We all know that currently there is a war going on between Russia and Ukraine. The war has made it very difficult for Russian businesses to conduct their activities in the country and outside the country. For such Russian entrepreneurs, investors, and businesspeople, Dubai is the best place to do business. Here, the Geo-political situation is far better and more stable than in Russia. Here they can run their company with no trouble and in a great business-supportive environment. Let us find out how Russian entrepreneurs can set up their businesses in Dubai either in a free zone or on the mainland.
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Reasons for Russian Entrepreneurs to Setup a Business in Dubai
Dubai is one of the safest places to live, work, and settle, It is the best business and trade center for promoting international trading. E-governance, a solid banking system, a stable government, and a developing business environment make up the city’s well-established infrastructure. The Arab Dirham is the currency of the UAE and keeps a steady position in the financial markets and is pegged to the USD.
Other than these, the following are some of the reasons for Russian businessmen and investors to invest in Dubai, UAE:
A Safe Country to Avoid Western Sanctions
Due to unrest in Russia and Ukraine, some lenders are removed from the Swift messaging network and the West has imposed sanctions on the Russian central bank. This has made it hard to invest businesspeople’s money outside Russia and hence making it difficult to do business in the country.
The UAE always tries its best to enforce UN sanctions. But in the Ukraine-Russia conflict, the country has decided to keep a relatively neutral stance. Besides the neutral stance on UN sanctions, The UAE is known as an investment hub and a popular tourism region. These things have simplified the process of business setup in Dubai and are successful in catching the attention of Russian entrepreneurs.
Russia’s Historical Trade Ties with the United Arab Emirates
There has been a lot of investment made by Russia in the UAE. It is because both countries are strong trade partners with one another. They have been trade partners for over fifty years.
The total trade between the UAE and Russia in 2020 was USD 3.3 billion in 2020 and reached USD 4 billion in 2021. In 2022, the UAE and Russia’s trade climbed by 68% to $9 billion. In the history of relations between our countries, this is a record level of trading. In terms of trade with Russia, the UAE has maintained its top spot among Arab countries.
According to statistics, 4,000 Russian companies are currently operational in the UAE. According to business setup consultants in Dubai, more Russian companies will establish in the wake of the sanctions-prompted surge in investments.
Favorable Tax Regime of the UAE
Russian investors can enjoy the advantages of a low-tax rate in the UAE. That is why they seriously are looking to set up a business in Dubai. There is no tax on the personal income of individuals in the country. But from the 1st of June, 2023, if the business profits go above AED 375,000, they will have to pay 9% corporate tax. Still, the lowest corporate tax rates in the Middle East region are of the UAE. Value Added Tax (VAT) is the other type of tax in the UAE. The UAE levies this tax at a meager rate of 5%. Whereas, Russians have to pay 13% personal income tax in Russia.
Investments-Based Residence Visa Options
Russian investors can set up or invest in a business in Dubai to easily issue a UAE residence visa. To bring more foreign investment to the UAE, the country recently updated its residence options. The Russians can obtain residency visas for themselves and their family members by starting a business setup in Dubai.
Many Russians choose to invest in the real estate sector of Dubai to get a residency permit. According to the most recent news sources, the number of Russians investing in real estate in Dubai has reportedly increased between January and June 2022 compared to the same timespan in 2021. Russians can also issue a Dubai Retirement Visa, Golden Visa, or Investor Visa by investing in various business sectors in the UAE.
Opportunity to Live in a Community of Russian Expatriates
According to statistics, there are currently 40,000 Russians residing in the Emirates. Around 60,000 Russian-speaking immigrants from former Soviet states also live in the country. This implies that Russian investors won’t feel out of place while residing, working, or establishing a new company in Dubai. Also, working with Dubai business setup specialists helps simplify the business setup procedure.
Ability to Completely Own Companies
Foreigners considering establishing a business in Dubai now have more ownership opportunities than there were in the past. Foreign business owners can get a trade license for any of the more than 1000 activities listed by the Department of Economic Development (DED) to get benefits from 100% ownership of businesses on the mainland.
Another choice for you is to launch a business in one of the more than 40 free zones in the United Arab Emirates, which provide 100% business ownership in addition to other advantages like 100% capital and profit repatriation, no tax policy, modern infrastructure, import/export perks, a simple company formation process, and more.
Options for Russian Investors to Invest in a Business in Dubai
In Dubai, business owners and investors from Russia mainly have two options to set up a business. They can either set up a free zone company (FTC) in any of Dubai’s free trade zones. Or they can set up a limited liability company (LLC) on the mainland of Dubai. A Russian investor can easily establish a company in Dubai with the assistance of a knowledgeable business advisor.
