UAE — the next big hub for opening your business: 5 major reasons to open a new or relocate your existing business to UAE in 2023

 

UAE - the next big hub for opening your business

5 major reasons to open a new or relocate your existing business to UAE in 2023

In a world that is open to new opportunities like never before in history, business owners no longer need to think small and linger to the conventional ways of building a business. That is the main reason why many start-up project developers are now looking forward to relocating to the UAE, and established foreign businesses open branches all over the country.

 

Middle East oil countries like UAE, Saudi Arabia, and Kuwait are looked at as stable economies that actively integrate new technologies. The UAE is the leader in terms of low taxation rates, the openness of its government to provide for international companies, a multicultural environment, as well as its thriving economy. Forbes includes the UAE in the TOP 10 of the most influential countries in the world today.

 

REASON 1: Dynamic yet stable economy

The COVID pandemic has made a significant global impact on all sectors of business since 2020 but the UAE's economy proved its resilience in the face of the major crisis. As per GlobalData, the UAE demonstrated rapid economic growth despite the decline in the global economy sector. More so, the Government of the UAE confirmed that the growth in the international trade sector in 2021 by as much as 27% does not include oil trade, which indicates that the UAE in today's world is much more than just an oil trade-based economy. The growth of the UAE's international trade is equivalent to 254.1 million USD in 2021.

 

Chart 1. The indicators of economic growth in the UAE from 2012 to 2021.

Source: FocusEconomics

 

The Doing Business project which specializes in analyzing business conditions of various countries, has given the UAE a high rating of 80.9 out of 100 points. This is the best option for companies that explore business opportunities in the Middle East (e.g. Kuwait - 67.4, Saudi Arabia - 71.6). This rating is based on various variables such as ease of registering a company with the authorities, business loan approvals, investment protection, taxation, contract fulfillment guarantee, and other important factors. The national currency is stable and not affected by inflation.

 

Chart 2 demonstrates low indicators of the economic risk associated with investment in business in the UAE by analyzing various factors such as political and legal environment, ecological factors, technology, infrastructure and other. This chart also compares these indicators with regional and world-wide indicators in the same sphere. 

 

 

 

Chart 2. The graphic analysis of the investment risk indicators in the UAE in comparison with the Middle East, Middle Africa and the world.

 

 

The UAE in today's world is associated with low economic risk. Its political and legal conditions, natural environment, and infrastructure are one of the best in the world today. This makes the UAE a new highly competitive hub for international business.

 

REASON 2: Variety of the UAE jurisdictions and their offers: Mainland, Free Zones, Offshores. 

 

Depending on the goals of the international company or startup, the UAE provides structured business territories across the country that offer specified facilities for business execution and development. That includes facilities for manufacturing, IT setup, warehousing, office spaces, and even housing for the personnel.

 

If an international company will operate in the territory of the UAE, facilitate trade at the territory of the country as well as internationally and enter into an agreement with local companies, the best option will be to register in the Mainland. This registration will provide an international company with full support in business activities inside and outside the UAE. There are plenty of opportunities for startups in the country and investors are choosing to show their loyalty by not investing in chosen startup's competitors. In 2021 alone startups have drawn $ 1.17 bln of investment in the UAE.

 

The registration in one of the UAE’s Free Zones allows a company to grow business internationally as well as freely operate at the territory of the selected Free Zone. 

Registering a company in the Free Zone is a highly beneficial enterprise as there are numerous offers, packages, office solutions and benefits available for international companies such as unbelievably low taxation rates and high-class international facilities.

 

For those who choose UAE intending to manage investments, maintaining confidentiality and ensuring asset protection for their business there is a safe and secure offer to register an Offshore Company in the UAE.

 

The most challenging part of the registration process would be to choose the correct jurisdiction to satisfy the specific needs of an international company. There are more than 40 Free Zones in the UAE and each of them provides a specific type of activity. This is an important step that helps in developing a successful strategy and minimizes financial and legal risks associated with moving or setting up a company in the UAE.

