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Starting a business in Dubai?
Why Dubai?
With an enviable business culture characterised by innovation, good entrepreneurship and the economic benefit of free-zones (detailed later), it’s safe to say Dubai is thriving. In fact, it is now a general truth that the Emirate state is the commercial epicentre of the region. Known for its efficient admin, infrastructure and sleek licensing, Dubai has no problem in attracting the foreign investor and businessperson. Indeed, it remains unequalled as one of the most sought-after and enticing destinations to explore business opportunities.
The geographical locality of Dubai to the resources and markets of its neighbours make it an even more prosperous choice for an expanding or newly-formed company. The government actively encourages a free and harmonious economic policy and has fostered a salient international reputation, inspiring both national and foreign finance in almost every area of economic activity.
Dubai is favourable for its permissive approach to business and commerce, exemplified by its liberal standards and regulations. An international company has a handful of options to choose from when setting up in the Emirate state. Besides trading, companies often create offices in Dubai in order to liaise directly with clients and further expand their limits of operation. Having a permanent presence in the Middle East is generally considered an astute business move, with businesspeople in the region generally preferring to deal with locally based companies.
What is the currency and exchange rate?
The currency used in Dubai is the United Arab Emirates Dirham (AED).
The exchange rate is currently £1 to AED 7.
How is the climate/weather?
With blue skies and sunshine throughout the year, Dubai enjoys a dry, sub-tropical climate. Temperatures can reach up to 45C (113F) during the peak months (June - September) where humidity levels are also high. Temperatures wane only slightly over the rest of the year, with the coolest period being between December and March. Rainfall is modest and mostly occurs during the cooler months.
What is the population?
The current population is approximately 1.7 million, set to increase to 3.5 million by 2010. 80% constitute expatriates: Arab, Asians, European, among others.
Is Dubai tolerant and permissive?
To dispel any myths or confusion with other Arab states, Dubai, and the UAE in general, is a very liberal region. There is a very social scene in Dubai. Freedom to worship is allowed in all religions, and various churches have existed in Dubai for many years. Foreign newspapers, magazines, TV, films and DVDs are openly available. Alcohol is allowed to be consumed at home, in hotels, and on licensed club premises (as in the West). Women can drive and move about freely and unaccompanied.
What sort of opportunities are there in Dubai?
Dubai’s economy boasts an ambitious combination of cost, commerce and environmental advantages that make an ideal and appealing investment climate for local and foreign businesses. Indeed, these benefits not only pit the Emirate state as the Gulf’s leading multifunctional business centre and regional hub-city, but also accentuate it as one of the world’s most virile and progressive economic markets.
With its quaint commercial and maritime traditions, Dubai is continually acknowledged as the region’s leading trading hub. The Emirate state has become a vital location for numerous flourishing industries and activities, including:
Meetings, conferences and exhibitions
Travel and tourism
Corporate regional headquarters
Regional transport, distribution and logistics centre
Banking, finance and insurance
Information and communications technology
Manufacturing
Business and industrial consultancies
Media (production, publishing, etc)
This is all a result of Dubai’s astute foresight, innovative facilities and infrastructure, and its government’s favourable economic policies. Eager to diversify its economy and abate its dependence on declining oil revenues, Dubai is stomping a discernable footprint as the region’s premier international business centre. Why not become a part of this economic Cinderella story?
What Are Dubai’s Key Advantages?
1. Open and Free Economy: Dubai’s economy has remained open and free to attract investors and business. The control and regulation by the government of private sector activities is minimal. Perhaps most appealingly, there no direct taxes on corporate profits or personal income (with the exception of oil companies and some branches of foreign banks). Customs duties are low at 4% (with many exemptions); 100% repatriation of capital and profits is permitted; there are no foreign exchange controls, trade quotas or barriers; and a stable exchange rate remains between the British Pound and the UAE Dirham (as outlined earlier). Also, relaxed visa policies allow a painless import of expatriate labour with a varied level of skill from across the world.
2. High Standard of Living: Dubai is renowned for its excellent living conditions, having invested unsparingly in real estate like hotels, residential and commercial properties, and recreational and leisure facilities. Additionally, many social and environmental factors have contributed to Dubai’s high standard of living, making it a paradigm for emulation: excellent infrastructural facilities, low crime, clean environment, tolerance and cultural diversity, cosmopolitan lifestyle, contemporary public administration, accessible range of consumer goods and services, mild winters and white, palm-lined sands.
