Why

DUBAI IS ONE OF THE FASTEST GROWING CITIES IN THE WORLD

This is the city that has it all. Home to over 200 nationalities and easily accessible from just about anywhere in the world, Dubai boasts pristine beaches, rich Arabian heritage and five-star luxury living. High-end shopping, dining and entertainment are complemented by year-round sunshine and a safe family-friendly environment.

Dubai

Why the wealthy choose Dubai?

Tax haven status
Freehold to all nationalities
Long term residency
Lowest crime rate in the world
Currency peg to the US Dollar
Advanced health care
Sunny weather all year round
American, British & Canadian universities
World EXPO

Snapshot of Dubai

In less than 50 years, Dubai has transformed itself from a local trading community into one of the most inspirational, exciting and successful cities in the world. Its progress continues to make global headlines and it is now an immensely attractive destination for tourists and businesses alike. With a diverse, multicultural population, Dubai offers its residents and businesses a unique environment, enriched with hundreds of cultures and a quality of life and work unrivalled in the Middle East. It is a bustling metropolis with a combination of Emirati heritage, Arabic vitality, Western spontaneity and Asian ambition.

With an indigenous population of just 170,000, the number of Dubai expatriate residents now stands at over 3 million, thanks to its lifestyle appeal and investment incentives. The tax-free policies and penalty-free repatriation of earnings have enormous benefits on both a personal and business level, with outstanding opportunities for private savings and professional profits. As thousands of new businesses are discovering each year, 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. Dubai’s strategic location gives easy access to 2.2 billion consumers, from a unique centralized time zone that combines East and West business hours.

Some Statistics

  • Dubai Population 3.33 million
  • Dubai GDP (USD in nominal terms) 406 billion
  • Dubai GDP per capita (USD) 37,750
  • Doing Business Ranking for UAE 16th worldwide
  • Global Competitiveness Ranking for UAE 25th worldwide
  • Dubai total imports (USD) 230 billion
  • Dubai total exports and re-exports (USD) 310 billion
  • Index of Economic Freedom Ranking for UAE 76.2 (18th worldwide)
  • Stage of Development for Dubai Stage 3 Innovation Driven Economy
  • Human Development Index Ranking for UAE 26th worldwide

Sources: Dubai Statistics Centre, FDI Intelligence, World Bank

Economic History of Dubai

Dubai is one of seven emirates that make up the federation of the United Arab Emirates (UAE). In 1833, eight hundred members of the Bani Yas tribe led by the Maktoum family settled at the mouth of Dubai creek. By the 1930s, Dubai’s population had grown to nearly 20,000 – a quarter of which were expatriates. In the 1950s the creek began to silt due to the number of ships that found it vital for their trade. When oil was discovered in 1966, Sheikh Rashid used the revenue to rapidly develop infrastructure including schools, hospitals, roads, modern telecommunications networks and transport systems. A runway extension that could accommodate any type of aircraft saw Dubai International Airport begin its journey to becoming one of the busiest in history and the largest man-made harbour in the world was constructed at Jebel Ali including a business free zone for foreign investors.

Dubai’s formula for development was becoming evident to everyone – visionary leadership, high-quality infrastructure, an expatriate-friendly environment, zero tax on personal and corporate income and low import duties. As a result, Dubai quickly became a business and tourism hub for a region that stretches from Egypt to the Indian sub-continent and from South Africa to the CIS countries. In the 1980s and early 1990s, Dubai took a strategic decision to become a leading international tourism destination. It is now known throughout the world for its luxury hotels, remarkable architecture, world-class entertainment and sporting events. Such a meteoric rise has led to the city being ranked as the top foreign direct investment destination by the FDI magazine of the Financial Times.

Why Dubai?