The Russian investor has a variety of business activities that they can legally conduct in Dubai. The Dubai Free Zones gives a lot of benefits such as easy company formation, 100% foreign ownership, UAE residency visas for investors, and top-notch amenities, unlimited access to business services.
The new company trade license and other company paperwork will be prepared within two or three business days. Then, you can open a corporate bank account and submit an application for a UAE resident visa.
How can a Russian Investor Form a Company in Dubai?
Russians can establish a Mainland or Free Zone Company in Dubai’s Mainland or Free Trade Zones respectively based on the number of shareholders on the board of directors of the company. The nature of your intended business operations will decide your choice of business activities.
Russian entrepreneurs and investors must follow these steps to start a company in Dubai:
Step 1. Choose a Business Activity
Select the types of business activity you want to launch in Dubai. Make sure the activity complies with Dubai’s laws and regulations. You can only do those business activities that are listed under your trade license.
Step 2. Choose a Name
Next, you need to choose a name for your business. There are certain rules that you need to follow when picking the name for your business. Make sure you follow the rules and regulations when choosing a name. It is important to do so because otherwise, the authorities will not allow you to register the name. So, ensure the name is in accordance with the naming rules of the UAE.
Step 3. Select a Business Structure
Choose the type of business structure you want to create. The allowed business structures in Dubai include a free zone company, a limited liability company (LLC), etc.
Step 4. Obtain Trade License
Then, you need to apply for a trade license from a free zone authority or the Department of Economic Development (DED) in Dubai.
Step 5. Register the Company
Next, complete the company registration procedure of the mainland or free zone’s relevant authority. In order to do this, you’ll need to submit evidence of residency, copies of your passport, and other required documents.
Step 6. Obtain Visas
If you plan to live in Dubai for some time or years to come, you should apply for a visa for yourself as well as your ex-pat employees, if you hire any for your business.
Step 7. Rent Office Space
Depending on the kind of company you’re opening, you will need to rent an office space in Dubai either in a free zone or on the mainland.
Step 8. Open a Bank Account
You will also need to open a bank account for your company. You can open an account in any local or international corporate bank.
Step 9. Comply with Regulations
Make sure you comply with all applicable laws and regulations in Dubai including, adhering to labor laws, paying taxes, and getting the required licenses and permits.
How to Obtain a Dubai Visa for a Russian Entrepreneur?
Russian entrepreneurs, businessmen, and investors can easily get a tourist visa on arrival for 30 days in the Emirates. This means that they can come to Dubai and complete the process of company registration, submit an application for a residence visa, and open a business account in the bank. Investors from Russia can also get a Dubai residence Visa by setting up a business in the Free Trade Zones in Dubai. The process is the same for this visa as well. For more information, you can get in touch with business setup consultants in Dubai such as RIZ & MONA CONSULTANCY.
Documents Required to Set up a Business in Dubai as a Russian Entrepreneur
- Passport size pictures
- Application form for license approval and to reserve the trade name
- Your passport copy
- A well-drafted business plan
- Your visa copy
- Copy of the trade license or registration certificate (if you have an existing company)
- Your company name
- Audited financial reports of your business from the last 2 years and board resolution
- Form related to original and notarized registry identification for the company’s manager or director
- Business documents of the shareholder
- NOC from the local sponsor
- Colored passport copies of the company’s appointed directors or managers and the company’s shareholders
- Details of your intended business activities
- Sample signature of the company’s managers or directors and the company’s shareholders
Best Free Zone to Choose in Dubai
A free zone offers a variety of advantages for Russian business owners wishing to establish a business in the United Arab Emirates. Choosing the best free zone among the many available ones might be challenging. To help you out, we’ll walk you through the six best Dubai free zones so you can start your business in the UAE with confidence. So whether you’re starting a company from scratch or already have one choose the best one from the below-mentioned free zones for your future business endeavor.
Following is a list of the best free zones in Dubai for Russian entrepreneurs and businessmen to easily establish a business in the Emirates. These free zones provide support for the company’s business infrastructure and the most affordable company formation package.
1. Dubai Multi Commodities Center (DMCC)
If you are in search of a free zone that has got a Midas touch for your new commodity business in Dubai, you should choose DMCC (Dubai Multi Commodities Center). It is sitting at the center of the mesmerizing district of Jumeirah Lakes Towers. This free zone offers raw materials or soft commodities for different businesses such as cereal grains, tea, and oil, and ideal opportunities for hard commodity businesses. DMCC also glitters with businesses that operate with or deal in diamonds, base and precious metals, gold, and other hard commodities.
DMCC has a class of its own due to a unique mix of modern residential and commercial properties, and unmatchable financial services and commodities. Upon establishing a business in the DMCC free zone, you will enter the paradise featuring a remarkable choice of properties, a vibrant community, top-notch services, and the latest infrastructure, all minutes from world-class sea, air, and road links to the rest of the world.
