Hello, folks! Let me start the series of ‘knows and how’ with a simple question,
“What are the things that strike your mind when you hear UAE?”
Well, the answer is really obvious! You must have imagined desserts, date plants, oil tanks, beautiful women, the ports and big buildings! But, there’s much more to it. Giving a brief description, UAE – the United Arab Emirates is a federation of seven emirates in Western Asia- Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain.
According to figure stated in 2014, UAE’s GDP was 570 billion USD (AED 2.1 trillion) and it’s the second largest country in terms of GDP in GCC Countries. The reason backing up this huge GDP is the emergence of business since the inception.
UAE’s environment for business is quite hassle-free without any complications. The investment and business policies issued by the visionary UAE Government encourage the foreign investment. Interestingly, the UAE government gives incentives to the foreign investors who wish to set up their business in the rich Island country. Surprisingly yet again, there is hardly any taxation or it is non-existent. They believe in the long run of the businesses will enrich the country in every perspective. Now, tell me, who doesn’t want to set up an offshore branch in such a business-friendly country? So, I’m all here to enlighten you up the compiled listicle of important reasons to start your business in UAE.
But before we start discussing the reasons, we will enlighten you about one of the important features of UAE Business Policies – FREE ZONES. The name is enough to give a slight hint about its whereabouts, though. Free Zones are the special areas in the UAE where there are some special customs of Taxation and Import Rules and Regulations. There are a few special features of Free Zones in the following:
• You don’t have to give any corporate tax up to a long term of 50 years.
• There is a complete exemption of the import and the export taxes.
• You can possibly have the complete foreign ownership of the company.
• You will always get the support for in-house activities of the company.
• Lastly, you are exempted from personal income taxes too.
There are around 35 free zones spread across the seven emirates of UAE and Dubai Airport Zone is being in the top of the list of fame. Now, who won’t take an opportunity to set up business, if extended? What’s your opinion?
Coming back to the main discussion, we will figure out the reasons behind choosing UAE as the hub of business.
1. UAE As Strong And Dynamic Economy
Being the second largest country in terms of GDP among GCC countries, you can understand that the flow of economy is very dynamic which is why it attracts businesses of small startups to world famous conglomerates. UAE economy ranks 28th worldwide among the 185 countries in the Index of Economic of a recent edition. It attracts the companies of the entire world to come and set up an offshore branch. UAE having a dynamic environment for the businesses because of its transparency and favorable business climate and a high degree of political stability. According to the WEF Global Competitiveness Index, UAE is considered as the innovation-driven country. Holding other awards and designations, UAE serves the best business climate to the company for the mutual growth.
2. You Don’t Have To Pay A Single Penny As Tax
As already discussed, the corporate and personal taxes in the UAE are very low or non-existent. This gives the employers and employees to have a mutual profit with a better margin. The UAE tax framework is the least demanding in the world and is always favorable to the businesses which are highlighted by Paying Taxes compiled by a few of the biggest Audit Companies. Even if you have to pay the minimal taxes, then only oil, gas and petrochemical companies and branch office of foreign banks need to pay. For the one with jobs there, they also don’t have to pay the income taxes whereas just 5% of the salary of a UAE employee is cut for the pension policies. That sounds too easy-going, right?
3. Legal Framework Is Minimal
Unlike in other countries, it takes a hefty amount of time to set up a business especially if you’re a foreigner. But, in UAE, the visionary government issues easy-going rules and regulations except for the criminal laws for the businessmen especially for the foreign investors who want to set up business in UAE. The paperwork is really minimal, unlike other countries where you have run here and there to acquire a single stamp on a paper. The procedures are generally fast tracked and it makes easy for the person who wants to land there with his business.
4. Manpower Is Omnipresent
If your business is based on labor work, you need to find a way out to set up your business in UAE. Due to the liberal labor policies consisting of higher wages and non-existent taxes, people tend to migrate to UAE as flocks for a job opportunity. You can find both the kinds – unskilled and skilled labors in UAE. The national workforce consists of more than 1.4 million people who are employed in UAE and the crowd of Emirati is excessively low.
5. Physical Infrastructure Plays An Important Role
Undoubtedly, the UAE’s physical infrastructure is extremely well developed. We all know that the rapid growth saw the construction of tourism, residential, commercial and industrial facilities. UAE is a very well-connected with every common need of power, water, housing etc. are served to everyone. This calls for the unemployed bunch of people immigrating to UAE for survival and indeed, they get a better life.
6. Open Trading Hub
Being a member of World Trade Organization, UAE serves it purpose very well by encouraging open trade and stable trade relations with the companies of foreign countries like North America, Europe, and South Asia. In fact, Dubai is the meeting point of the east and west as far as the foreign trade is concerned. Along with it, UAE is a point of tourism and hospitality and hence, it gives scopes to the hotels, tourism businesses a boom.
7. Last But Not The Least
The main attraction of the UAE is their Free Zones which we have already discussed. The encouragement of foreign investments and acquiring in the free zones make it better and beneficial from the business point of view. Hence, UAE-based businesses with the exemption of Free Zone companies, enjoy duty-free trade in UAE.
A lot of information, right? Yes, we look forward your betterment and we would be more than happy if these would be of some help for you in the coming future.