 

REASON 3: Simplified process of company registration 

 

The Doing Business project rated the UAE high on the process of ease and assistance in registering the business on its territory. 

 

The process of obtaining a business license is unified throughout the country. The Government of the UAE extends support to international businesses by informing them about the most economically profitable and potentially successful national business sectors. It is possible to obtain relevant information about each emirate individually, as well as about the country's current trends in trade and manufacturing. This highlights the strategy of the UAE to develop the national economy in all the sectors that do not include oil trade.

 

The UAE provides high-quality technology support and automated online services for IT companies, online schools, and e-commerce establishments.

 

The UAE legislation is actively adapted to the needs of modern international businesses. Various efforts are being made and restrictions lifted to ensure the success of any enterprise that will be established in the country at this time.

 

There has been a significant upgrade in the infrastructure in recent years and now the UAE has various business centers throughout the country with office spaces, necessary equipment, conference rooms, technology, and fitness facilities.

 

REASON 4: Country with one of the lowest taxation rates

 

The United Arab Emirates is a country with one of the lowest taxation rates in the world. It does not levy income tax on individuals, citizens or residents. Apart from that, there is significant governmental support in the business sector.

 

The UAE has a Double Taxation Avoidance agreement with 139 countries that simplifies business operations and lifts the weight of international companies operating in the country. This provides significant security and transparency in financial planning and operations.

 

Here is a look at the latest tax provisions in the UAE:

 

1. Value-added tax (VAT).
   Since 1 Jan 2012, the general VAT is 5%. The UAE is included in the TOP-10 countries list with the lowest VAT rate in the world (2023).
   
   
2. Corporate tax - this is a direct tax on the net profit of the companies and corporations. From 1 June 2023, the corporate tax of 9% will be levied only if the taxable net profit exceeds 375,000 AED p.a. (equivalent to 100,000 USD).
   
   It is important to note that the companies registered in the Free Zones can avail of a tax exemption and 0% corporate tax on qualifying income. These benefits are subject to fulfillment of the necessary conditions.
   
   
3. Individual Income tax, as was mentioned before is an area where the UAE residents benefit the most. There is no taxation whatsoever for personal income including salary payments, interest, dividends, royalty, inheritance, gift, luxury tax, capital income and any other source of income. 

 

There are numerous benefits and exemptions provided additionally in the Free Zones that promote and support business development for international companies. The zero tax (0%) is applied on imports and exports, with no charges on customs duty, free income and capital repatriation and other significant comforts.

 

REASON 5: Ease of obtaining a residence permit in UAE

 

Unlike many other countries, the UAE is open to giving long-term resident status to business owners and investors.

 

88.52 % of the population of the UAE consists of expats. English is fully sufficient to comfortably lead a life in the UAE, and knowledge of the Arabic language is indeed optional. The resident status offered by the UAE offers extended benefits to newly registered international entrepreneurs. Here are some of them:

 

1. Residence permit: resident of the UAE is a stable and comfortable status that allows freedom of movement, long-term stay, and exemption from frequent check-ins with the authorities.
   
   
2. Business activity: UAE residents can invest and develop their businesses in a comfortable and supportive business environment.
   
   
3. Banking: the process of opening and maintaining a bank account is simplified significantly for residence permit holders.
   
   
4. Education and health care: UAE residents enjoy a range of educational and medical facilities.
   
   
5. Property: UAE residents can easily purchase and own property in the UAE. 

 

The UAE Government also encourages the relocation of the family members of business owners and provides them with a simple visa process; it ensures that families that relocate to the UAE receive the best health care, education, and comfort. The country is valued for its developed infrastructure, cleanliness, safety, and good customer service. The crime rate is at its absolute minimum in the UAE. Even the hot climate in summer is effectively managed and comfort maintained with the help of innovative technology throughout the country.

These factors make the UAE an attractive option for company owners and startup developers to establish themselves in a stable economy and have international reach and influence that is constantly supported by various government implementations.