Summary
Dubai is one of the best destinations in the world to start a business, thanks to its attractive tax environment, strategic location, and business-friendly regulations. However, many scams and frauds exist. Seeking help from a professional is essential to avoid pitfalls and ensure a smooth setup. In this article, we explain why Dubai is the best option for entrepreneurs and how to get started effectively.
Advantages
Tax Benefits
One of the biggest attractions of Dubai for entrepreneurs is its favorable tax system. There is no personal income tax, and corporate tax is very low (only 9% for companies earning more than 375,000 AED per year). Additionally, in free zones, some businesses can enjoy tax exemptions for several years.
Strategic Location
Located at the crossroads of Europe, Asia, and Africa, Dubai is an ideal commercial and logistical hub. Dubai International Airport is one of the busiest in the world, offering direct connections to hundreds of destinations—a major advantage for entrepreneurs looking to expand their market internationally.
Business-Friendly Environment
Dubai facilitates business with streamlined regulations, fast company formation processes, and a modern banking system. The government encourages foreign investment with incentives and state-of-the-art infrastructure.
Can Foreigners Open Businesses in Dubai?
Yes! Unlike other Middle Eastern countries, Dubai allows foreigners to own 100% of their business without needing a local sponsor, especially in free zones. This recent change makes Dubai even more attractive to international entrepreneurs.
Different Categories of Business Licenses in Dubai
Dubai offers several types of business licenses depending on your activity:
- Commercial License: For selling and distributing products.
- Industrial License: For production and manufacturing.
- Service License: For consulting and professional services.
- Free Zone License: For businesses operating in free zones with additional benefits.
A Small Guide to Starting a Business in Dubai as a Foreigner
Determine Your Business Type
Before starting, decide if you want to operate in a free zone or on the mainland. Free zones offer benefits such as 100% ownership but may restrict business activities to outside the UAE.
No More Need for a Local Sponsor
Recently, foreign investors can own 100% of their business, except in certain strategic sectors. This eliminates dependence on a local partner.
Register the Trade Name
Choosing a trade name is crucial and must comply with rules set by the Department of Economic Development (DED).
Obtain a Business License
Once your business activity is defined, you must obtain an appropriate commercial license. Working with an expert can accelerate the process.
Open a Business Bank Account
Dubai offers many banking options, but requirements vary. Getting professional assistance helps avoid unnecessary delays.
Rent an Office Space
Some licenses require a physical address. Free zones often provide flexible office solutions.
Obtain Visas for Your Employees
If you plan to hire employees, you will need to sponsor them and obtain work visas.
Register for VAT
Since 2018, businesses with a turnover exceeding 375,000 AED must register for VAT.
Comply with Local Laws and Regulations
Dubai’s business laws are strict. Seeking professional help prevents costly mistakes.
Beware of Scams!
Many unqualified “consultants” offer services at low prices but may lead to legal troubles. It is essential to work with a recognized professional to avoid any unpleasant surprises.
By following this guide and working with the right people, you can start a business in Dubai with confidence. Wishing you a successful entrepreneurial journey!
