Reasons to start a business in Dubai

Reasons to start a business in Dubai

Share this article:

I happen to travel a lot and I mainly do it for business. As this is a business blog, I assume you might be interested in tips on the economic environment of the places I reach. For starters, I believe that Dubai is not only a tourist destination, but also a business one.

Here are at least three reasons for this:

1. Legally: you can do business without any local partners

They say that anywhere you go to do business in a foreign country you need a local partner with connections and understanding of the market specificity. In the Arab countries, this not only goes without saying, but it has become law, as companies cannot be incorporated unless in partnership with citizens of those countries, which is not quite desirable.

In Dubai, however – and in the United Arab Emirates, in general – this obligation has been recently cancelled. It has ceased to exist in the case of the companies having their registered offices in the so called free zones. If you are interested, you may see a list here.

The benefit of the so called free zones is that they include business facilities especially designed for the foreign investors, from the ease of incorporating a company to the benefits regarding the recruitment of local personnel, the legal services and others. English and general business knowledge will do.

2. Financially: the taxes are low

This is a well-known fact: in the Emirates, taxes mean the 5% income tax and the 0% tax on dividends. It is true that they are considering introducing a tax on dividends, but for the time being taxation is low.

3. Operationally: the real estate market is dramatically collapsing, but…

If you are interested in the real estate business, you might have heard that the real estate market in Dubai is collapsing. This is somehow true, but lately the collapse has stagnated. The crisis is less and less severe, which suggests a future recovery might be underway. In other words, from my point of view and from the point of view of others, such crisis is a good opportunity for purchases. That is to say that the real estate market in Dubai looks like the Romanian one during 2010-2011, the period when we were all recovering from the real estate boom in the first part of the years ‘00.

There are reasons to buy, as we have pointed out and, if this is so, you should wait until such time as the assets recover. An interesting feature of Dubai is that, as a rule, tenancies are signed for one year and the rent is paid in advance. In other words, if you have invested in a building, you may now proceed to make it cost effective. A building with firm tenancy agreements is worth by far more than an empty building.

From my point of view, these three are reasons enough to consider Dubai very attractive. To start with, an analysis of the real estate market in Dubai can be read here in English.


Share this article: