UAE game changing investment law promises a new dawn for foreign investors and residents but is it beneficial for UAE free zones? Let’s explore this here.
In a recent announcement by UAE Cabinet, they are drafting a law which will allow 100% ownership to foreign investors in some specific onshore business sectors and a 10-year residency visas will be made available for specialist workers in the fields such as technology and academia. This means that foreign investors can setup business in UAE outside of free zones and own them completely. The law is expected to be introduced in the final quarter of 2018.
Although the purpose of the law is to boost FDI inflows and attract large investments in infrastructure thereby supporting economic growth; UAE free zones will struggle to survive under this new legislation. Why? Because the main and bestselling proposition of UAE free zones is 100% foreign ownership.
At present, any entrepreneur looking to setup business in UAE Mainland cannot own more than 49% of his UAE firm unless he incorporates a Free Zone Company in a specialized UAE free zone. This initiative is therefore a very aggressive move to diversify Arab world’s second biggest economy but according to some experts, this change threatens free zones existence.
According to Dr Habib Al Mulla, Chairman of Dubai law firm Baker & McKenzie, foreign investors’ setup their free zone company primarily so they can enjoy 100% foreign ownership but if this option is available to them in UAE mainland and at a more reasonable cost, they will definitely go there.
Free zones will have to find for themselves another niche so that they can attract foreign investment. Although logistics and manufacturing free zones will prove to be more resilient but others will have to innovate be it in terms of cost or changing their processes such as shifting towards online portal or becoming specialized in some area. UAE free zones will have to offer investor something that mainland doesn’t otherwise they will slowly fade.
There are however some analysts who disagree with the above perspective. As free zones are backbone of UAE start-up community and the number of free zones in UAE is gradually increasing towards 50, this means that they are here to stay. Also, each free zone targets a specific segment to serve and offers not only ownership benefits but also low cost business setup and low tax makeup that particularly suits UAE business startups. Therefore the new move does not threaten their existence.
Abeer Jarrar, Corporate Managing Associate at international law firm Linklaters also sees bright future for UAE free zones despite the legislation. According to him, free zones are significant contributors to the UAE economy and will continue to remain so because apart from ownership, they facilitate entrepreneurs and foreign investors for their company formation in terms of infrastructure and legal environment. Free zones are well known as “one-stop shop” for company formation in UAE. They provide ease of doing business as one does not have to go to Ministry of Labor or hunt around for different documents. So, the demand will only get better as free zones have welcomed this new change and will re-focus their efforts on attracting companies.
The new law is expected to pave the way for greater foreign investment and economic diversification. Company formation in the UAE mainland would definitely see a boost following the commencement of the law.
But, whether the law aims to support certain industries or is a widespread change; we will have to wait till the end of this year. Whatever the outcome, this should be a useful reminder to all the international companies looking to expand in UAE to carefully consider what area they would choose and what structure they would adopt for a particular market and ensure that their agreement with existing partners provides them the flexibility to adhere to new foreign ownership rules.
For more information on business setup Dub
Manufacturing is the largest industry in the United Arab Emirates (UAE) second only to the oil and gas industry. To be more specific, and get the idea of what a significant role the textile industry plays in the country’s economy, one only needs to observe its impact on the GDP and GNP. The textile sector contributes an impressive 10%, which is steadily increasing with each passing year.
Dubai, the most famous and influential city of the UAE, recognized throughout the world for its luxurious shopping malls and Seven-star hotels. The fact that the most affluent people on the planet favor the Emirate as their prime shopping destination for buying luxury products is another feather in its cap. Among the most sought-after merchandise here are designer clothes and textiles. That makes the set up of the textile business in Dubai, a thriving business option for both budding entrepreneurs and seasoned business owners.