  • Lifestyle. With over 202 nationalities represented in Dubai, the city offers a highly attractive social and multicultural environment with a safe, family-friendly lifestyle.
  • Currency peg & stable economy. Dubai’s currency is pegged with US dollar at the rate of AED 3.65 per USD.
  • Best retail. Dubai is a shopper’s paradise, with many international retail brands having a large presence in the city. Dubai was ranked number one in the CB Richard Ellis’ 2011 report ‘Top 20 Cities for Retail’.
  • Pro-business. government Dubai has a highly proactive pro-business government, with the most transparent business regulations in the region.
  • Global headquarters. Dubai plays an essential role as the main base of multinational companies operating out of the Middle East.
  • Connected. Dubai offers a world-class transport infrastructure providing easy access to key international markets.
  • Logistics infrastructure. With its best-in-class logistics infrastructure, Dubai is the world’s third largest re-export hub and has the world’s fourth busiest international airport.
  • ICT leader. Dubai is the regional leader in ICT and telecoms. Mobile phone penetration rate in Dubai is the highest in the world.
  • Confidence & “can do” attitude. 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 previously obscure trading town into a major player on a global stage. This vision continues, and with it, Dubai’s ambition expands.

A Quality 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 recognized 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 man-made marina, the most luxurious hotels, and with over 200 nationalities contributing to the city’s unique culture and community, it is one of the most vibrant global destinations.

A Tourism and Shopping Destination

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. The shopping malls are equally varied, from the high-end Dubai Mall, the world’s biggest shopping complex, to the exotic Dragon Mart, the largest Chinese market outside of China.

Continuous Innovation

Dubai continuously innovates to improve the quality of life of its residents. In 2009, Dubai Metro was opened. It is the longest unmanned light rail network and has the world’s largest underground metro station. With a total of 87 trains, the metro is also the first of its kind in the Middle East. Other public transport also includes high-end buses with air-conditioned bus shelters and an extensive hi-tech taxi fleet giving visitors and residents a constant and varied means of travel across the emirate at any time.

A Residential Destination

Dubai is a highly attractive residential city, with housing and accommodation options that suit every taste, budget and lifestyle. The emirate is now home to millions of expatriates from all over the world, who choose to live in a city with enormous business growth opportunities, an unrivalled lifestyle, a diverse and tolerant culture, economic and political stability, innovation, openness and flexibility. For many expatriates, the quality of life in Dubai is unrivalled.

Legal Framework

Legal framework 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 UAE to open its property market to foreign ownership, followed by Abu Dhabi.

Company Law

On December 4, 2011, the UAE Federal Cabinet has approved a new Company Law that paves the way for more relaxed foreign ownership above the existing ceiling of 49 percent in the future. In addition, the new law allows for a simplified process of starting a business in the UAE and strengthens protection of shareholders. A new FDI law is also in the works and, when announced, will make the investment environment even more attractive.

Intellectual Property Rights

The UAE is a regional leader in the protection of Intellectual Property Rights, with continuous improvements of copyright, trademark and patent laws. The rate of software piracy in the UAE is regarded as one of the lowest in the Middle East and Dubai is acknowledged as the best performer.

Corruption and Bureaucracy

Corruption is not part of the UAE business culture, and the country was rated at an impressive 28th out of 180 nations in Transparency International Corruption Perception Index. The UAE has also undertaken measures to reduce red tape surrounding foreign investment approval processes. The number of procedures has been cut dramatically and automated services introduced by Dubai Government’s Department of Economic Development (DED) enable investors to apply for businesses online and check the status of their applications by phone.

Physical Infrastructure

The UAE’s highly developed network of roads linking all seven emirates is the major means of business and leisure transport, although with a large percentage of the country’s international trade conducted by sea, all seven emirates have modern port facilities. Dubai dominates the cargo and re-export markets thanks to the size and sophistication of its two ports, Port Rashid and Jebel Ali Port. Despite being the second port in Dubai, Port Rashid is still one of the busiest in the Gulf region with 35 berths. The massive Jebel Ali facility has 63 berths and includes an economic free zone. Dubai is also home to two major airline carriers, Emirates Airlines and Flydubai, the world’s fastest growing start up airline.

