5 Reasons to Start Your Business in Dubai

If you are an importer, trader, logistics company or another organization with international reach and activities, consider the business arrangement in a Dubai -free zone. Many things indicate Dubai as an ideal basis for global companies.

1. The international airport of Dubai

The Dubai International Airport (DXB) ensures a smooth supply chain and logistics processes. This highly efficient airport can process 87 million guests (2023 data) and 77.5 million bags, with a high luggage handling of 99.8%. This translates in just 2.4 incorrectly and incorrectly covered bags per 1,000 passengers.

Dubai airport is not only efficient. It also has affordable air freight rates. Because 92 airlines fly from Dubai to 325 destinations, there is a healthy competition between carriers. This helps to keep freight prices under control.

2. The seaports

The name of Dubai as an international logistics hub is well deserved. In addition to the efficient DXB, Dubai has three large seaports: Mina Jebel Ali (AEJEA), Mina Rashid (AEDXB) and Mina Al Hamriyah (Aeham).

Port Jebel Ali is a technologically advanced seaport with three terminals and another on the road. It was built and designed to handle container and freight activities. The tenth largest seaport in the world, it has a handling capacity of 19.3 million 20-foot containers or 20-foot Equivalent units (TEU). In addition, Dubai’s modern and efficient road system provides an excellent connection with Dubai International Airport, other places in the city and the rest of the VAE.

Port Rashid mainly serves as a cruise-tourist destination, able to process a maximum of seven mega cruises-similar to 25,000 passenger. The gate treats non-containerized and break-bulk load and roll-on/roll-off cargo ships.

Port Al Hamriya is an import and export hub that serves the needs of different types of ships, including traditional dhow boats and medium-sized ships. It is close to the local market, so it is a favorite with cattle importers and commercial fishing vessels.

3. Location

Moreover, the location of Dubai in the Middle East, near Europe and Africa companies offers a strategic advantage. Operational from Dubai will take you within four hours of flying from 33% of the world’s population and eight hours of 66%. Therefore, when you operate a clothing store from Dubai, you can considerably expand your international reach.

4. Financial incentives

Dubai does not charge taxes on personal income. In the past, no corporation tax was also charged, but that was changed in 2023. Although the federal corporation tax (CT) has become universally applicable in the VAE, the rate of corporation tax of 9% remains low compared to other important world markets.

The 9% CT rate also only applies to the annual taxable income above AED 375,000. In addition, on the basis of the guidelines released by the Federal Tax Authority of the VAE, companies in free zones can continue to enjoy their 0% corporation tax rate in free income.

Qualifying income must meet certain conditions. For example, it must come from transactions with other free zone entities. Other income can still be considered eligible, as long as the percentage of non-qualifying income is not higher than the mini-limit of 5%.

Free zones in particular offer other tax incentives. They offer a 100% exemption from import and export rights and allow 100% repatriation of capital and profit.

5. 100% foreign ownership

In Dubai, foreign entities can have 100% of real estate in Freehold areas. This is an excellent stimulus to do business in Dubai. Companies can consider putting down roots and planning in the long term because they can have absolute control over their property.

Free zone companies can also be 100% foreign property. This privilege now also extends beyond the free zones, because the VAE has changed its laws to enable foreigners to set up 100% foreign companies on mainland foreign hands, as long as they are concerned with the commercial and industrial activities that are Tagged for 100% foreign property.

Remark: If you purchase the minimum investment amount plus the threshold for real estate, you can request the 10-year or two-year investor visa of the VAE.

Free zone or mainland?

After you have set up a company in Dubai, you must make a choice. Do you have to set up a company in a free zone of the VAE or the mainland (non-free zone)? It depends on your requirements.

Choose the Free Zone option if you do not intend to do business on the mainland of the VAE. Free zone companies may not do business on mainland the VAE, although there are solutions, such as setting up a branch.

Otherwise, put a company on the mainland. If you import coffee to sell to coffee shops and home brewers in Dubai, Bouwt Houses in the VAE and offers accounting services to VAE companies (both in the free zones and the mainland), you must set up a mainland company.

It may be easier to start a company in the free zone. Free zones are under the jurisdiction of free zone authorities. These usually have streamlined procedures for the preparation of companies, with directly available company packages and consultants for business formation.

On the other hand, you need many approvals and permits from the government when you start a company on the mainland. Of course, your free zone company may be subject to government approvals if your business plans keep a close eye on and strictly regulated economic activities.

Beyond Dubai

There are many free zones in the VAE, so the possibilities of your business formation are not limited to Dubai. Business setup in an AJMan free zone is a good option. Ajman has two free zones from which you can choose: Ajman Free Zone and Ajman Media City Free Zone. The emirate may not have an airport for the time being, but the construction of Ajman’s international airport is already underway. Ajman also has a seaport, Ajman Port.

Sharjah, Ras al-Khaimah, Umm Al Quawain, Fujairah and Abu Dhabi also have free zones. All these emirates have their strengths. Sharjah, for example, borders Dubai, so Dubai’s entertainment, recreation and logistics facilities are well within reach. At the same time you can enjoy Sharjah’s relatively lower costs of living and doing business.

Doing business in Dubai

Dubai is an excellent address for your company. If you need a basis for your international activities, you set up a company in a Dubai -free zone. You can also consider free zones in other emirates. If you plan to do business in Dubai and the rest of the VAE, then set up a company outside of a free zone, on the mainland of the VAE.