Dubai Textile City Free Zone is a joint venture between TEXMAS, Dubai Port, and Customs Authorities. Whose sole purpose is to ease the textile manufacturers, suppliers, and dealers in the Emirate so that they can conduct their business activities without paying any extra added customs. DTC is located in Al Awir Free Zone, promoting the storage of fabrics and unfinished textiles for long periods without spending extra on customs duty, which is currently set at 5%. Dubai Textile City Free Zone also has the absolute support of Dubai Ports (sea and dry ports alike) and Customs. The Customs Authority will assist in handling the visa obligations and requirements proffered by the DTC regulatory authorities. Lastly, the rents and the conditions of the lease are excessively friendly and convenient so that investors who are interested in starting a textile business in Dubai will consider the free zone.
Business setup in Dubai Textile City, like any other Company formation in Dubai Free Zones, is done through a procedure that investors should follow if they want to set up their company in any of the Dubai Free Zones. Although before you start the incorporation process, you need to decide on the type of business entity for your business setup in Dubai.
Exactly like every other Free Zone in Dubai, Dubai Textile City also has its list of business activities that they permit within their bounds. They are as follows –
After determining which business activity your company is most comfortable in and will be most successful in, the next move is to register your company.
After your petition is approved, the DTC Free Zone authorities will grant you with the Certificate of Incorporation and a Trade Business License.
Now that you understand how to start a business in Dubai Textile City Let us discuss a few perks of setting a business in this free economic zone.
The most crucial thing to know here is getting the relevant license for your business to operate under legal bounds. To set up a textile business in the UAE, you require a General Trading License. It can only be obtained when the textile company is registered. It should be acknowledged that Dubai and the other cities where textile manufacturing businesses are set up must obey the International System of Units, which restricts the capacities of textile materials to be produced solely in the metric system. The vendor must also guarantee that the sold products meet the national standard safety and quality laws.
We at KWS Middle East can assist you in setting up a textile business in Dubai. Our Business setup consultants are well-versed with the business incorporation process and legal issues that are involved in it. We can make this whole ordeal hassle-free.
Contact us and book your commitment-free call with our exceptional team today!
The COVID-19 epidemic has led to a Worldwide lockdown and has hit businesses operating in every business sector of any size imaginable. Things that previously seemed to happen only in movies and books have now become our reality. Every government in the world had to make some tough choices concerning the societal health and economic prosperity of their respective country.
Businesses across various sectors have taken to reevaluating their business plans in acknowledgment of the social distancing stratagems( measures) set in place to contain the spread of Coronavirus.
Business divisions like tourism, travel, e-commerce, and hospitality are the worst hit by this global pandemic. However, some businesses are still thriving during the pandemic as they encounter a spike in demand for their products and services.
Surprised right? Well, essential and necessary services like healthcare, food making, and delivery, and pharmaceuticals see an increase in demand even though there is limited movement of humans allowed..
Listed here are some business sectors which are still booming during the COVID-19 lockdown. These business setup in Dubai have witnessed a spike in there demand and are having some trouble in keeping up with a steady supply.
Healthcare is in high demand now more than ever. Due to increasing COVID-19 patients, more beds, more equipment, and more hospitals are in use. The healthcare technology companies that offer home diagnostics and telemedicine service (lets patients to have a virtual consultation with a doctor or other healthcare professionals through remote means) are observing a rush in the number of consumers and queries. Healthcare also is associated with pharmaceuticals. The Research and Development team of all pharmaceutical companies globally are trying to find a cure for the virus. While, at the same time, they are also manufacturing testing kits, medicines namely hydroxychloroquine, paracetamol, and other things that are required by the frontline warriors in combating this pandemic. Therefore, the participation and the contribution of the healthcare sector to the COVID-19 outbreak is unmistakable
People stuck in their homes are only authorized to have limited movement, which is why delivery businesses rendering services during the Coronavirus crisis have seen a considerable spike. With everyone observing Lockdown to prevent the spread of the Coronavirus, last-mile delivery companies that provide fundamental transport products like grocery, foodstuffs, and medicine to their doorstep are undergoing a surge in business.
