Dubai has a diverse population and continuously expanding economy which make it an attractive destination for those looking forward to set up a business in the region. Company formation in Dubai can be tedious and the government has set up stringent rules regarding the type of business an individual or a foreign firm can set up as well as ownership guidelines for different types of businesses.Within the Middle East, Dubai has emerged as one of the most attractive environments for new companies to flourish and sustain.
The Economic Department and the Government of Dubai in general are making every effort to ensure that businesses enjoy an environment that allows owners a fair amount of operational flexibility within a framework of rules and guidelines. Under various business setup jurisdiction of Dubai different types of businesses can be established. However they may need additional approval from specific agencies prior to obtaining their trading license.
Major Benefits of Conducting Business in Dubai
Conducting business in Dubai or in the UAE in general is very attractive due to the following reasons
- No personal income and capital taxes
- No corporate taxation
- 100% repatriation of capital and profits
- No currency restrictions
- Competitive import duties (5% with many exemptions)
- Modern and efficient communication facilities
- Abundant and inexpensive energy supply
- Simple staff recruitment procedures
- Competitive freight charges
- Competitive real estate costs.
- Easy access to both sea and airports.
There is no corporate tax or personal tax in the UAE. The only exceptions to this are oil producing companies and branches of foreign banks. Direct taxation is against the traditions of the UAE and it is highly unlikely that it will be introduced in the near future. There are no exchange controls in the UAE and its currency, the UAE Dirham, is freely convertible. The Dirham is linked to the US dollar, the currency by which oil prices are measured. The exchange rate has remained at Dh 3.675 = US$ 1 since 1977.There are three categories of licenses to conduct a business in Dubai:
- Commercial licenses covering all kinds of trading activity
- Professional licenses covering professions, services, craftsmen and artisans
- Industrial licenses for establishing industrial or manufacturing activity.
Some categories of businesses may require approval from ministries also: for example, banks and financial institutions from the Central Bank of the UAE; manufacturing from the Ministry of Finance and Industry; and pharmaceutical and medical products from the Ministry of Health; branch of foreign company from the ministry of Economy and Commerce. More detailed procedures apply to businesses engaged in oil or gas production and related industries.