Labour force

It is easy and cost effective to employ both UAE nationals and expatriates, with wide access to a skilled and experienced workforce. UAE governments from across the seven emirates continue to invest heavily in training the national workforce to play a greater role as competitive members of the UAE.

Access to Financing

UAE banks are more active in lending to private enterprises than their regional counterparts and offer a greater variety of financial products and services. The low cost of borrowing in the UAE is yet another of the highly attractive benefits for companies looking to begin or expand their operations in the Middle East. The ever-increasing support for small and medium enterprises (SMEs) goes from strength to strength in Dubai. Several ongoing financing and non-financing programs are designed and implemented by SME, an agency under the Dubai Department of Economic Development tasked with improving SMEs access to bank lending.

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, identify and support strategic sectors, and provide essential administration services to domestic and international investors and businesses.

Free Zones

To support the growing foreign investment in Dubai, the government has created several ‘Free Zones’ 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 in Dubai.

Open Trading Hub

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

Local taxes

Corporate tax: Only banks and oil companies pay corporate tax. Net taxable income of foreign banks is subject to tax at a flat rate of 20 per cent, implemented in Abu Dhabi and Dubai. Alongside all the other benefits enjoyed by companies operating in the free trade zones, there is no corporate tax for 50 years (a concession that is renewable). There are no withholding or capital taxes. Business properties pay a municipal tax set at 10 per cent of annual property rental value. Double taxation agreements exist with a number of countries, including France, Pakistan, Poland, Turkey, China, Romania, Italy, Egypt, Germany, Singapore, Malaysia, Indonesia and India.

Individual tax: There is no income tax on individuals resident in the UAE.

Value Added Tax: There is a 5% VAT on all goods and services sold in Dubai.

Starting a Business in Dubai

Dubai offers two major alternatives for registering new or existing businesses, either onshore with Dubai DED or offshore in one of its free zones. Whether a company sets up in mainland Dubai or a free zone, all businesses and their employees will pay no business taxes or personal taxes. Whichever location the investor chooses, Dubai is a business opportunity not to be missed.

Starting an Onshore Business

All businesses targeting the local markets of Dubai or the UAE in general are generally incorporated within mainland Dubai. For businesses based in mainland Dubai, non-UAE nationals, including nationals of other GCC states, can register their businesses with Dubai Department of Economic Development subject to the following ownership requirements:

  • Ownership up to 49% Non-GCC nationals, no limit for GCC nationals.
  • One of the main advantages to setting up business in mainland Dubai is the access to the UAE and other international markets covered by various trade agreements.

Starting an Offshore Business

Businesses planning to operate offshore choose a free zone based on the sector they operate in and their type of activities. Each free zone is governed by an independent Free Zone Authority (FZA), which is responsible for issuing the necessary licenses. Various free zones have different minimum capital requirements, as the table above illustrates. In general, three options exist for investors wishing to set up their businesses within a free zone. A business wishing to operate from a free zone can either incorporate a free zone establishment (FZE), a free zone company (FZC) or operate through a branch office of a foreign or local company. Branch offices are subject to a limited amount of administration requirements.

Free Zones

Dubai was the first emirate to pioneer the free zone model, offering foreign businesses attractive concessions and a number of investment incentives, including 100 percent ownership of a subsidiary and zero taxation. There are currently 22 free zones in operation, developed for specific sectors and industries including ICT, media, finance, gold and jewelry and health care. Jebel Ali Free Zone is now one of the world’s largest free zones allowing for 100 percent foreign ownership with no recruitment or sponsorship restraints. There is full corporate tax and customs duty exemption on imported raw materials and equipment, with no levy on exports and imports.

The major free zones in Dubai are:

  • Jebel Ali Free Zone
  • Dubai Airport Free Zone
  • Dubai Internet City
  • Dubai Silicon Oasis
  • Dubai Healthcare City
  • Dubai Biotechnology and Research Park
  • Dubai International Financial Centre
  • Dubai Multi Commodities Centre

Source: Dubai FDI is the Foreign Investment Office of Dubai, part of the Dubai Department of Economic Development