Read Also: Coronavirus Pandemic and the UAE’s Government Role in Keeping its Residents Safe
Delivering medical specimens by the drone can greatly reduce needless human contact completely in the transport cycle. The drone division has witnessed an escalation in business over the last three months, and industry analysts and experts anticipate this trend to continue. Drone technology that had earlier been utilized to sprinkle pesticides in agricultural fields was famously employed by China to spray disinfectants in public areas and on prevention vehicles driving across affected areas.
Countries, including China, Spain, India, Italy, and South Korea, are utilizing drones to keep an eye on people during the COVID-19 lockdown.
E-Commerce companies like Amazon are delivering the products that come under essential services. They are seeing overwhelming requests from consumers placing online orders for prepared and frozen foods and household goods as they want to avoid the crowded supermarkets and other public places. Nevertheless, one of the primary challenges met by the e-commerce sector is supply chain disruption as they strive to meet increasing demand.
Because many companies are working from home, the communication gap between the employees and employers has to be considered. Video-conferencing, meeting platforms, and other real-time interaction tools are the need of the hour. Platforms such as Microsoft Teams, Zoom, Skype, and Slack are encountering a rise in the number of active users on their platforms.
These business sectors are in demand more than ever. Eventually, the world will revert to how it was before the COVID-19 struck, and then it will be business as usual. But until then, this is the new normal, and we need to adjust our activities accordingly.
How can KWSME help Businesses during the COVID-19 Lockdown?
We at KWS Middle East know that the businesses throughout the world are suffering the most because of this COVID-19 pandemic and the subsequent Lockdown. Because of this, our business setup consultants have devised a start from the home initiative that helps businesses in the UAE. We have enhanced our business setup procedure so that you can register your business setup in Dubai from the convenience of your home. Our experts help you in making decisions that are best for your business in the long run.
In case of any queries, contact us. Our company formation specialists, will be more than happy to resolve your questions.
Being one of the most developed, diversified and extensive region in the entire UAE that offers plenty of business opportunities; it is no wonder Dubai attracts thousands of foreign businessmen and international investors each year for their company setup in Dubai.
The government of Dubai is constantly focusing on developing the business environment to remain competitive in the world and to be the most preferred place to live, work and visit as well as a smart and sustainable city and a pivotal hub of the global economy by 2021.
Read More: How to become an Entrepreneur in Dubai
This is why “instant license service” has been introduced by Business Registration and Licensing (BRL) sector in Dubai Economy DED for ease of doing business and help new entrepreneurs in the process of business registration in Dubai.
DED will issue the commercial license through only one step without the need for the Company’s memorandum of association and the site’s lease contract for the first year only. The site will be transferred and the Company’s memorandum of association will be attached upon renewal of the license.
Here’s how you can obtain it,
When you have successfully completed the process, an instant license will then be instantly in your hand. You are then free to perform your business activities. However, at the time of renewal all the documents will be required from you according to the standards set by DED.
To get the fastest and affordable commercial license in Dubai instantly, contact KWS Middle East. We are one-stop-shop for all your Dubai Company formation needs. Call us at 00971-(04) 871 4313 or email you query at info@kwsme.com.
The UAE is set to save over DH 11 billion by implementing advanced blockchain technologies, according to new reports.
This technology will help the UAE government in saving costs by eliminating 398 million in printed documents and 77 million in work hours per year.
Currently, 80 % of public and private sectors are already using the technology.
The CEO of the Dubai Future Foundation (DFF) Khalfan Belhoul said that,
The UAE has always been a leader in the early implementation of brand new technologies, and this stands true for blockchain as well. Besides that, it is a vital contributor to developing a systematic approach for new technologies.
To keep this tradition of implementing emerging technologies, the UAE government has launched two initiatives, The Dubai Blockchain Strategy in 2016 and the Emirates Blockchain Strategy, in 2018 to advance the penetration of this technology nationwide.
By creating an industry for blockchain, the government is making sure that the region is ready to collaborate with the international markets and industries.
