Trading in Dubai existed over 4000 years ago, asserting to have trade links with Egypt and Indian subcontinent. However, Dubai became a center of trade in the region after the extensive vision of non-oil progressions and the development of Dubai Creek.
Dubai is a member of the World Trade Organization and offers trading companies in Dubai a well-structured business enterprise, safe market space and secure investments options. Setting up a trading company in Dubai also enables steady and open trade relationships, that further makes it easy to enter the global market.
But are these the only things that contribute towards the immense demand among importers and exporter willing to setup a trading business in Dubai? Let’s understand in detail, why Dubai is the best place for trading business.
As per the recent reports, the Dubai Economy’s quarterly Composite Business Confidence Index (BCI) showcased the tremendous growth accomplished by the trading companies in Dubai. Considering all the sectors in the region, the report stated that trading sectors have benefited the most. Further the report also suggested that export markets and projects related to trading are driving Dubai’s economic growth ahead of the year 2020 in Dubai.
Another media report quoted “An assessment of expectations among key economic sectors revealed that the trading sector holds the strongest position among other sectors. It was speculated that the third quarter of 2019 has already witnessed expansion in sales revenue, profits, hiring and purchase orders as compared to other manufacturing and services sectors”, the report added.
Factors that make Dubai the best place for trading business:
Dubai is a major international trading hub and is the center of several regional and global chains – given its favorable geographical position. Dubai is a hotspot for the trade across the world because of its location and offer amazing connectivity. The location serves as a grounding factor for the trading business in Dubai. The strategic location of Dubai supports as an interface as well as a major connecting hub of the century. Dubai is an epicenter for trading in the world that connects Asia, Africa and several parts of Europe.
Trading in Dubai is guided by a well-maintained and served ecosystem. The methodology is determined with supportive measure taken by the governmental bodies. The government understands that trade in Dubai is crucial for the economy upliftment and diversified growth. Hence, they strive to create an ecosystem that is convincible and appealing for trading businesses in Dubai.
The major reason for economic growth is the appealing trading rules and policies of Dubai. The city of Dubai and various other Emirates offer liberal trade regimes. Enhanced market access for the products through multilateral and bilateral trade liberalisation as well as regional trade agreements add value to the trade policies in the region. Moreover, the tax advantages, no import or export duties, no exchange control and limited trade barriers – have motivated several trades to setup trading business in Dubai.
Dubai tax advantages and perks include international trading partners and double taxation agreements that help importers and exporters reduce tax liabilities. The government has always encouraged trading in Dubai and worked towards creating tax beneficial scheme for the trader. With an aim to initiate ground-breaking and innovative measures – UAE has several agreements with many of its international trading partners to prevent ‘double taxation’.
In case taxed, the average tariff rate is only 5%, whereas free trade zones offer additional incentives including exemptions from taxes and duties. However, except for alcohol and tobacco – which is subject to tax at 50% and 100% respectively.
The accessibility and liberty provided to traders to develop- open trade relations also called as free trade policy, inspire the trading companies from around the world to setup trading business in Dubai. In Dubai, traders are eligible to create an open trade relation, that does not discriminate between the imports and exports of a foreign jurisdiction. Trades can voluntarily buy or sell from separate economies and no governmental quotas, charges or subsides are applied.
There are has both monetary and fiscal policy space to boost growth in the near term for the trading sector. However, a recent media report stated that a wide-ranging approach is being prepared to boost direct foreign investment – mainly in the trading sector. The report also states that these strategies with not only surround freezones and energy sectors but also expand various restricted sectors in the region. There will be non-bank and capital market financing options for SME trading companies, which could enhance the private sector growth and promote diversification, said the report.
Profitable Commercial Laws
Setting up a trading business in Dubai is beneficial also due to the numerous profitable commercial laws guiding the region. For example – The Unified Economic Agreement of 1981 (UEA) under the GCC created a free trade area between the GCC states and is compatible with article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994). The free trade area eliminated customs duties and other restrictive regulations on commerce in all trade between GCC states for goods originating in the GCC.
Also, Dubai as well as the whole of UAE is a member of the Greater Arab Free Trade Area (GAFTA), which entered into force on 1 January 1998. GAFTA eliminated all customs tariffs among GAFTA member states as of 1 January 2005. GAFTA covers trade in goods only; however, members are involved in negotiations to create an agreement in trade of services. There various such benefits and UAE has also several agreements for trade, economic and technical cooperation with countless countries.
Relaxed Visa Rules
UAE is a welcoming country and has a multinational population. Sweeping the set of reforms in relation to visa requirements, UAE has recently relaxed visa restrictions and introduced several perks for investor visas. This has been followed up with the introduction of a 10-year visa for highly skilled workers and investors, and this is expected to improve all round confidence among the business community and investors in committing to the UAE market.
Would you like to start a trading business in Dubai?
If you would like to make an investment in the trading sector or want to establish a trading company in Dubai – find out the most cost-effective and easy way with Shuraa Business Setup
Shuraa Business Setup is a leading business setup service provider in Dubai. We have assisted several businessmen and SMEs start trading companies in Dubai and across the UAE.
Speak to our business setup consultancy to know about this most fruitful market. To start your trading business in Dubai, book a free appointment with our experts and business setup consultants today!
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