3. Enterprising Cost Structure: International businesses relocating or establishing in Dubai can acquire substantial cost benefits not commonly available internationally.
These include:
No foreign exchange controls
No trade barriers or quotas
Competitive import duties (4% with many exemptions)
Competitive energy costs
Competitive real estate costs
Competitive financing costs and high levels of liquidity
No taxes (except for oil companies and some foreign banks)
4. Political and Economic Stability: As a member of the UAE, Dubai benefits from a low-crime rate and socio-stability. Additionally, the UAE is financially and monetarily sound. The Emirate’s advancing capital markets are built on the foundations of cutting-edge technology and grounded regulatory systems. The government, to reiterate, has an admirable commitment to business and lenient economic policies. The UAE gains from constant and balanced industrial relations. And finally, there is a distinguished legal structure for business and an unequivocal set of ownership rules.
Foreign business is allowed ownership rights of up to 49% for limited liability companies established in Dubai, and up to 100% for professional companies, branches and representative offices of foreign companies and free zone enterprises.
Eminent Infrastructure and Service Sector: Dubai’s well-thought strategy of investing widely in transport, telecommunications, energy and industrial infrastructure has allowed it to maintain one of the most impressive infrastructure facilities in the world. Its features include a network of seven industrial areas; a business park; prosperous, specialised free zones; two high class seaports; a major international airport and cargo village; a modern highway network; state-of-the-art telecommunications; reliable power and utilities.
This is all complimented by an integral service sector, which includes shipping, banking and finance, legal firms, hotels, schools, shopping centres, hospitals, and more.
What Are Free Zones?
A free zone is an exceptional area of a country where standard trade practice and regulation, such as tariffs, taxes or trade barriers, are made redundant or lowered for the purposes of enticing new businesses and investment, generally from overseas.
Internet City Free Zone
As the Middle East’s largest information technology infrastructure, Dubai Internet City is designed to accommodate the business development of ICT (Information and Communications Technology) companies. The ‘City’ has grown so expeditiously that new businesses are joining the 800-strong community on a daily basis. Neighbours include Microsoft, IBM, Dell, Compaq and Sony Ericsson.
Internet City is the Middle East’s largest IT infrastructure, and boasts the largest commercial Internet Protocol Telephony system in the world. Dubai Internet City is a strategic base for businesses targeting emerging markets in a vast region extending from the Middle East to the Indian subcontinent, and Africa to the CIS (Commonwealth of Independent States) countries, covering roughly 1.6 billion people.
As a free-zone, it offers 100% foreign ownership, a high-grade of business-to-business interaction and invaluable networking opportunities.
Dubai Media City Free Zone
Strategically located at the crossroads of the Middle East, Africa and South Asia, Dubai Media City is the region’s media hub. Every area of media and creativity is covered here, from publishing to advertising to music to journalism, and the environment has been specifically cultivated to suit and benefit the needs of the industry.
The Media City’s intention is to create and sell a world class enabling environment for the media industry. Their objective is to entice and nurture businesses from specific areas of the media /entertainment industry.
Jebel Ali Free Zone
This Free Zone really defines the brilliant entrepreneurship of Dubai. Firstly, there is no tax. Secondly, as a business, you are under no duty to recruit a local partner; staff maybe recruited from anyway. Features include ports, warehouses, office space, and, typical of Dubai‘s commitment to business, newly built factories ready for use.
This keeps being repeated, but necessarily so, the strategic location allows ready access to 1.6 billion potential clients and customers in the neighbouring regions.
Unlike the outside of Jebel Ali, which requires foreigners to go into business with local companies or sponsors, there is no such requirement in this Free Zone. Essentially, you do as you please.
Knowledge Village Free Zone
Knowledge Village was set up 8 years ago as an autonomous offshoot of the Technology and Media Free Zone. The Village was fundamentally designed to complement its parent Free Zones; it provides the facilities to train and educate the potential workforce of the future. It is focuses primarily on media, communications and information technologies. It currently nurses 200 companies, including universities and general academic institutes, including research, training and development facilities.
By nurturing the region’s talent, Knowledge Village is cementing the UAE’s status as the enviable, runaway economy.
Dubai Airport Free Zone
Dubai Airport Free Zone is located within the area of an airport, so the activities allowed are generally limited to high-value, low-volume products that require a rapid access to markets. Therefore, the Airport Free Zone is a perfect spot for electronics, gadgets and IT products, luxury items, jewellery, and general activity related to aviation.
