Dubai has proven to be a solid proposition for investors and businesses, thanks to a robust legal framework, a business-friendly regulatory environment and strong corporate governance.
Laws and regulations are transparent, flexible and designed to preserve the rights of organizations and individuals. Additionally, Dubai’s global trade continues to thrive.
Dubai Free Zones and incentives for foreign entrepreneurs
Dubai Free Zones, a pioneering and trade-friendly environment, offer 100% foreign ownership, tax-exempt policies, low-cost business start-up and renovation facilities.
This means that companies of all sizes, from publicly traded to startups, seek to make the most of Dubai’s strategic position as a gateway to the economies of Europe, the Middle East, Africa and South Asia.
Ease of doing business and initiative for success
According to the latest World Bank rankings, the UAE is the leading country in the Arab world for “Ease of doing business”. As of 2020, Dubai was ranked 8th as a global financial center according to the Global Financial Centers Index and 6th globally in terms of reputation.
These figures reflect not only the ease of starting a business, but also the strong commercial and industrial network, and the multi-sectoral efforts that have been made to increase efficiency.
Smart Dubai Office has launched more than 130 initiatives in partnership with government entities and private sector organizations.
Among the most important initiatives we mention Dubai Data Initiative, Dubai Blockchain Strategy, Dubai A.I. Roadmap and Dubai Paperless Strategy, all aimed at making business activities more efficient, effective and less time consuming.
The smartest city worldwide, AI and IoT development
Dubai has set itself the ambitious goal of becoming the smartest city in the world. And savvy entrepreneurs have realized that the region has become highly attractive internationally for technology-based businesses.
According to the data reported by the latest Smart Cities Index, Dubai is among the top five cities in the world that use technology to improve the lives of their inhabitants.
The emirate takes full advantage of emerging technologies and initiatives such as Blockchain, Artificial Intelligence (AI) and Internet of Things (IoT) to make business more personalized, smooth and impactful.
The future belongs to those who can imagine, plan and implement it. Dubai is built for business and offers a safe and secure environment that continues to attract businesses from all continents.
Why is Dubai an attractive destinations for start-ups and multinationals
The adoption of international best practices, the introduction of tax incentives and the robust regulatory framework have made Dubai a popular destination for start-ups and multinationals:
Robust regulatory framework attracts businesses
One of the factors that has most contributed to the success of the financial sector in Dubai is the range of proposals offered to investors, venture capitalists and companies, thanks to the robust legal structure, pro-business regulations and solid corporate governance.
Once established in Dubai, companies can take advantage of a low-tax environment. What’s more, the emirate is the perfect location to benefit from the rapidly growing demand for financial and business services.
The best regulators
To maintain high standards in all sectors, Dubai has set up several regulators and agencies in fields such as telecommunications, finance, real estate, development, healthcare and energy.
A recent example of world-class standards sees the establishment of the Roads and Transport Authority (RTA), awarded the Green Apple Award for Environmental Best Practice in the Middle East by the UK’s The Green Organisation.
Regulations in Dubai and Free Zones
According to guidelines released by the government, businesses online or on the territory of Dubai are governed by a number of advanced regulations, while businesses in the free zones of the emirate are regulated by the authorities of each zone.
The entire leadership of Dubai has always placed the emphasis on the need to have regulations for an effective business centre, but also to attract greater investments and send signals of trust to those who choose Dubai to do business.
Incentives in Dubai Free Zones
The following are examples of incentives that make the city of Dubai extremely attractive for foreign investors and entrepreneurs:
The Dubai International Free Zone (DIFC) offers a 40-year guarantee of zero taxes on the company’s income and profits, as well as the UAE’s network of treaties with regulators and central banks to avoid double taxation.
Another initiative provides for zero taxes on corporate and personal income. The details of some initiatives may vary, but the incentives mentioned above apply to almost all free zones in Dubai.
The Dubai Multi Commodities Center (DMCC) has revised its requirements to enhance the ease of doing business.
Among the planned changes: the ability to change the standard Articles of Association and the elimination of the statutory share capital requirement (previously set at $136,000).
The free zone has also introduced the “Officer Rules” mechanism in order to manage the skills and responsibilities of managers, directors and secretaries.
The law on foreign direct investment
Some more recent initiatives include: the Foreign Direct Investment (FDI) Law, which allows 100% foreign ownership of onshore companies, depending on the sector.
Administrative simplification, which allows investors to carry out specific services directly online, from around 120 countries. Cost reduction and government licensing. According to KPMG’s recent report, the cost of “doing business” is declining.
UAE Insurance Authority
Under UAE Insurance Authority regulations, a crackdown that resulted in more than 200 fines imposed on firms and brokers for non-compliance has contributed to greater consumer confidence in the market and a better regulated industry.
Other regulations introduced in 2019 include: life insurance, mutual family guarantees and caps on product fees to promote better ethical standards.
Growth in the Islamic finance sector
For the Islamic finance sector, 2019 was a memorable year. The DIFC has reported a 45% annual increase in Islamic assets, suggesting an increase of 1.5 times greater than in the traditional finance sector.
The robust regulatory framework has certainly contributed to the impressive upward trend of the sector, as well as the optimistic forecasts.