Providing an unrivalled access to the world’s highest potential economies, the UAE has firmly established itslef as a global leader in innovation and as a hyper-connected, pro-business hub between the East and the West. The coutry’s long-standing international outlook, liberal business policies, strong governance and readiness to address the needs of the world of business has catapulted it onto the global stage. It has proven to deliver an efficient, secure, and future-forward network eco-system for accelerated growth. Backed by committed investment in key growth sectors and smart-city development, the city is well positioned to consistently be ranked as the Top 5 global centres for trade, logistics, tourism and finance and is internationally recognised as the dominant financial and trading centre for the world’s Islamic economy.
Coming towards the topic, the United Arab Emirates has risen a remarkable 10th places to rank overall 11th in the World Bank’s 2018 Ease of Doing Business report. The report, which assesses countries based on the openness of their economies and the ease in which companies can do business, ranked 190 nations worldwide in 2018. The World Bank was gracious enough to applaud the UAE’s efforts to reduce economic reforms over the past 12 months, inlcuding the initiative to simplify land registration processes and property transactions. It has also acknowledged that the UAE has eliminated fees for industrial and commercial electricity connections and made improvements to the online registration system for new businesses.
Why an Investor must Invest in the UAE?
When considering doing business in a foreign country, any investor considers a range of commercial issues will influence their decision of setting up a business in a country. The United Arab Emirates could be an attractive hub for investors to locate their business interests for the following reasons;
- The UAE has one of the most liberal trade regimes in the Gulf region and attracts strong capital flows from across the region
- UAE is focused on economic diversification in trade, logistics, banking, tourism, real estate, and manufacturing and provides opportunities in various industries
- The country has well established infrastructure, strong banking system, and a stable political environment
- There are restrictions for full foreign ownership for the non-GCC nationals, but the UAE also provides for a window of free trade zones that can allow 100% foreign ownership and zero taxation regime
- The Emirates also provides a tax favorable environment for most of the industries
- There are a high number of expatriate workers at all level of economy such that the expatriates accounts for over 80% of the work force
- There are no exchange control restrictions and it is possible to have unrestricted repatriation of income and capital
- UAE’s culture is driven by Islamic traditions, however, with over 150 nationalities, expatriates are able to practice their own cultures; and
- UAE provides a safe and secure family environment with one of the lowest crime rates in the world.
Why is the UAE a Good Place to do Business?
The UAE is the 29th largest economy in the world and 4th in the Middle-East. The UAE ranks 11th out of 183 countries in the Ease of Doing Business. The existence of free trade zones with 100% ownership, zero taxes, excellent infrastructure, a relatively stable outlook on the country risks, and a very strategic geographical location almost midway between the east and the west are attractive aspects for foreign investments.
There are a few challenges an investor can face in the UAE while starting a company like; the need for a local sponsor owning 51% of the business (if not in a free zone), ability to enforce contracts, more limited creditors’ rights and options (bankruptcy laws not keeping pace with the economy development), and some inherent risks to the region because of geopolitical concerns.
But, you must also know that advantages of setting up a business in UAE are more than the disadvantages like; the UAE attracts a highly skilled workforce, which is absorbed by the growing number of international companies, professional service firms and financial institutions. Expatriates enjoy tax-free salaries, schools accredited to international standards, a high standard of health care and excellent recreational facilities – including a number of championship golf courses.
Apart from this other business advantages include,
- Ease of getting office space at affordable rates with the flexibility to rent/lease office anywhere
- Flexibility to do business in any part of the UAE
- No restrictions in processing legal documents
- No yearly auditing
- No corporate or personal taxes
- No limitations in getting employment visas and easy recruiting process
- No requirement for minimum capital
- No need for the local sponsor to avail Professional Licenses
In the UAE, relationships and mutual trust are paramount for any successful business interaction and can only be developed through face-to-face meetings. It is important to spend time with Emirati business counterparts and ensure future meetings take place to continue cultivating the relationship. Having connections with people in the UAE is of utmost importance as it can facilitate introductions before attempting to do business in the country. Emiratis prefer to do business with those they know, so appropriate introductions are important in order to establish a successful business relationship.
If you want to start a business in any part of the UAE, we at Business Setup Worldwide can help you with it. Contact us today for more information.