Doing Business in Dubai | 10 Reasons to Do Business in Dubai

10 Reasons for Doing Business in Dubai follows our earlier post on 7 Reasons for Doing Business in UAE. UAE is a confederation of seven emirates. Each one these emirates provides distinct business advantages for investors. In this series of posts we would try to explore the benefits of different emirates starting with 10 Reasons for Doing Business in Dubai. We will try to follow-up tese posts with a guide to set up business in other major emirates.

Doing Business in Dubai.

In less than 40 years, Dubai has transformed itself from a local trading community into one of the most inspirational, exciting and successful cities in the world. Today it is an immensely attractive destination for tourists and businesses alike.Doing Business in Dubai

With an indigenous population of just 170,000, the number of Dubai expatriate residents now stands at 2 million, thanks to its lifestyle appeal and investment incentives. While United Arab Emirates is home to over 40 free trade zones. Free zones in Dubai outnumber any other emirate in the country. More than 30 free trade zones are located in Dubai. Free trade zones in Dubai offer a large variety of  facilities for all types of business activities. Over the years, these free trade zones have become a major reason in boosting the number of entities running their business in Dubai.

Dubai’s strategic location gives easy access to 2.2 billion consumers, from a unique centralised time zone that combines East and West business hours. Dubai is the perfect gateway between East and West and the preferred hub for the region’s imports and exports market – one of the most lucrative in the world.

So let’s inspect the factors that makes Dubai an attractive business destination in the region. These factors also make doing business in Dubai an intelligent decision.

1. Growing and Diverse Economy.

In terms of its economic performance Dubai (and the United Arab Emirates in general) has been the most successful economy within the GCC region for diversifying away from oil. After the set back during the recession in 2009, the economy of Dubai has come back strongly to post growth during the last two years. Trade, logistics, transportation and tourism accounted for almost 60 percent of Dubai’s GDP in 2011, which grew in total by 3.4 percent and by 4.6 percent by the end of 2012.

Highlights of economic performance of Dubai in 2011 include the below.

  • Increase in trade revenue of 5.8 percent.
  • Increase in exports revenue of 44.3 percent.
  • Increase in manufacturing revenue of 11.7 percent.
  • Increase in transport and communications sector revenue of 2.7 percent.
  • Increase in hotels and restaurants revenue of 13.9 percent.

Official reports show that the average annual inflation stood at a minimal 0.5 percent in 2011 compared to 2010 thanks mainly to a 3.3 percent drop in the prices of housing, water, electricity, gas and other fuels. And in the first quarter of 2012, the price of goods and services decreased by 1.4 percent, compared to the first three months of 2011. This was largely due to even more savings on housing, water, electricity, gas, and other fuels by around 6.2 percent.

2. Legal Framework for Doing Business in Dubai.

Investment laws, regulations and incentives are continuously improving to encourage further foreign investment. This includes the introduction of foreign ownership of land and stocks – Dubai became the first emirate within the United Arab Emirates to open its property market to foreign ownership, followed by Abu Dhabi. While Dubai property market has seen the best and worst of the boom period and a market crash, the sector has reached a stabilisation point. The recent times have shown significant signals of a growth trend. This is yet another positive indicator for doing business in Dubai.

Dubai Free Zone entities enjoy liberal regulations as compared to the businesses registered in Dubai Mainland. More about Dubai Free Zone entities will be discussed later.

3. Physical Infrastructure.

Dubai dominates the cargo and re-export markets thanks to the size and sophistication of its two ports, Port Rashid and Jebel Ali Port. The massive Jebel Ali facility is one of the most modern and busiest ports in the world and has 63 berths. Jebel Ali port facility includes an economic free trade zone (Jafza or Jebel Ali Free Zone Authority – the most important Dubai Free Zone) which is part of the Economic Zones World.  Despite being the second port in Dubai, Port Rashid is still one of the busiest in the Gulf region with 35 berths. These port facilities in Dubai helps it extremely convenient to do business transactions with the Indian Subcontinent, Saudi Arabia, European Union etc.

Dubai is also home to two major airline carriers, Emirates Airlines and flydubai. Emirates is the Arab world’s largest airline with more than 120 destinations and 160 aircraft in 2012, and plans to increase its fleet to up to 280 by 2020.