2. Dubai Silicon Oasis – IFZA
IFZA is located at the Dubai Silicon Oasis Free Zone. It is the perfect free zone for startups belonging to any field. You can establish a business for a reasonable price in the Dubai Silicon Oasis with a quota of one visa.
The free zone provides Russian entrepreneurs with a variety of business activities at affordable prices. Russian investors can also have access to a variety of business amenities that will prove to be very helpful for their businesses.
3. Dubai International Financial Center (DIFC)
Dubai International Financial Center (DIFC) comes in third on the list of best free zones in Dubai. It is a well-known financial hub for lifestyle, business, and fintech in the area serving the South Asia, Middle East, Africa, and South Asia markets. Since its formation in 2004, DIFC has grown to become one of the top 10 onshore financial centers worldwide.
The free zone brought about a paradigm shift in the region by establishing an independent English-language Common Law judiciary (DIFC Courts), a Common Law framework, and an independent regulator (DFSA).
Also, the business-friendly free zone offers a variety of benefits and efficiency, making it a top location for working and living.
4. Dubai Meydan Free Zone
One of the latest free zones in Dubai is Dubai Meydan. It is close to the well-known Meydan Hotel and Racetrack. Thus, it is the preferred hub for enabling international business among Russian investors. Investors and businessmen interested in leasing offices on Dubai’s mainland can take advantage of the free zone’s multi-year company license packages.
5. Dubai World Trade Center (DWTC)
Now we will discuss DWTC, another top-rated free zone in the UAE. This free zone was founded in 1979. It is an award-winning free zone that is playing a crucial role in the development of trade and business travel in Dubai. DWTC provides an extremely competitive environment regarding productivity and creativity for international corporations and start-ups.
DWTC business community has access to global and regional markets from a well-organized and competitive community since they are situated close to the important event center that hosts important exhibitions, conferences, and events. The free zone is also situated in the center of Dubai’s business sector.
When we talk about the benefits of setting up a business in the Dubai World Trade Center (DWTC), the sky is the only limit. It facilitates the formation of a lot of different event management companies and top-tier offices as well as general, professional, and commercial trade businesses. branches and new companies looking to start a business in One Central’s free zone can benefit from the proposed premier incentives of the DWTC Authority.
The choices of business activities in the DWTC free zone are a lot. Trading, services, and events are some of the core business sectors of the DWTC. The free zone is ideal for companies, entrepreneurs, and investors looking to provide professional services and events management services.
6. Dubai Airport Free Zone
The most prestigious free trade zone in Dubai is Dubai Airport Free Zone. This free zone is situated close to one of the busiest airports in the world.
It provides a broad range of commercial activities, top-notch corporate amenities, and office space. DAFZA is an excellent option for trade firms whose operations depend heavily on logistics. The proximity to the Dubai International Airport aids immensely in smoothly conducting international trade.
Residency Options for Investors from Russia
A three-year UAE visa can be obtained by Russian investors upon making an investment in real estate valued at about €185,000 or $272,000. A five-year visa can be obtained for about €1.18 million or $1.36 million in investment. Russians from the upper middle class who wanted to protect their company from the economic collapse at home or government takeover would undoubtedly have the resources to establish a safe haven here as well.
Russians make up the majority of the people coming to the UAE. They have little trouble establishing themselves and obtaining residency in Dubai. Although many Western countries have restrictions, the UAE government is legally issuing visas to non-sanctioned Russians.
It is very simple to purchase real estate in the United Arab Emirates and offers buyers a residency visa without the need for local sponsorship. Plus, there is only a little documentation required to open a business or rent an apartment. Also, remember that money is king in the UAE.
FAQs – Frequently Asked Questions
How Russians can start a company in Dubai?
There is a defined process that Russians need to follow to start a company in Dubai including choosing a business activity, the type of business structure, getting a trade license, visa, and renting an office.
Can I open a business in Dubai as a foreigner?
Yes, a foreigner can open a business in Dubai by following the process defined by the UAE government.
Can a Russian citizen start a business?
Yes, a Russian citizen can start a business in the UAE by following the set process.
Can Russians work in UAE?
Yes, Russian are allowed to work in the UAE.
What are the requirements to open a company in Dubai?
- Identify the nature of your business activity.
- Determine the legal structure of your company.
- Register the trade name for your business.
- Apply for the initial approvals.
- Draft MoA or LSA.
- Choose your business location.
- Apply for extra government approvals.
Business Setup in Dubai for Russian Entrepreneurs with RIZ & MONA
Hopefully, now you know the process and have the required information on setting up a business in Dubai as a Russian entrepreneur. For more information, you can consult business setup experts in Dubai like RIZ & MONA CONSULTANCY. Contact us now and book your free slot to get assistance or guidance in the process of establishing a business or launching a company in the UAE.