So as to further this cause, the country has hosted multiple conferences and seminars that illuminate the benefits of blockchain to educate its entrepreneurs and business owners.
The UAE government has decided that by 2021, as a part of its strategy to capitalize on the advantages provided by blockchain technology, 50 % of the transactions will be done via the incorporation of the blockchain.
Furthermore, according to the study, the government will be faced with two main challenges while
The corporate and service providers will struggle with educating and creating awareness among the stakeholders.
However, the operational and regulatory spheres will face ultimate reluctance while implementing this technology.
Omar bin Sultan Al Olama, the UAE Minister of State for Artificial Intelligence, reiterated the fact that the UAE has been quick to adapt to new technologies. Hence, cementing its position as the World leader.
“The UAE government has taken an active role in spreading the blockchain technology to the public and private sectors. Spearheaded by the launch of the Dubai Blockchain Strategy and the Emirates Federal Blockchain Strategy, the government has ensured that the technology is accessible to all. In addition to that, these initiatives have caused an increased interest of international investors in the UAE.
The success yielded by deploying blockchain technology is now for the first time being shared with the people, in this paper.“–the minister, of course, is referring to the white paper that was published by the Centre for the Fourth Industrial Revolution UAE (C4IR UAE), said the Dubai Future Foundation (DFF) and the World Economic Forum.
The case studies documented below illustrate the fundamental challenges and success factors that were faced during the deployment of blockchain technology.
DP World —global ports operator
Global ports operators had to deal with two challenges to accomplish their goals. The first one was to collaborate with the UAE entities to enable registration, memberships of new traders on a single platform, licenses, and digitization of exit/entry certificates that were required at the ports.
The second objective was to create a blockchain for beneficiary cargo owners and their trade-logistics business partners to promote data sharing and process integration.
Read more: Dubai is Leading in Innovation and How You Can follow Suit?
Dubai’s largest bank, Emirates NBD
The bank has decided to invoke the blockchain technology to tackle and minimize the challenge presented by cheque fraud.
Fraudsters try various sophisticated technologies to stimulate cheques which cause financial, reputational as well as legal risks to the bank.
In order to curb this very real threat, the bank employed blockchain technology as a mechanism that will control it.
As the group issues close to one million cheques monthly that represent 30% of the total UAE’s clearing volume hence making it the most vulnerable and the one likely to be susceptible to fraud. Therefore, blockchain was explored as a counter-attack to minimize this risk.
Blockchain application
Ending notes
Mirek Dusek, the head of the Middle East and North Africa (MENA) and member of the executive committee at the World Economic Forum, said that the C4IR UAE originates from a deep-rooted alliance between the UAE and the World Economic Forum.
“We are eager and excited to launch this report, which represents a concrete example of how the C4IR UAE can drive and inspire leadership on the inclusive deployment of blockchain. The policies and principles realized in the report will empower not only the UAE and the region’s business and government entities, but will also drive worthwhile partnerships with other countries that are part of the World Economic Forum’s Fourth Industrial Revolution.”
We at KWS Middle East provide top-notch business incorporation services. Our business setup consultants are well-versed and will help you every step of the way.
So, if you are contemplating starting a business in Dubai, then call us we will be delighted to assist you!
Contact us today to book our commitment-free consultation call!
You may have heard about some new laws being introduced in the UAE at the moment with respect to the “100% business ownership” and the “10-year Visa Rule”. As always, KWS Middle East aims to get this important information to you as quickly and as clearly as possible so that you can understand what impact it will be having on your current business or for your new business setup in Dubai.
To this end we have summarized important details of these laws that should help you understand the basics behind these upcoming changes. Please read on.
The landmark law that will change the investment landscape of UAE will allow 100% foreign ownership of companies in UAE.
Currently, companies who want to setup a UAE Mainland Company are required to have a local Emirati partner who must own 51% of the business and companies setup in UAE free zones can only be 100% foreign-owned – but not anymore.