Emirates Airline A6-EBH

Emirates Airline A6-EBH (Photo credit: Ingy The Wingy)

Fly Dubai is the world’s fastest growing start-up airline. In its first three years of operation, flydubai notched up 50 destinations and plans to double its fleet by 2016, focussing on route expansion in Russia, Central and Eastern Europe and the GCC.

Doing business in Dubai has been made a lot easier by the presence of such world-class infrastructure facilities.

4. Availability of Manpower.

Due to liberal labour policies of Dubai, it is easy and cost-effective to recruit employees from almost any part of the world and this has made it easy for doing business in Dubai. Governments from United Arab Emirates – across the seven emirates – continue to invest heavily in training the national workforce to play a greater role as competitive members of the United Arab Emirates economy – out of the 1.3 million people now employed in Dubai, just 53,000 are Emirati.

5. Investment Support and Promotion by the Government.

Dubai’s Department of Economic Development (DED), which is tasked with setting and driving Dubai’s economic agenda, supports the emirate’s transformation into a diversified, innovative, service and knowledge-based economy to improve the business environment and increase productivity. The DED and its four agencies develop economic plans and policies, find and support strategic sectors, and provide essential administration services to domestic and international investors and businesses for doing business in Dubai.

6. Dubai Free Zones.

Dubai is home to over 30 Free Zones catering to various industrial and business clusters where foreign investors can enjoy 100 percent foreign ownership of their companies.

The absence of income tax for both mainland registered companies and those registered in the free zones remains one of the biggest incentives for foreign companies establishing and doing business in Dubai. Dubai Free Zone companies enjoy easy business incorporation rules, import and export duty exemptions, 100% foreign ownership and many more.

7. Open Trading Hub

Dubai has free and open trade with more than three-quarters of goods entering the emirate duty free through Dubai Free Zone entities. The average tariff rate is just 4 per cent, while Dubai free zone facilities offer added incentives including exemptions from taxes and duties. Dubai’s open-border foreign labour policy has also proved a major reason in the liberal trade regime, allowing private sector businesses to recruit expatriate workers at internationally competitive wages.

8. Quality Lifestyle and Culture of Excellence

Ranked as the top Middle Eastern city in Mercer’s Quality of Life Index, Dubai has become one of the world’s most preferred expatriate locations. Although it is recognised as the fastest growing city in the world, Dubai is also one of the safest. The emirate is home to the tallest building on the planet, the largest artificial marina and the most luxurious hotels in the world. With over 200 nationalities contributing to the unique culture and community of the city, it is one of the most vibrant global destinations.

Doing Business in Dubai

Dubai, United Arab Emirates | Dubai Creek ¦ #1 (Photo credit: Åndrey)

Dubai’s many attractions and experiences combine a fascinating heritage with world-class shopping and entertainment facilities. Year-round sunshine also means plenty of opportunity to enjoy outdoor life.

The tourism infrastructure includes the widest variety of shopping experiences, including exclusive boutiques, value chain stores and the traditional gold and spice souks. Many of the world’s leading retailers choose Dubai as their first ventures in the Middle East. From Bloomingdales, Gucci and Prada to Marks and Spencer, Victoria’s Secret and Monsoon, international retailers have invested heavily in Dubai’s highly fashion-conscious residents.

9. Visionary Leadership

The extraordinary perception and vision of Dubai’s leaders have created one of the world’s most successful and vibrant cities. A belief in the potential and possibilities of the future has lifted this trading town into a major player on a global stage. Be it the first Dubai Free Zone in Jebel Ali or the tallest man made structure in Burj Khalifa, this vision continues.

10. General Advantages offered by United Arab Emirates

Add the general business advantages offered by United Arab Emirates to the above mix, and you have an excellent excuse for doing business in Dubai. These advantages include the following.

  • 0% Taxes.
  • Very Low Import Duty.
  • Double Taxation Agreements of United Arab Emirates.
  • Free Trade Agreements of United Arab Emirates.
  • Strong and Competitive Economy.
  • Strategic Location Advantages of United Arab Emirates.
  • World-class Infrastructure of United Arab Emirates.

Following this post on “Doing Business in Dubai” we will try to discuss topics such as options for setting up business in Dubai, company registration in Dubai, Dubai Free Zone entities etc. If you have any questions or comments please free to post them here.

2 comments on “Doing Business in Dubai | 10 Reasons to Do Business in Dubai”

  1. Pingback: Business Opportunities in Dubai | Doing Business in Dubai

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