Historically, Europe and the UAE share a strong trade tie, but the relationship gained increased momentum in recent years after the Covid-19 pandemic. Recently, investors, startups and big companies from Europe have shown a renewed interest in the landscape of business setup in Dubai. The European investments in Dubai include a diverse range of business sectors such as tourism, transport, IT, financial services, food processing, e-commerce, real estate etc.
Furthermore, hiring business setup consultants in Dubai will make the licensing process easier for the European entrepreneurs. At a time when the trade ties between the UAE and the EU countries are assuming greater relevance, it’s worthwhile to discuss why the European investors should set up a business here. Read ahead to know more:
UAE’s pandemic resilience
In recent times, the European economy has been faced with an uphill battle owing to the different variants of Coronavirus including the Delta and the Omicron. Many parts of Europe went into a lockdown but the UAE has managed to stay open for most international travellers while keeping the infections low. The UAE currently ranks No 1 in Bloomberg’s Covid Resilience ranking, which ranks 53 countries on 12 indicators including healthcare quality, virus mortality and reopening travel. Many European investors travelled to the UAE leveraging the country’s high vaccination rate and extensive, affordable testing.
Impact of EXPO 2020
Dubai successfully hosted the Expo 2020, in which the European countries were top participants, indicating the country’s Covid resilience. The volume of European investments in the UAE is expected to have increased in the aftermath of Expo 2020. The legacy of Expo 2020 is expected to continue the investment momentum as Dubai has turned the Expo site into a company formation zone called District 2020. However, a full picture of the impact of Expo 2020 is still not available.
Opportunities in Dubai real estate sector
The landscape of business setup in Dubai is perfectly aligned for European investors eying the real estate sector in the emirate. As per a report in Khaleej Times, foreign investors continued their foray into Dubai, concluding the first quarter of 2022 on a high note. As per the report, the market was dominated by European investors during the first quarter. The UK, Italy, and France were the European countries that topped the list of the top investors. Given the renewed demand for properties, business setup consultants in Dubai can help the Europeans to set up real estate-related businesses in the emirate.
New Visa Reforms by the Government
Apart from the Expo and the Covid resilience, the new residency reforms played a huge role in attracting foreign investors to Dubai. The Golden Visa, Green Visa and the visa based on property investments have catapulted the volume of European investments in the country. The Golden Visa provides a 10-year residency for investors, entrepreneurs, specialised talents, researchers, exceptional students, doctors, coding professionals etc.
On the other hand, the Green Visa provides a five-year residency for skilled professionals without the need for a sponsor or employer. Both the visas make it easier for the holders to sponsor their families including children. The long-term residency visas have dramatically transformed the process of business setup in Dubai for European investors.
Taxation is Low in the UAE
The UAE doesn’t impose hefty taxes on companies doing business in the country. So far, the only form of tax in the UAE is the Value Added Tax (VAT) at a rate of 5%. The country, however, will impose a corporate tax on business profits from June 2023. Even then, the UAE corporate tax will be levied at 9%, which is the lowest rate in the Middle East region. Investors can seek help from business setup consultants in Dubai to understand the relevant tax rates.
No Need to Partner with a Local UAE National
Earlier, only free zones allowed the 100% ownership benefit with certain restrictions on local trade. It was mandatory for mainland companies to have a local sponsor holding at least 51% of the shares. Partnering with a UAE national sponsor is no longer a mandatory requirement for foreigners wishing to set up business in the UAE mainland. The UAE scrapped the requirement for a local sponsor effective 1st June 2021. As per the new rules of business setup in Dubai, foreigners can even start a Limited Liability Company (LLC) on the mainland with the owner as a single shareholder.
Invest in Dubai with the Help of Jitendra Business Consultants
We hope the reasons outlined in this article have demonstrated why the European investors must initiate the process of business setup in Dubai. However, investors need to navigate a series of legal requirements to leverage these benefits for which they 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.