Why the law is introduced?
So, what does it mean for foreign entrepreneurs in UAE?
Firstly, the move would remove the need for foreign entrepreneurs to work with local sponsors which means no third party will hold large stake in your business and you can get straight down to business without an Emirati individual or company to act as partner.
The rule is however, applicable to some strategic sectors only. More details on what these sectors are going to be will be revealed soon as the law will be applicable by the end of 2018.
Also Read: UAE’s changing foreign ownership laws could threaten free zones
If you are an entrepreneur with a novel concept, you can get Dubai SME’s business incubator license with 100% ownership. However, proposals will be scrutinized by the authorities to ensure that it is practical and executable.
According to Dubai SME, the agency of the Department of Economic Development in Dubai, entrepreneurs can apply for incubator license online and each application will go through a feasibility check by a special committee.
According to Abdul Baset Al Janahi, CEO, Dubai SME,
“Dubai aims to reinforce SME contribution to GDP from 40% in 2017 to 45% by 2021. The initiative would attract local and foreign investment in SMEs and international expertise in business incubation and enhance business competitiveness.”
UAE cabinet announced its decision to grant long-term visas for up to 10 years for investors, scientists, doctors, engineers, entrepreneurs and innovators. The message that UAE wants to convey with this move is clear: that UAE is open for business and keen to attract foreign investors, entrepreneurs and the next generation of talent.
What will be the impact of initiative?
Dynamics of real-estate market will change: Long term visas will provide stability and confidence so entrepreneurs will look upon UAE in long term proposition, strengthening the real estate market. We will see the focus of business owners shifting towards buying offices in the UAE, as well as other commercial premises instead of renting, as they consider a longer term future as a result of this law.
UAE will attract even more talent from around the world: Having 10-year visa stamp on passports, whether the visa holders are scientists, technological innovators or entrepreneurs, will encourage them to look towards building a long-term career in the UAE, and think about having their contribution valued.
UAE can become a hub of science: The new visas could offer a greater sense of security to scientists, allowing them to develop long-term careers in the UAE, rather than staying for a short period and then taking their expertise elsewhere.
Also Read: 8 major changes announced to the UAE Visa rules
It’s good to know that the UAE government is constantly pushing to make it as easy as possible for entrepreneurs to start and grow an enterprise. Now is a great time for you to take advantage and create and innovate in Dubai.
If you are looking to start a business in Dubai, you should work with a company formation specialist to ensure they tap into the best support available when working with the Dubai DED. KWS Middle East business setup consultants have complete know how of business rules and regulations and they will guide you the best during your business setup in UAE.
For more information, visit our website KWSME or contact our representatives by calling at 00971-(04) 871 4313 or send us your query on info@kwsme.com.
The city of Dubai made a significant advancement in global economic forum by winning the bid to host hugely significant Expo 2020. This will be the first time that Expo 2020 will be hosted in Middle East, North Africa and South Asia (MENASA) region. Expo 2020 in Dubai is considered to be the first Expo in which majority of visitors will come from foreign destinations. Over 25 million people are expected to attend this glorious event.
The original theme of Expo 2020 is strength of partnership and collaboration in creating new path for development and innovation. Public and private sector collaborations will take place during the planning and implementation phase of Expo 2020. The site of the event is designed with the underlying objective that Expo 2020 will produce solutions based on theme of mobility, sustainability and opportunity.
Expo 2020 is considered to be one of the greatest opportunities for one particular sector especially i.e. SMEs (Small and Medium Enterprises). Dubai remains its position in the world as a commercial hub for trade and SMEs constitute to more than 90% of registered businesses in Dubai. According to statistics released by Dubai SME, SMEs contribute 42% in Dubai’s total employment and produce 40% of gross value addition. It is expected that hosting Expo 2020 will generate gross value addition of AED 71 billion.
