Business in Dubai
A paradise for investors and businessmen is the second name of the city of Dubai. The plans of Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, and the government of the emirate as a whole are reduced, according to their own statements, to create a “safe paradise” here. We must pay tribute to the efforts of the ruling circles and note the unconditional desire to make comfortable not only the conditions for those almost 3 million people who live in the city, but also to attract new expatriates and investments in Dubai.
Of course, the economic climate plays a significant role in this, that is, in other words, the conditions for doing business both by local entrepreneurs and foreign investors. What are these conditions? Let’s start the analysis in order to answer all possible questions as completely as possible.
So, from an economic point of view, the territory of Dubai is divided into free economic zones (free zone). And here it is worth mentioning immediately the main advantage of doing business in the UAE: the absence of any income taxes. It is this fact that attracts businessmen to free economic zones. A free economic zone is a limited territorial entity with a special legal status that offers preferential business conditions to companies registered on its territory with the right to open resident visas. The company receives a commercial, service or production license depending on the type of activity.
By registering a company in one of the free zones of Dubai, founders are exempt from income tax, which becomes the main advantage of the subsequent business process. Such registration involves 100% ownership of foreign capital and 100% repatriation of capital. Trade barriers and quotas do not apply to such a business. Operating in the free zone greatly simplifies the conditions for import and export of goods. It is possible to register various forms of legal ownership: a new company, branch, representative office. The shareholders of the company can be both individuals (one or more), and legal entities. A company may acquire and lease commercial and non-commercial real estate in the respective free zone. In some cases, depending on the type of activity, only a virtual office is possible. The owner of the company, as well as its employees, receive a resident visa, which gives the right to reside in the United Arab Emirates.
All free economic zones of Dubai have their own theme. This means that each free zone registers only companies conducting a certain type of activity. For example, DMCC – Dubai Multi-Commodities Center (Dubai Commodity and Raw Materials Center) issues licenses for trading in gold and precious metals; precious stones (pearls, diamonds, colored stones); energy and related products; plastics and petrochemical products; tea cotton. Dubai Knowledge Village permits teaching, including trainings in the field of IT, media, languages, logistics, management (including individual); tutoring, consulting, research activities; educational support services.
Before registering a company in a particular free economic zone (SEZ), you need to carefully study which one is right for your business.
Typically, companies require a local agent or distributor to conduct business on the local market. Some SEZs expect firms to provide annual audit information. Others require the provision of authorized capital already at the time of registration of the company before obtaining a license. The amount varies and depends on the requirements of a specific SEZ.
Opening a company in the UAE, it is better to follow the path of least resistance and entrust the entire process to consultants with experience. Usually, registering a business in Dubai is a simple and short-lived process, since the volume of bureaucracy is relatively low, and government authorities help, not hinder, the opening and development of a business. The level of corruption in public institutions in the UAE is almost zero. At the same time, do not forget that the UAE is an eastern country, which means that it has its own specifics. In addition, in order to succeed, especially in the initial stages, it is necessary to correctly understand the types of economic zones and types of licenses, so as not to get into trouble. Companies providing business registration services in the UAE usually have enough experience to make the whole process go smoothly and quickly.
Opening a company is accompanied by opening an account. The banking sector in Dubai is vast and has become one of the most influential industries. As a rule, banks are very loyal to customers, the tariffs are relatively low here, and the quality of services at an altitude. Telephone and Internet banking in Dubai is not a miracle, and almost all banks offer such methods of managing accounts.