significant cities in the world. Due to the government’s strong support for small and medium-sized enterprises (SMEs), businesses from all over the world are interested in doing business in Dubai. Dubai’s Smart City 2021 plan is also transforming the city, modifying public services being provided, promoting private-sector collaborations, and raising satisfaction levels. Expo 2020 Dubai not only attracted attention from throughout the world but also increased domestic travel, which increased during Covid. With 180 different nationalities residing in the UAE, the United Arab Emirates holds a commendable status as a global melting pot.
Dubai Business Setup: Essential Considerations for Foreign Entrepreneurs
Here are some of the primary things that a European entrepreneur must know to start a business in Dubai:
Financing & Investment Opportunities
Starting a business in Dubai and the UAE is similar to traveling far away to a different world. For the success of a business, it’s critical to have the appropriate resources of capital and talent and have the right information. Some of these essential components that have the power to make or break your company are financing and investment possibilities.
When you reach this stage, you have a strong yet crucial decision. Your two options are either you will need to obtain funding from an investor or borrow money from a lender.
Regardless of the financing option you select, it’s critical to read all terms and conditions in detail before proceeding. Be sure you comprehend any possible risks. Also make a plan that if applicable or the scenario builds up, how repayment will be handled. Make a good choice for investment to ensure that your business gets off to a strong start by moving forward with the appropriate funding alternatives.
Consider the following details regarding each choice:
The government can give you startup grants to help new businesses start doing their operations in an area. You must explore what is accessible in your area in this regard to secure funding for your startup.
In this type of funding, the investors provide funding in exchange for potential future profits or equity or shares of the company on their investment.
Pre-selling goods or services on websites like Kickstarter enables you to raise funds before they are even created.
If your company satisfies certain criteria, such as having good credit, collateral, or a strong business plan, lenders such as banks can provide the money you need for your business.
Develop a Business Plan & Strategy
In order to successfully set up a business in Dubai, UAE, you must have a good business plan and strategy for it. A comprehensive financial plan, a crystal clear understanding of the customers and target market, an analysis of competitors, and market research are all included in an effective business plan. Having the right forecast and budget for business operations is essential for businesses.
While creating a business strategy, it’s crucial to take into account all of the different areas where the company could be strengthened or developed. This includes coming up with marketing plans, setting deadlines for completing tasks, seeing opportunities for expansion and innovation, and evaluating present practices and procedures. It’s also critical to consider any laws or rules that might be relevant to companies operating in Dubai or the UAE.
Companies should consider how they can differentiate themselves to stand out from the competition and obtain an advantage in the market. Businesses aiming to create an impression with their goods or services can benefit from developing strategies like employing creative methods or investing in technology.
To make sure businesses stay competitive in their market, they should also think about development opportunities and invest in training. These actions will assist companies in laying a solid basis to develop their success in Dubai and the UAE.
How to Establish a Business in Dubai as a European?
Follow the steps given below to start your business in Dubai as a foreigner:
1. Determine the Type of Business
First of all, you need to determine the type of your business. It will help you in choosing a license type for your company. The four types of licenses which are available in Dubai, UAE are as follows:
Some examples of activities that other departments must approve include legal consulting, veterinary activities, food trading, and jewelry trading. More than 2100 business activities are allowed legally to be conducted in Dubai as per the Department of Economic Development (DED). Different types of licenses allow different activities.
2. Choose a Business Structure
A crucial decision to make is to choose a business structure and entity for your firm. It can have serious effects on the future of your business. It will tell you the ways to protect, manage, and finance your business. Several types of structures are acceptable in Dubai, UAE including
- Offshore Companies
- Sole Proprietorship
- Free Zones
- Limited Liability Company (LLC)
- Professional Companies
3. Determine Ownership
Free zones and Mainland are two different jurisdictions where foreign businessmen can conduct business. Free zones allow 100% business ownership but give permission to mainly trade within the boundaries of the free zone. Whereas the mainland gives 51% ownership to the business owner and 49% ownership to the local partner but allows trading in different markets of the UAE.
4. Choose a Trade Name
The name of the business should be a decent one and should reflect the type of business that you want to conduct. Please keep in mind that there are some set rules to follow when it comes to choosing a trading name for your business.
5. Designate Share Capital
The minimum share capital of your prospective company is determined by the Memorandum of Association. Most of the time, while starting a business in Dubai, owners are not required to invest a minimum amount of money.
6. Secure the Premises
After all of your paperwork and legal requirements have been resolved, you can decide where your office will be set up, Offices can be looked for depending on price, size, location, and other criteria.
7. Hire Employees
Before your business registration is accepted, the business must have a manager ready to take charge of operations. You might not be able to hire employees, nevertheless, under some circumstances. You may look to hire contractors in this situation.
8. Get Local Support
It is a requirement to have a local agent, sponsor, or partner in order to receive a license from the DED. Also, a local contact can assist in moving the business forward successfully in free zones.
9. Get a Business Visa
You will also need to get a business visa for your company. The best visa for European entrepreneurs is the golden visa. Following are the concise details of the types of business visas that you can get in Dubai.
|Single-entry visa for searching for business opportunities
Multiple entry visa for activities such as attending conferences, business meetings, etc.
|Free-zone visa for company shareholders and owners
Mainland visa for company shareholders and owners
|Green visa for company shareholders and owners
Golden visa for startup founders and investors in business
Required Documents for Company Formation in Dubai, UAE
The following documents must be submitted if your UAE business will solely have individual shareholders:
- Copy of Emirates ID (if applicable)
- Copy of passport
- Copy of residence visa (if applicable)
- Passport size photograph (digital form)
You will additionally need to submit the following documents if you are setting up a business with corporate shareholders:
- Memorandum of Association (MoA)
- Certificate of Incorporation
- Certificate of Incumbency or equivalent
How can a foreigner start a business in UAE?
Here are the steps to start a business in UAE as a foreigner:
- Outline your planned business activities
- Submit the documents
- Apply for the trade license
- Get the visa
- Open a corporate bank account
Can a foreigner register a business in UAE?
Yes, a foreigner can register a business in UAE by following the defined process.
Can Europeans work in UAE?
Yes, Europeans are allowed to work in the UAE.
How difficult is it to start a business in Dubai as a foreigner?
If you follow the process step by step, you can easily start a business in Dubai as a foreigner.
How much money is required to open a company in UAE?
It depends on many factors such as location, jurisdiction, type of company, visa, permits, etc to get an estimate of the money required to open a company in the UAE.
RIZ & MONA: Your Partner for Company Setup in UAE as European Entrepreneur
European entrepreneurs can easily set up a business in Dubai if they follow the process set up by the government. There are some documents that must be submitted to the authorities to form a company. It is recommended to get assistance from company formation experts in Dubai like RIZ & MONA CONSULTANCY to ensure the process goes smoothly.
You can leave everything to us and our team of business setup professionals will handle your application and process it in an error-free way. Get in touch with us now and book your free slot to open your business in the UAE.