Setting Up A Business In Dubai
It’s a great time to set up a business in Dubai. The past 10 years have witnessed incredible growth throughout all sectors of the Dubai economy. The emirate’s government is constantly working to improve its commercial transparency and introduce dynamic regulations that aid the formation of small and medium enterprises (SMEs) and have the ability to react to global financial challenges.
Dubai’s Diversified Economy
Dubai’s economy is no longer reliant on oil, but is more diversified, relying heavily on trade, services, and finance sectors. Dubai has also implemented a strategy to make it the capital of the Islamic economy. The seven strategic directions of Dubai as a global leader in the Islamic economy include:
- Islamic finance
- Halal food
- Family-friendly tourism
- Islamic digital economy
- Fashion, arts, and design
- Economic education
- Islamic standards and certification
In addition, Dubai has already launched plans to be the global center for issuance of Sukuk (Islamic corporate bonds) and the establishment of an Islamic Governance Centre and the Dubai Centre for Islamic Banking & Finance.
With its central geographic location between Asian and European markets, Dubai has worked hard to establish itself as an integral part of the global trade mechanism. Its central location has also allowed Dubai to become a popular and accessible tourist destination.
The Department of Economic Development has been exceptionally forward-thinking and is moving towards a more streamlined electronic services system in which most aspects of the business set up process is conducted through the internet.
Dubai’s Free Zones
Dubai’s many free zones are another aspect of the city’s growing economy. Established as a way of attracting more foreign investment, free zones adhere to unique laws regarding ownership, taxation, and labor. Unlike businesses in the rest of Dubai, which require at least 51% ownership by a UAE national, free zone businesses can have 100% foreign ownership. Legally, companies based in free zones are considered “offshore” so they are unable to trade within the city without an agent or distributor. Free zones also tend to assist new businesses in the setup process.
Initial Costs Of Setting Up A Business In Dubai
One of the most important steps in creating a viable business plan is understanding the initial costs of setting up a business. Dubai’s tax-free nature is attractive to many entrepreneurs, but it’s important to keep in mind the fees involved in issuing a new trade license. The DED’s website offers a useful tool that allows potential business owners to estimate the fees involved in obtaining their trade licenses.
If you are planning to start a business in one of Dubai’s many free zones, keep in mind that each free zone has different start-up procedures and fees. Many free zones also require that the business owner have a minimum amount of capital if they are establishing the company or enterprise in the free zone as opposed to just opening a branch of an existing company. Another cost of running a business in Dubai or in a free zone is sponsoring your employees and providing them with the necessary visas and paperwork to allow them to reside in the country.
Consider The Costs Of Imported Goods
Trading companies should also consider the future costs of importing goods to the country. Dubai Customs has clear guidelines for the types of goods that can be brought in, as well as the costs of importing those goods. If the company will only be trading within the GCC, customs fees will be less expensive thanks to the newly established GCC common market, which promotes trade and employment among GCC nationals.
For more information on moving overseas, please check out The Expat Money Show with Mikkel Thorup
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