Many of us recognise Dubai as a truly cosmopolitan city that has quite literally emerged from nothing as a global business hub over the last few decades. The combination of world-class infrastructure, its strategic location, and the incredibly welcoming business environment makes it an ideal location for business owners to run their operations.
That being said, as with any location, running your business in Dubai will require a thorough understanding of the local laws and regulations. This article acts as an introduction to the topic, to help you find out what you need to know about operating your business in the city of gold.
Business structures
Businesses in Dubai are able to choose between a variety of different legal structures, including individual establishments, general partnerships, and limited liability companies. Each structure comes with its own benefits, and some will be better suited to your business than others.
It’s important to do some research yourself, but ultimately, you’ll likely need the assistance of a local legal professional to ensure that you are fully compliant with all the necessary regulations at all times.
Sponsorship
One peculiarity to doing business in Dubai is that in order to operate a limited liability company or other business as a foreigner, you must have a local sponsor from the UAE who owns at least 51% of the company.
Often, the sponsor will require paying as well. Your sponsor will be legally responsible for your business, and will be the one who represents your business in many legal settings – they will be able to provide local advice, and interpret local documents that you would otherwise struggle to comprehend.
In addition to a local sponsor for your business, it will likely be necessary to use a service such as CBD Corporate Services Visas to ensure that you have the legal right to work in Dubai.
Taxation
One of the many attractive parts of doing business in Dubai is how tax-friendly it is. However, as with all tax related issues, it’s relatively complex. There are certain zones in which you will be subject to no taxes.
Companies involved in the petrochemical and oil industries will be subject to a 55% corporate tax; there is no federal-level personal income tax, and there is a value-added tax (VAT) of 5%. To ensure that you stay on the right side of the law, it’s imperative that you discuss these matters with a tax expert before setting up shop.
Cultural factors
As is the case when travelling to any foreign country, it’s important to be aware of and respect local customs and traditions, in order to be able to settle into the local environment and forge local partnerships. While the official language in Dubai is Arabic, English is also widely spoken, making it highly accessible for international business people.
Hopefully, this will have cleared up a thing or two about operating a business in Dubai. It’s a wonderful place to work and live in, with numerous benefits to take advantage of. All you need to do is make sure that you take care of any legal ambiguities before heading out there and be sensitive to any local customs and traditions.
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