Dubai, often dubbed as the commercial hub of the Middle East, has earned this title by careful planning and taking the necessary steps to achieve its vision of 2005. That was laid out in 1985 and outlined the plan to diversify its economy to a non-oil-dependent one from an economy that was heavily dependent on its oil sector.
Nowadays, Dubai competes with major global financial centers in the world like New York, London, Hong Kong, and Singapore. In the second half of 2019, Dubai was ranked above the established global commercial hubs and stole the top spot from them.
What sets Dubai apart from these well-established entities is its open culture and tolerance towards other cultures, races, nations, and religions. Because of which many foreign businesses and expatriates choose it as their place of residence and as a base of their business operations.
What sets Dubai apart from these well-established entities is its open culture and tolerance towards other cultures, races, nations, and religions. Because of which many foreign businesses and expatriates choose it as their place of residence.
Another reason is that Dubai provides stability and security in the ever-changing Middle East and North African Region (MENA) because of which many entrepreneurs take advantage of the safe environment that is immensely conducive to running businesses without a care in the world. Furthermore, there are many different economic zones called the Free Zones that are specifically designed to promote the entrepreneurs and business owners to business setup in Dubai. Each zone is dedicated to various sectors of the industry. Besides that, these zones also offer many perks to the companies that choose to set up here, because of which many foreign investors and companies have selected the UAE as their newest base of operations.
Similar benefits are offered to the companies that choose to start their business setup business in mainland Dubai, which allows them to access the local UAE market as well as the international market providing an excellent opportunity for businesses interested in the financial sector.
For your consideration, we have listed below the main reasons for you to start a finance business in Dubai posthaste.
The UAE has never experienced internal power struggles and upheavals. Stable governments have always governed Dubai and largely the UAE for decades now.As the Emirate of Dubai has comparatively lesser oil resources than its many counterparts. Therefore, there are no surprises here that the Government’s policy tilted towards developing other business areas, mainly focusing on finance, tourism, hospitality, real estate, and logistics. These sectors now contribute to a significant part of Dubai’s economy. They are the prime industries where both foreign and local entrepreneurs choose to invest in. The Government to further promote the influx of investment has adopted business-friendly policies that include the development of many free zones with their own pro-business rules and regulations, hassle-free company formations, speedy visa process to name a few.
Easy Market Access
Dubai is the Gateway to the Middle East for many countries of the region. The foreign and local companies located in other emirates of the country need to pass through it to trade with the neighboring countries. Many companies, because of this reason, have formed their base in Dubai. Due to the sophisticated sea route that connects it to the countries in the Persian Gulf, Dubai has matured into a logistics hub with numerous carriers operating from its many seaports. The Government of Dubai has signed many bilateral treaties and entered into mutually beneficial partnerships with several countries worldwide, and this has enabled businesses in the UAE to avoid the dreaded double-taxation. Financial companies can use it to their advantage and develop such services that cater to the players operating from within Dubai and critical players of other the Middle East and African markets. Many financial firms from Dubai spread their reach from farther the Middle East to the South Asian region.
DIFC Free Zone
Dubai International Financial Centre (DIFC) is a free zone created exclusively to benefit companies investing in the financial sector. DIFC is one of the primary trade hubs that is spearheading the growth in Dubai. The economic zone contributes to around four percent of the entire Emirate’s GDP. It is home to more than Twenty-two thousand registered firms with fourteen YOY growth in business incorporation rate.
The free zone offers many advantages for companies like they can attain a hundred percent foreign ownership without the condition of the local sponsor who must be a UAE national. Corporate taxes for renter companies are waived off for fifty plus years. There are no restrictions on the usage of foreign currency, and companies can repatriate all of their profits to their home countries without any prior notice.
The tenants of DIFC include many renowned international and local financial companies. The free trade zone also offers other facilities, which include famous lifestyle brands, fashion brands, art galleries, restaurants, villas, and hotels.
The Government has recently stated its expansion plans for DIFC under the program labeled ‘DIFC 2.0’ with a proposal to extend the current area to Seven-meter square feet in the upcoming 15 years.
Financial corporations need to operate in a market guarded by a fair and transparent legal system. The sensitive nature of their business activity demands this particular need.The well-defined, distinctive, and non-bias Judicial system established on the grounds of International law is the fundamental requirement of the Financial companies to continue their smooth operations. DIFC free trade zone has independent Jurisdiction in Dubai and has its own set of civil and commercial laws. DIFC’s courts are filled with serving judges who are highly-qualified and have served in many international courts. These courts are responsible for settling all the disputes that arise within the borders of the free zone. There is also an independent International arbitration and negotiation center called DIFC- LCIA Arbitration center modeled after the London Court of International Arbitration.
NASDAQ Dubai or Dubai International Financial Exchange, as it was earlier known as, is a financial market based out of the DIFC free zone. Many local and global companies are listed in this exchange, and the trading takes place at previously approved times. Financial institutes can make a profit from the opportunities in trading by the listing companies who are interested in starting a business in Dubai.
Fintech and Innovation
DIFC’s ‘Fintech Hive’ is an accelerator program explicitly designed for fintech start-ups operating from this free zone. The DIFC free trade zone includes more than a hundred Fintech firms. The objective of the FinTech Hive is to unite the new-age innovators in the financial services technology with traditional financial institutions such as banks and money exchanges, offering them a dynamic ecosystem to them where they can coexist and develop and present their innovations.
Start-ups in Dubai
More than thirty start-ups were operating from Dubai in 2017, which were directly serving the Middle East and African markets. The number of start-ups has significantly grown in the preceding years with the aid of many incubators in various free trade zones and global entrepreneurs contemplating serving more widespread markets. Private Equity and Venture Capital firms can avail from the start-up ecosystem to their advantage and be part of the expansion.
World Dubai Expo 2020
Dubai is hosting a hugely anticipated event in the world Dubai Expo 2020, starting in November and will run for six months. During its entire run, the Expo is speculated to attract large crowds from many diverse countries. There is a nationwide initiative launched by the Government to upgrade the infrastructure for the event. All business sectors will significantly benefit from this grand event, which is touted to lure in billions of dollars as an investment. The Expo and its aftermath are believed to positively affect tourism, travel, hospitality, and the real estate industry for many years to come. Several companies have set up their business to feed the new demand in these sectors. It equally provides many business and investment opportunities for financial companies.
We at KWS Middle East help companies in setting up a business in Dubai and provide them with all the right inputs, be it legal insight or other such kinds we are here to help. Our expert business setup consultants can help businesses in all aspects of business setup, including legal, accounting services, and utilities.
Contact us today to book your commitment-free call with our team!