It’s well known around the world that the landscape of business setup in Dubai is conducive to making profitable investments. Dubai has added one more feather in its cap, which reasserts its status as one of the best places in the world for Foreign Direct Investments (FDI). Dubai recently received the top ranking in the world for its ability to attract FDI by notching up a record 418 Greenfield FDI projects in 2021.
In this background, it seems timely to list the top factors that make Dubai a top draw for foreign investors. Dubai has made stellar progress in the post-pandemic world thanks to the government’s forward-looking economic reforms and belief to transform Dubai into the world’s best city in the world to live, work and invest. Some of these factors have positively contributed to the city’s ability to attract FDI. Read ahead to understand how Dubai lures more foreign investments.
Ease of Doing Business
Ease of doing business is one of the top reasons for the strong flow of FDI into Dubai. The UAE currently ranks 16th in the Ease of Doing Business Index by the World Bank. As per the World Bank, the UAE ranks with an Ease of Doing Business score of 80.9 out of 100.
Introduction of 100% Ownership Rule
In the early days, foreign investors needed to start a business in the free zones to have 100% ownership of the UAE companies. However, companies incorporated in free zones are allowed to do business within the free zones or internationally. Only a mainland company can have the freedom to trade anywhere in the UAE without restrictions. However, until recently, foreigners who owned mainland firms were required to engage a UAE national as a local partner holding at least 51% of the company’s shares.
This changed recently as the government scrapped the local sponsorship requirement from 1st June 2021. Now expatriate investors are allowed to open companies in the UAE mainland with 100% ownership. The foreign ownership reform has dramatically changed the landscape of business setup in Dubai, giving a big boost to FDI inflows. Consult with business setup consultants in Dubai to know further about 100% ownership in mainland companies.
New Visas for Long-Term Residency
The UAE has witnessed a series of visa reforms providing long-term residency options for foreign investors. In line with this, the UAE government has issued the Golden Visa, Green Visas and visas based on property investments. The UAE Golden Visa offers both five years and ten-year residency for investors, entrepreneurs, specialised talents, researchers, exceptional students, doctors, coding professionals etc. The green visas provide a five-year residency permit for skilled employees without a sponsor or employer. Both visa options allow the holders to sponsor their family including children.
The Entrepreneurial Nation Initiative
The UAE government announced the Entrepreneurial Nation Initiative in November 2021 aimed at improving the prospects of startups and SMEs. The Entrepreneurial Nation Initiative aims to make the UAE home to 20 unicorns, or startups valued at over USD 1 billion, by 2031. The government will support the beneficiaries of this initiative through a series of public-private partnerships. The initiative will support the entrepreneurs to establish startups in the UAE, expand their existing businesses, export products and explore e-commerce sales.
Unique Business Opportunities
Foreign investors can have access to lucrative opportunities for business setup in Dubai covering a wide range of innovative activities. Dubai provides special support for profitable business sectors such as e-commerce, e-gaming, Edtech, Fintech etc. In 2022, Dubai broke new ground by issuing a Virtual Assets Law (Law No. (4) of 2022) to regulate the formation of cryptocurrency businesses. By doing so Dubai has become the first region in the Middle East to issue a cryptocurrency law. Business setup consultants in Dubai can help investors to start a company in any of these sectors.
A Hotbed of Future-ready Innovation
Dubai attracts FDI by providing future-ready innovation for foreign investors. The emirate has already developed strong policies for future technologies including Artificial Intelligence, 3D printing, blockchain, autonomous transport, 5G communication and the Internet of Things. The emirate also strives to create a data-driven economy estimated to generate an additional USD2.83 billion in GDP. Also, Dubai has made good progress in its proposed plan to create the world’s first city powered the blockchain technology. Furthermore, the Dubai government is planning to form a higher committee to prepare the Dubai Metaverse Strategy.
Invest in Dubai with the Help of Jitendra Business Consultants
We hope the reasons outlined in this article provide an adequate explanation of why foreign investors are attracted to the process of business setup in Dubai. Apart from the usual factors, the government has announced a series of new reforms to attract more foreign investments into the country. However, setting up a new business to leverage these benefits involves a series of legal requirements for which entrepreneurs can seek the advice of business setup consultants in Dubai such as Jitendra Business Consultants (JBC).
JBC’s highly qualified company setup experts are well-versed in the UAE immigration laws and Labour laws. JBC offers a one-stop solution for critical requirements such as visa processing, document drafting, company registration etc. We also provide compliance services related to Value Added Tax (VAT), Economic Substance Regulations (ESR), Ultimate Beneficial Ownership compliance (UBO)etc.