Amongst 4,633 companies which have registered themselves on Expo 2020 electronic platform, 32.7% comprise of SMEs. Expo 2020 in Dubai is an ideal platform for SMEs to be more creative and expand themselves. SMEs play key role in success of this whole event. In such a diverse and competitive environment, the challenge is to stay ahead of everyone else.
Also as a result of Expo 2020, the investment environment of UAE has risen sharply. Around 8.8 billion US Dollars will be spent on developing Dubai infrastructure and on facilities required by this event. This provides huge opportunities for SMEs especially in construction, transport, tourism and hospitality categories. Consultancies will also provide their expertise for planning and implementation of Expo 2020.
Perhaps the key to Dubai business success is partnership. Boosting the relation between public and private sector will develop business community further and improve Dubai’s competitiveness. This type of partnership between public and private sector will enhance SMEs and bring economic growth. SMEs contribute to 60% non-oil GDP and 86% to private sector employment. A regulation has been passed in support of SMEs which says that 10% of government contracts will be given to SMEs. According to a recent survey, UAE has been recognized as world’s 2nd most business friendly government; hence we anticipate more programs to boost public-private partnerships between SMEs.
Large scale companies such as Meraas, Emaar, Nakheel, Dubai Properties and Damac will create large scale projects. Some of these projects include expansion of Metro Red Line Dubai, new forecourts at Makhtoum International Airport, interchange on Sheikh Mohammad bin Zaid road and formation of Expo 2020 site. These projects provide immense opportunities for SMEs and it is forecasted that the event will produce 300,000 direct new jobs and 1 million indirect business opportunities.
Small and Medium Enterprises can utilize this opportunity by,
Expo 2020 in Dubai is deemed to be once in a lifetime opportunity for SMEs and business owners have a chance to represent their country to millions of visitors bringing exposure to UAE business and show their strength and quality of service. SMEs should look forward to multiply their consumer base from locals to international clients. Along with hospitality, tourism, construction, retail, wholesale and transport businesses, food and beverage sector will also receive a significant impact so SMEs should look forward to explore these areas which will eventually enhance economic growth of UAE and the region.
If you need further information on opportunities for SMEs in Expo 2020 Dubai or you want to establish you own small and medium enterprise, KWSME offers best business setup solution for new start-ups. We have ample experience in this industry and are among st the best consultants across UAE. Contact us at KWSME for further guidance.
Over the past decade, Dubai has established itself as the Middle Eastern hub for fashion. Entrepreneurs, influencers, designers, stylists, and international retail brands pertaining to the fashion industry have all found Dubai to be the place to be if they want to take their brand to newer heights. Additionally, the local talent of the United Arab Emirates (UAE) is highly dynamic and innovative and has managed to flourish in a steadily evolving fashion world.
So, what truly makes Dubai tick? The answer is – anything and everything that has worldwide appeal, delivers excellence, has value, and does not have the sword of Damocles hanging over its head as it does on crude oil. In a nutshell, any idea which can ultimately be turned into a business setup in Dubai is the thing that makes Dubai unstoppable!
Dubai’s fashion market includes clothing of every kind imaginable, and it consists of both domestic goods and exported merchandise. The bulk of Dubai’s population is of Arab descent. The rest of the UAE’s population is a healthy mix of other ethnicities. Five percent of those consist of employees from the Eastern countries. With a tinier percentage of immigrating business people taking full-time residency. Dubai’s market is home to many import-export related activities. As a consequence of the active and open and extensive business networks that are in Dubai and its prime gulf locality, wholesale apparel is exported easily throughout the Middle East, and the rest of its neighboring countries, including Turkey and those that reside in the African sub-continent.
If you are a fashionista or a fashion fiend who wants to establish their career in this industry, then Dubai is the place to be as there is a world of investment opportunities waiting just for you! All you need is a solid business idea, a good network of people, and you are ready to begin.
We have put together a list of five low-cost investment opportunities in the fashion industry of Dubai for you that surely will enthrall you to start your fashion business right away.
