It’s no secret that Dubai is entrepreneur-friendly.
Tax breaks, lifestyle benefits as well as quick company formation all help make the emirate an attractive alternative to launching a startup in Europe or the US.
But what do these benefits mean for you in real terms, and what should you be considering when weighing up the US & Europe vs Dubai equation?
1. Ease of setup: Streamlined company formation options
Dubai’s status as a hub for new businesses and SMEs means that you can follow a proven blueprint for seamlessly launching a startup, opening a new branch or relocating.
The infrastructure in free zones is likely to offer you an ideal base for your business needs, inclusive of technology, office space, networking and recruitment.
All you need to do is engage with a reputable company formation specialist who will remove the stress and smooth over complex legal issues. This includes assisting with setting up a corporate bank account, obtaining the necessary visas, and generally helping avoid any pitfalls so your company can be up and running as quickly as possible.
Dubai’s startup infrastructure, SME culture, lifestyle, company formation options, and tax breaks all make it ideal for new businesses. The fact that the city is also set to be a leader in business innovation and technology over the next decade gives it a legitimate claim to be the number one location if you are a forward thinking entrepreneur.
Dubai’s startup infrastructure, SME culture, lifestyle, company formation options, and tax breaks all make it ideal for new businesses.
2. Tax benefits: Putting Dubai ahead of the UK and US
One key benefit of creating your business in Dubai are the tax breaks.
With no tax on corporate or personal income, you keep 100% of your profits. As an entrepreneur, this lets you reinvest the money that you would have to pay as tax if you were located somewhere with regular taxation, such as the UK or US.
If you create a company in the UK, you’ll currently pay 19% tax on profits. Although this will fall to 17% in the 2020-21 tax year, it’s still hugely disadvantageous compared to Dubai. For many startups, this level of tax can be the difference between success and failure.
In the US, it’s a similar story. While the tax you pay varies between states, the average business rate is currently 25.7% (ranging from 21% in some states to 29.6% in Iowa).
Both the UK and the US have a long way to go to rival the tax perks of Dubai.
3. Location: Business benefits of being between East and West
Dubai is strategically placed within a four-hour flight of around one third of the global population, making it perfect for trading with both the East and the West. While you may be keen on targeting Western consumers, tapping into markets such as China is increasingly lucrative.
Dubai’s new status as a coffee hub is a prime example of this favourable East/West axis.
The newly launched DMCC Coffee Centre has been created to take advantage of Dubai’s proximity to both coffee producing nations such as Ethiopia, Vietnam, China and India – and the lucrative consumer markets in Europe and the Middle East. Located in Jebel Ali Free Zone, the facility offers state-of-the-art coffee technology and full logistical services.
Over the next decade, you can expect to see the development of more innovative hubs designed to open-up the possibilities of doing trade from East to West – with Dubai acting as a unique facilitator.
4. Future-proof: Benefits from Expo 2020 and beyond
In 2018, legislation resulted in lower business rates, longer-term visas, and the option of foreign ownership of selected businesses outside of free zones.
Dubai’s government remains focused on supporting the entrepreneurial culture which drives the city’s economy. This ensures that you can benefit from ongoing initiatives designed to create SME success both now and in the future.
This entrepreneurial government policy is helping Dubai to maintain economic strength despite global uncertainty, something noted in an expat business survey by HSBC. “The financial benefits of a new life here can be substantial” it states, adding that over one fifth of respondents find their salary has doubled since making the move.
The strong economic future of Dubai is highlighted by Expo 2020 which will create a global focus on the city and new investment opportunities. According to the International Monetary Fund, Dubai’s GDP is predicted to grow at 4% in 2019, an upward trend that is expected to continue into the Expo year.
The strong economic future of Dubai is highlighted by Expo 2020 which will create a global focus on the city and new investment opportunities.
5. Lifestyle: Attracting world-class talent
Dubai was ranked as the number one city for quality of life in the Middle East in 2018 by global consultancy firm Mercer – making it a big draw for startup talent.
Few places in the world can offer you and your employees the tax benefits and startup culture of Dubai, combined with a tropical climate, world-class restaurants, designer shops, exceptional leisure, very low crime rates, and a world-class transport system.
According to the HSBC survey on top expat locations, the UAE comes in fourth for economics, and 16th for experience, with expats themselves citing an increase in earnings, career progression, and quality of life as the three key drivers for relocation.
6. Staying ahead: Getting in front of the competition
The potential of Dubai as a legitimate prototype for the future of both business and city living could help to put your company years ahead of the competition.
It’s important to note that when opening the new Museum of the Future in Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum talked about “adopting technological advancements as a driver for development” and stressed the importance of using AI when it comes to dealing with challenges in the future.
So the city is well positioned to help businesses use new technology to their advantage, become more efficient, develop innovative products, and support the environment. All while maximising profits.
About The Author: Rajesh Ambikan, Director Of Worldwide Formations.
Rajesh Ambikan is the Director of Worldwide Formations, which started with the aim to bring straightforward, no-hassle company formation services to the UAE. Prior to Worldwide Formations, Rajesh amassed many years of experience in UAE company incorporation, having worked as Head of Free Zones and Offshore Operation for Wenham Major, one of the UAE’s oldest and most prestigious accountancy firms. Rajesh also has vast experience of the corporate sector in the UAE, having held C-suite roles for companies in Abu Dhabi, Ras al Khaimah, Fujairah, and Dubai.