The Zone is structured to meet the requirements of companies setting-up and established at the airport. It offers attractive incentives including 100% foreign ownership, corporate tax immunity for 15 years (renewable for an additional 15 years), no income tax, freedom to repatriate both capital and profits, full exemption of import duties, and no currency restrictions.
Immigration and Visas
Do I need a visa to go to Dubai?
You will need a visa to enter the UAE. However, the authorities have taken steps to make this a straightforward and hassle-free process. If you are a citizen of one the countries listed below, you will not be required to obtain a visa before your arrival at a UAE airport:
UK, France, Italy, Germany, Holland, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Finland, Spain, Monaco, Vatican City, Iceland, Andorra, San Marino, Liechtenstein, USA, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia, South Korea and Hong Kong.
The issue of passport stamps is very contentious in the Middle East. Israeli nationals are not permitted to enter Dubai or the United Arab Emirates. Likewise, anyone with a passport recently stamped in Israel may also have trouble.
What are the types of visa?
Entry Service Permit
Entry Service Permits apply to these listed categories and their families:
company manager representatives, sales managers, account auditors, delegates carrying out commercial activity, consultants requested by UAE companies to deal with urgent matters.
This visa is valid for use within 14 days from the date of issue. Unfortunately, this permit is not renewable.
Visit Visa
Visit Visas apply to tourists and businesspeople who wish to spend more than 14 days in UAE. This visa necessitates sponsorship of any UAE resident or any company or hotel licensed to operate within the UAE. A refundable AED 2,000 guarantee from expatriates who wish to sponsor family and/or friends is charged.
This visa is valid for entry within two months from its date of issue. It is valid for 60 days and is renewable for up to 90 days (at a charge of AED 500).
Multiple Entry Visas
These are issued to businesspeople who have a working relationship with either a multinational or reputable local company, and who are familiar with visiting the territory. This visa is valid for six months from the date of issue and the duration of each stay is 30 days. It is not renewable and currently costs AED 1,000.
Banks of Dubai, UAE.
Abu Dhabi Commercial Bank
Abu Dhabi Commercial Bank Building,
Salam St.
P. O. Box: 939, Abu Dhabi
United Arab Emirates
Tel : +971 2 6210090
Fax : +971 2 6443384
www.adcb.com
Arab Bank
Ittihad Street
11363, Dubai
Tel: +971 4-2950845
Fax: +971 4-2955974
www.arabbank.ae
Barclays Bank
First Floor
Building 4
Emaar Business Park
Sheik Zayed Road (Interchange 5)
PO Box 506504, Dubai, UAE
Tel: +971 4-362 6888
www.barclays.ae
Commercial Bank of Dubai
Mankhool Street
PO Box 2668
Dubai
Tel: +971 4 3523 355
Fax: +971 4 3527 655
www.cbd.ae
Central Bank of the UAE
PO Box 854
Abu Dhabi
Tel: +971 2-665 2220
Fax: +971 2-666 7494
www.centralbank.ae/index.php
Citibank UAE
www.citibank.com/uae/homepage/index.htm
Dubai Bank
Tel: +971 4-336 5555
www.dubaibank.ae
Emirates Bank
P.O. Box 91250
Abu Dhabi, UAE
Tel: + 971 2 555 5303
www.emiratesbank.ae
Emirates Industrial Bank
6th Floor, Arab Monetary Fund Building
Corniche Road, Abu Dhabi
P.O. Box 2722, Abu Dhabi
Tel: +971 2 6339700
Fax: +971 2 6319191
Email: projects_auh@emiratesindustrialbank.net
www.eib.ae
HSBC UAE
PO BOX 66
Dubai, UAE
Tel: + 971 4 2288007
Fax: +971 4 228 1714
http://www.hsbc.ae/1/2/home
Lloyds TSB Bank
Po Box 3766
Dubai, UAE
Tel: +971 4-3422000
Fax: +971 4-3422660
Email: information@lloydstsb.ae
www.lloydstsb.ae/personal/home.htm
National Bank of Dubai
P.O. Box 777
Dubai
United Arab Emirates
Tel: +971-4-222 2111
Fax: +971-4-228 3000
www.nbd.com
Standard Chartered
www.standardchartered.ae/personal/home/en/index.html
Real Estate Bank
PO Box 51515
Abu Dhabi
Tel: +971 2 6990999
Fax: +971 2 699 0998
Email: info@reb.ae
www.realestatebank.ae/en/default.aspx
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