A fashion consulting business is an outstanding option for a sociable, lively, observant person who has an eye for fashion. It can be a particularly unique business opportunity for those with extensive experience in the retail sector who find joy working directly with customers and creating looks for them. Plus, this business requires no form of formal education. Just that it would be infinitely better for if you get a degree in any subject that is associated with fashion as it can help in improving your reputation and gaining the client’s trust when you are first starting.
Social media is the source of inspiration for countless people. A decade ago, we did not know about its significance, but now we know better as it has disrupted each facet of our life and reshaped the way we do things entirely. As we explicitly talk about Dubai, the same stands true for this city of millennials. The city that is the hub of all high-end international fashion brands, fashion bloggers, can really create a name for themselves by writing about anything and everything. From life-altering to game-changing fashion reveals to discussing all the happenings of the fashion world, merely by browsing through the Dubai malls.
Your very own personal shopping business in Dubai is ideal for someone who has prior experience in fashion, styling, make-up, hair-care, and other related fields. Startup costs for a personal styling and shopping company are very low. You can ordinarily get things up and running for a lower price, with the majority of that expense going toward local advertising. Earning potential will vary considerably depending on the office location and how many customers you are able to manage at once.
Currently, people from all over the world are flocking towards Dubai. The primary logic behind this massive influx of individuals is the numerous lucrative career opportunities that the city extends to anyone who dares to dream. So whilst they are busy with their work lives, squandering time and money on purchasing all the fancy clothes that are required for office parties and other social gatherings can quickly become a tedious task. Therefore, if you know what the world of fashion is all about, you can easily open your own store or launch your very own label that can offer rental services to this fashion-savvy population.
From breathtaking cliff-diving to thrilling desert safari rides, Dubai, in every sense of the word, has it all. But beyond this splendid and incredible way of entertainment, Dubai is well-known for conducting the most anticipated events of the year. The Dubai shopping festival is an annual occurrence that the tourists enjoy greatly. So if you have a penchant for planning and styling, love to micro-manage people, work great under-pressure, then this is the job meant for you. Plus, by collaborating with world-renowned fashion designers and international modeling agencies, can help you make connections with influential and powerful people that can surely take you places in Dubai.
To cut a long story short, we’ve come a long way from the days when the only sought-after and high-paying jobs in the fashion industry were photographers, designers, or that of models. People aspiring to work in the fashion industry today have an abundance of career options tailormade to match their expertise perfectly. If you are someone who is excited by the fashion world, then there is a unique opportunity for you to profit off of, just waiting for you to make it yours.
We at KWS Middle East can help you set up your fashion boutique store in Dubai. Our business experts are knowledgeable and can help you in registering your business in Dubai. Be it in Dubai mainland or free zone or rest of the UAE, our business setup consultants, will guide you every step of the way.
The Dubai government is currently contemplating a recommendation proposed by the experts to lessen the challenges faced by the business community in these troubling times when cash is flowing more slowly into the business, and everyone is struggling to stay afloat. The proposal suggests a no-rental hike stipulation for three years after a lease contract is signed between the landlord and tenant. The Dispute Resolution Committee is considering such a plan. Still, no decision has yet been taken regarding the matter of if and when the proposal is to be rolled out, states a Dubai Land Department’s spokesperson.
The spokesperson also added that right now, all rental decisions are hinged on the Dubai Rent Index, and it will proceed to be so till the three-year no-hike plan is executed. At the moment, Sharjah is the only emirate of the UAE that has this proposal in place as the authorities there grant a three-year cut-off on new contracts before considering any rental increases. And it is a big success there.
However, the three-year-cut-off on new contracts is still in the proposal stage in Dubai as it always follows the guidelines issued by the Rental Index system. Therefore, it is still uncertain whether the Dubai Land Department will determine if the recommendation will just extend to residential properties or would involve all types of real estate categories, including commercial and retail premises. If it were to convert into a comprehensive policy, then it would have a massive application on all of the retail divisions. Whereby retailers have complained eloquently in the past on how mall directors set and raise rents without any warning or reason, even though the market situation does not dictate them.
