The UAE is a top destination for budding entrepreneurs, attracting business owners from every corner of the globe. On arrival, they’re welcomed by an open and encouraging corporate environment, a world-class business infrastructure and an attractive tax regime.
Until now, these benefits of starting a UAE business could only be accessed by businesspeople over the age of 21. However, following a recent change, the UAE business ownership bar has been lowered to 18.
So, if you’re a young entrepreneur looking to get started in this part of the world, keep reading to find out what the law change means for you. We’ll be looking at these areas:
- What is the commercial transaction law?
- What changes were made to the commercial transactions law?
- How does the new commercial transactions law help young entrepreneurs in the UAE?
- Why the UAE is the best place to start a business
- Business setup in the UAE with Worldwide Formations
What is the commercial transactions law?
The commercial transaction law – or to quote its full title, ‘Federal Law No (18) of 1993 concerning the Commercial Transactions Law’ – applies to all traders, merchants and acts of commerce that take place within the UAE.
The commercial transactions law addresses many areas, including stipulations regarding commercial obligations and contracts, as well as the options in cases of bankruptcy and other business closure. It also lays out the regulations regarding who can start a business in the UAE and the steps required to do so.
In other words, if you intend to work, buy, sell, trade or conduct any form of commercial activity in the UAE, this law applies to you.
What changes were made to the commercial transactions law?
Under the updated commercial transactions law, it is now legal for anyone above the age of 18 to start a business in the UAE and engage in trade.
This change, lowering the age of business ownership from 21, brings the UAE in line with most other jurisdictions around the world. As well as widening the potential talent pool of entrepreneurs that will be attracted to the country, the amendment makes it easier for existing UAE business owners to implement family succession plans.
The age change is just one of many updates to the regulations. At the same time, the law has been changed to provide greater assistance to commercial ventures in digital and technology industries.
Other amendments include updates to create a legal standard for commercial transactions for banks, a change of rules relating to the supervision of financial institutions, and assistance for Islamic banking services.
How does the new commercial transactions law help young entrepreneurs in the UAE?
The updated law helps young entrepreneurs in several ways. For one, it allows them to get started and gain a presence in the business world from a considerably younger age.
For those starting a business straight away at 18, the law change removes the necessity to start up elsewhere before moving to the UAE several years down the line, should that be their preference.
The recent changes to the commercial transactions law also help younger entrepreneurs who are in line to inherit family businesses in the UAE. Previously, older business owners would have been unable to leave a business to anyone under 18. But now, all children aged 18 and above are eligible to legally take over the reins and continue the enterprise.
Why the UAE is the best place to start a business
Strategic global location
It’s often noted that the UAE is within eight hours of around two-thirds of the world’s population by air, but little is said of the opportunity this presents. With direct links from almost every corner of the globe, the UAE is perfect for international business travellers and expatriates who wish to return home on a regular basis.
The UAE is also well-connected from a commercial point of view. With some of the world’s busiest ports and airports on our shores, the country is built for global trade. There are abundant direct links to surrounding markets across the Middle East, Asia, Africa and Europe via land, sea and air.
Fast, simple and affordable setup process
The UAE has long cemented its place as a global business destination, attracting expatriates from across the world for decades.
For this reason, the country’s immigration, relocation and company formation processes are robust, time-tested, and designed with simplicity in mind. So much so that, with the right support, a young entrepreneur can be licensed and ready to trade within weeks.
When you work with a company formation agent such as Worldwide Formations, the entire process is managed for you, as we will liaise with all relevant authorities on your behalf.
Attractive low-tax environment
The UAE is one of just a handful of countries that still levies 0% tax on personal and corporate income across most industries. There are, however, exceptions in industries such as tobacco and alcohol.
Taxes are low elsewhere, too. VAT is just 5%, while 100% customs tax exemptions are available when setting up in a UAE free zone. Other significant free zone benefits include zero currency restrictions and full capital and profit repatriation.
Welcoming and supportive environment
The UAE’s large expatriate community, which accounts for over 80% of the country’s population, is a great indicator of how welcoming the country is to international entrepreneurs.
Business owners out here not only benefit from minimal red tape and supportive regulation, but there are many accelerator, incubator and funding programmes on offer, too. Ultimately, the UAE is built for business, with legislation, initiatives and an environment designed to help entrepreneurs succeed.
Broad and diverse economy
The discovery of oil was most certainly the driving factor behind the UAE’s rapid revolution from a collection of fishing villages to a metropolis. But there is much more to the business landscape out here.
Today, a host of industries thrive, from travel, technology and all manner of trading to healthcare, aviation and construction. The growth of these and other business sectors means that just 30% of the UAE’s GDP is now directly based on oil and gas.
World-class business infrastructure
The UAE ranks highly in the Global Competitiveness Report, listed in the top three in numerous categories. For those who have spent any time living or working out here, this comes as no surprise.
The UAE is a digital-first nation, with near-ubiquitous ultrafast broadband and 5G connectivity, not to mention new and regularly updated road and metro networks. In fact, the bar is set high out here for everything from transport to utilities, businesses centres, digital services and much more.
Business setup in the UAE with Worldwide Formations
The latest change to the law is great news for young entrepreneurs wishing to make their mark in the UAE. Now, they too can benefit from the country’s incredible business environment, strategic location and straightforward company formation process.
However, anyone new to the UAE is advised to take on the process of starting a business with the help of a company formation expert.
At Worldwide Formations, our vastly experienced team can help you set up a business of any type in the UAE. Thanks to their local knowledge and international experience, our consultants are best placed to navigate any complexities that may arise throughout the process.
For more information and a personalised quote, please visit Worldwide Formations.