{"id":36420,"date":"2017-07-28T07:06:51","date_gmt":"2017-07-28T11:06:51","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=36420"},"modified":"2021-02-02T13:20:34","modified_gmt":"2021-02-02T18:20:34","slug":"doing-business-in-dubai","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/doing-business-in-dubai\/","title":{"rendered":"Doing Business In Dubai"},"content":{"rendered":"

Doing Business In Dubai<\/strong><\/h2>\n

My name is Timur and I have lived in Dubai<\/a> most of my life.<\/span><\/p>\n

The city is very much an entrepreneurial hub, with a lot of hype, myths, and buzz circulating in the news around it.<\/span><\/p>\n

In this article, I will aim to provide an overview of <\/span>living and doing business in Dubai<\/b> as well as dispelling some common myths.<\/span><\/p>\n

 <\/p>\n

Myth No.1: Dubai = Oil Money<\/b><\/h2>\n

The most common misconception of the country is that there is a rich royal family that pumps oil into infrastructure and business in Dubai appears out of nowhere.<\/span><\/p>\n

This could not be further from the truth. <\/span><\/p>\n

In fact, Dubai has very little oil reserves (unlike its neighboring state of Abu Dhabi), with under 2% of the UAE\u2019s oil production in the Emirate (aka state) of Dubai.<\/span><\/p>\n

This lack of oil has spurred Dubai from early on to be a very entrepreneurially-spirited city with trade, pearl diving, and fishing as traditional means of wealth creation.<\/span><\/p>\n

Today, Dubai hosts 3 very large terminals, a massive international airline (Emirates, which services over 40 million people per year), and the city itself hosts nearly 18 million tourists annually.<\/span><\/p>\n

Besides that, the city is home to 2 very large shipping ports and has great infrastructure for as a shipping hub.<\/span><\/p>\n

 <\/p>\n

Myth No.2: Dubai = Only Rich People<\/b><\/h2>\n

Another common misconception about living and doing business in Dubai is that the country is full of rich people.<\/span><\/p>\n

Well, the city does have a lot of wealthy people, because Dubai offers financial offshore benefits in a comfortable city, however, there is a very large middle class and an even larger labor class.<\/span><\/p>\n

The city does attract a disproportionate amount of high net worth individuals, however, due to a range of factors that come together to form a very strong symbiosis.<\/span><\/p>\n

The Cayman Islands, for example, are unlivable unless you plan to sit by the beach all day and sail on yachts. The country has no infrastructure and there isn\u2019t really anywhere to spend your money.<\/span><\/p>\n

What is more important however is this: in Cayman, you can\u2019t reinvest your money – it\u2019s essentially a stash where you bury your money, not a place where you can actually grow it.<\/span><\/p>\n

The business landscape in Dubai combines within it 4 key factors that have made it such a popular choice as a place of residence for the ultra-rich:<\/span><\/p>\n

    \n
  1. Tax-free<\/span><\/li>\n
  2. Ultra-safe, crime-free<\/span><\/li>\n
  3. Opportunity for investment<\/span><\/li>\n
  4. High standard of living<\/span><\/li>\n<\/ol>\n

    I found this great podcast by The Expat Money Show<\/a> –\u00a0 Laszlo Kiss<\/a> on the best European Passports<\/p>\n

     <\/p>\n

    Reality No.1: Dubai = No Taxes<\/b><\/h2>\n

    Are there really <\/span>no taxes<\/a> in Dubai?<\/strong><\/p>\n

    Well, the formal answer is yes – no income tax. HOWEVER, there are a couple of nuances that must be addressed.<\/span><\/p>\n

     <\/p>\n

    1. Local Sponsor VS Free Zone<\/strong><\/h3>\n

    In Dubai there is a law that 51% of any business must be owned by an Emirati national, however, this does not apply to \u201cFREE ZONES,\u201d where foreigners are 100% owners.<\/span><\/p>\n

    With the \u201csponsorship\u201d system, you essentially find someone who will put his name down on paper and make an arrangement with you for a yearly fee.<\/span><\/p>\n

    This is an informal tax, I guess, however in 99% of cases the arrangement is a fixed-fee, anywhere between $3,000 and $30,000 USD per year, regardless of profits.<\/span><\/p>\n

    The higher cost sponsors are usually more well-connected and can bring benefits of their own.<\/span><\/p>\n

    Free zones are the ultimate goal for anyone looking to offshore in Dubai, however, as they have full control over their business.<\/span><\/p>\n

    There are some activities that are not allowed within free zones or businesses which cannot be set up under free zone trade licenses.<\/span><\/p>\n

     <\/p>\n

    2. Government Fees<\/strong><\/h3>\n

    There are also plenty of government fees that apply to both free zones and onshore businesses, such as:<\/span><\/p>\n