The proposal comes as Dubai includes a slew of new economic reforms directed at enticing ex-pats and foreign investors. Among the present measures, Dubai intends to grant long-term visas of up to ten years. It is also approving new budget employee insurance policies to help maintain talent and attract investors.
Foreign investors will be able to control and own a company in the region completely- a notable departure from the present policy, which limits foreigners to a forty-nine stake in entities outside free zones, requiring them to forge partnerships with stakeholders from the Emirates.
In the last several years, Dubai has observed many developments both in its infrastructure and in the influx of new investors flocking into its shore the likes of which were never witnessed before. Because of this, the supply for residential areas has increased manifold; on the other hand, the demand has slowed down considerably as the foreigners are not interested in staying in the emirate for a long time. According to a study conducted in the UAE, rental rates have dropped by a whopping eleven percent compared to last year alone.
If this trend remains in Dubai, the real estate industry of the region may suffer, landlords would be forced to decrease rental fees. Lower-income will lead to fewer people being inspired to initiate new business in Dubai. Hence, the Dubai Land Department deems this three-year rent suspension as one of the potential solutions for this dilemma. It shall benefit not just the landlords but also the tenants.
With the three-year contract in place, the landlords are granted with a possibility to earn continually for three years. Simply put, this three-year- rent-cut-off policy allows landlords a means of guaranteed Return On Investment and consistent cash flow.
At the same time, tenants would experience and benefit from a fixed rental charge for three years, assisting them to avoid getting hit by the continuous rental raise. Consequently, helping in budgeting.
Both landlords and tenants could conserve more time and money as they only are required to renew their contract every three years or so.
A few specialists and experts argue that this three-year rent freeze or suspension might not yet be wanted as of now. Even though it may admittedly promote financial stability for landlords (who mostly are UAE citizens, and hence are the UAE government’s priority) and tenants( who mostly are foreigners and therefore are the primary source of income), it also could potentially lead to other difficulties. For instance, if you have a rented studio space, that a couple has borrowed from you, but during the first year, they get an additional member joining their family. So, the small studio apartment may not be sufficient d=for them anymore, resulting in them leaving the space to go for a bigger and better option before their three-year lease was up. Thus, leaving you in a lurch as you have to start the process of looking for a suitable tenant all over again
Three years could be a lengthy time for a contract. A tenant could have an unanticipated event happening in their life, that could affect the contract. Or a tenant may suddenly decide that a three-year deal is a bit too inflexible for them. Or any number of circumstances can occur that may hinder you in signing a suitable tenant.
Tenants are benefiting from a soft real estate market, with landlords being the ones under constant stress. Although there might come a day when the market turns in favor of the landlords, and rents again hike up. But till that day comes, experts still think that the three-year rent freeze benefits the tenant more because a landlord cannot demand more money just because the circumstances have changed since the contract was signed. So, it also allows tenants to enjoy lower rent rates for a long time even after the market has turned in favor of the owners, thus allowing the tenants a bit of a reprieve before they have to spend more.
And in recent times, it is apparent that when markets do turn around, they turn around quite quickly; and rents are one of the first things that get affected by them.
With a three-year rent cap, a renter would identify their precise expenses for rent over the next 36 months, hence helping them in planning ahead, which is essential to fulfilling their business ambitions and targets.
We at KWS Middle East give you all business setup services in Dubai, including the facility to rent an office space in Dubai or of opening a branch office in Dubai. We also regulate rental agreement contracts, as well as provide fully-equipped business centers in Dubai at affordable prices. We know that when it comes to an office, no two companies want the same. To set up an office in Dubai or to avail of our expert service, contact our business setup consultants who are well versed in the area of business incorporation- we’d be happy to be of help.
Contact us and book your commitment-free call with our experts today!
BannerText_Seraphinite Accelerator