The onset of the pandemic early last year, without a doubt, unleashed tough times on businesses across the world. However, the health crisis hit Europe’s economy with more severity than its global counterparts. Therefore, several European business giants are not only looking for business avenues in Dubai, but a good number of them are also shifting their entire business operations to the Middle Eastern city. One of the prime reasons being the UAE is among of the top tax-friendly countries for business.
The following column will explore what about Dubai is luring European entrepreneurs.
1. Strategic Location
Besides proving an easy global connectivity through one of the world’s busiest airport, Dubai offers close proximity with suppliers in the Middle Eastern, Asian as well as African subcontinents.
European manufacturers across most industries, including automobile, have been witnessing major supply disruptions due to the on and off lockdowns.
2. 100% expat ownership
Among thousands of business activities allowed in Dubai, majority of them can be solely owned by expats. Therefore, businessowners can have full control over their company’s operational and financial aspects. Furthermore, they can also become residents of the UAE and sponsor their family members as well as staffers.
With recent amendments to the UAE’s commercial companies law (CCL), not only the professional service providers, but also commercial and industrial businessowners can enjoy 100% ownership.
3. One of the most tax-friendly countries for business
One of the primary reasons that lures European entrepreneurs to Dubai is the fact that the city is situated in one of the most tax-friendly countries for business.
In the past two years, the economies in the European Union (EU) have shrunken relatively more than their global counterparts. Although, the levels of their economic recovery vary based on severity of impact, the extent of rebound is slow due to continued or renewed restrictions due to surge in cases. But a major drawback for businesses in EU is the corporate tax levied on business profits.
According to the Tax Foundation, the average corporate tax levied in the Eurozone, comprising 19 member states, is 21.7%, with a low of 12.5% in Ireland and high of 31.5% in Portugal.
In the UAE, however, corporate tax does not exist. Moreover, income tax and sales tax are also not charged. This stark difference in figures is quite enough to explain why more and more European entrepreneurs are looking for tax-friendly countries for business and landing in Dubai.
4. Open for business. Open for tourists
With all safety measures in place, Dubai commendably opened itself for business and tourists within a few months of imposing restrictions. And this worked in its favour as people cooped up in their homes for months due to lockdowns in different parts of the world flocked to Dubai for a getaway. This further led people to believe that the city is conducive for business growth, now more than ever, compared to European cities that continue to reel under what the BBC terms as a “double-dip” recession.
Most recently, the UAE also became the country with the most vaccinated population, having administered more than 21 million doses. This asserts the fact that the UAE is taking all measures to pacify the local business community.
5. Technology & innovation
The young emirate has internationally branded itself as the city of the future. Thanks to its visionary leadership that invests and believes in promoting the latest technological tools across sectors. From implementing artificial intelligence and virtual reality to exploring crypto-currency, Dubai is heading towards making futuristic advancements. Moreover, the pandemic pushed economies in front of a bus, making them realise that digitalisation was no longer a luxury or something to consider later but an unavoidable necessity.
6. Quality of life
Voted one the safest cities in the world to live and work in, Dubai life spells convenience for people from all walks of life. Home to about 10 million people from across the globe, 80% of the UAE residents are expats. There are multiple factors that help Dubai retain its residents — its world class infrastructure, ease of commute, well-organised bureaucracy, affordable lifestyle, and provisions for entertainment.
European expats often call Dubai a luxurious destination offering endless summers they seek. However, those who have never visited may have reservations about living in a Middle Eastern city often portrayed as hot, crowded, unorganised, and basically “unfit” for people residing in the developed nations of the West. Blame the mainstream cinemas that portray the continent in that light. But the quality of life here is no lesser! From the presence of places of worship for all religions to the variety of international brands and options for sports, adventures and wellbeing events, Dubai HAS IT ALL.
In fact, Dubai government’s ‘2040 Urban Master Plan’ aims at boosting a sustainable urban development of the emirate. Therefore, in the next 20 years, the government will seek to advance its residents’ happiness and quality of life to reinforce Dubai as a destination for people from around the globe.
World-class expertise in one of the tax-friendly companies for business
With a smart government in place and a team comprising lawyers, certified accountants, tax consultants, translators, well-connected public relation officers and legal corporate advisors with extensive knowledge of the UAE’s operational framework, Shuraa Business Setup has been helping entrepreneurs start their Dubai journey since 2001.
The one-stop solution provider for all company formation requirements has been receiving about 200 calls every month from Europe based entrepreneurs looking to set up shop in tax-friendly countries for business.
Considering European entrepreneurs might not be able to travel to Dubai for the completion of documentation and procedures regarding their Dubai company formation, Shuraa is taking its expertise and services closer to Europe. Through Shuraa’s new London branch welcoming clients from June 1, aspiring entrepreneurs as well as those seeking to shift base or expand their businesses to Dubai can start their business from the comfort of their homes.
Managing Partner, Shuraa Group