Doing Business in the UAE
The UAE lies at the heart of a strategic, geographic crossroads where trade, commerce and diverse cultures have co-existed and interacted for hundreds of years. Today, the UAE has one of the most open and dynamic economies in the world. A number of global business indexes have recognized the advantages that the UAE brings to international business. AT Kearney ranks the UAE as one of the top 20 best places in the world for global service business. And the UAE is ranked in the top 30 on the World Economic Forum’s “most-networked countries”—ahead of all other Arab nations, as well as countries like Spain, Italy, Turkey, and India. The UAE also gets positive rankings from Transparency International and the World Bank’s Worldwide Governance Indicators for control of corruption, ranking in the top quarter of the least corrupt countries in the world.
Reasons for Doing Business in the UAE:
Robust open economy
The UAE has a vibrant free economy, a significant proportion of its revenues arising from exports of oil and gas. Successful efforts have been made to diversify away from dependence on hydrocarbons and a solid industrial base has been created, together with a very strong services sector. The establishment of free zones has been an important feature of this diversification policy and reform of property laws gave a major boost to real estate and tourism sectors.
Security and stability
Since its establishment in 1971, the UAE has enjoyed an enviable degree of political stability, unequalled in the region. This has enabled the implementation of consistent sound economic policies and the reinforcing of the country’s social structure to produce one of the most tolerant, prosperous, secure and safest societies in the world. Dubai and Abu Dubai have been ranked the top two cities in the Middle East region for quality of life, according to the latest edition of a global survey. Long-time investors include a wide range of multinational companies headquartered across the globe.
Tax-efficient business environment
Special economic zones and free zones offer 100 per cent ownership, repatriation of profit and capital as well as exemptions from taxes. Outside of these areas, significant incentives are being offered to investors and corporate governance provisions ensuring transparency and accountability are being enforced. Corporate taxes are reserved only for branches of foreign banks and oil-producing companies. A negligible 5 per cent tariff is imposed on goods imported from non-Gulf Cooperation Council (GCC) countries, although tobacco and alcohol products are subject to 50 per cent customs duties.
Proximity to growth regions
The UAE’s strategic location between Asia, Europe and Africa is a major advantage to investors, particularly the country’s proximity to some of the world’s fastest growing economies in Asia. Collectively India and China alone comprise almost 40 per cent of the world’s total population and support a combined GDP in excess of US$5 trillion, providing significant economic and trading opportunities.
Intellectual property protection
Intellectual property, including patents and trademarks, is legally protected in the UAE and considerable efforts are being made to implement these laws. The country is also a member of international bodies, treaties and conventions that safeguard intellectual property, including the World Intellectual Property Organization (WIPO), World Trade Organization (WTO), Paris Convention, Patent Cooperation Treaty (PCT), WIPO Copyright Treaty, WIPO Performances and Phonograms Treaty (WPPT) and the Rome Convention.
Infrastructure in the UAE is second to none. Telecommunications, including mobile and fixed telephony as well as internet access is on par, if not better, than the world’s largest international business hubs. The road network is constantly upgraded and ports and airports are of world-class standards. In addition, the UAE is creating one of the world’s biggest and most efficient cargo handling centers. To date, the Government has invested heavily in infrastructure development, but it has also opened up its utilities and other infrastructure to greater private sector involvement, so much so that public-private partnerships are now the norm.
Multi-national human resources
Investors benefit from an abundant supply of human resource skills, courtesy of professionals migrating to the emirate from nearly every country in the globe, as well as the increasing number of UAE nationals that are joining the private sector.
Language for business
Arabic is the official business language. Most government forms and official contracts – e.g. tenancy, residence visa – are in Arabic. Official documents (e.g. university diploma, marriage certificate) that have to be submitted to a government agency for processing or authentication also frequently require translation into Arabic. However, English is commonly used in business circles.
Working hours are either ‘straight shift’ or ‘split shift.’ The former normally requires eight working hours beginning from 7:30 a.m. or 9:00 a.m. with a lunch break lasting 30 minutes to an hour. The latter comprises eight to nine working hours that typically commence between 9:00 a.m. and 10:00 a.m. and ends between 8:00 p.m .and 9:00 p.m., with a three- to four-hour break in between. The split shift is thought to be an efficient means of addressing the extremely hot weather during the summer months, particularly for laborers. Working hours are shortened during the holy month of Ramadan, usually by two to three hours.
Setting up business
All businesses, whether industrial, professional, trading or services, must be licensed to operate in the UAE. Licensing procedures vary from emirate to emirate and the relevant details are available from the individual Chambers of Commerce. The Commercial Companies Law and the Trade Agencies Law constitute the primary federal legislative framework controlling commercial activities in the UAE.
Efficient government services
E-government websites, free zone authorities as well as chambers of commerce and industry provide new entrants with helpful information and guidance.
UAE is the leading business hub; it offers access to a market of outstanding potential for overseas companies to plan to set up their offshore company. Among its key characteristics are:
• A growing market – Dubai’s imports have more than doubled since 1989; regional economic growth and liberalisation is set to boost demand;
• A prosperous market – strategic location at the heart of one of the world’s richest regions;
• A diversified market – wide import requirements; opportunities for suppliers of most products;
• An accessible market – served by more than 170 shipping lines and 86 airlines; An open market – no exchange controls, quotas or trade barriers.
The Business Environment
The Business Environment UAE offers incoming businesses all the advantages of a highly developed economy. The infrastructure and services match the highest international standards, facilitating efficiency, quality and service. Among the benefits are:
• Free enterprise system.
• Highly developed transport infrastructure.
• State-of-the-art telecommunications.
• Sophisticated financial and services sector.
• Top international exhibition and conference venue.
• High quality office and residential accommodation.
• Reliable power, utilities etc..
• First class hotels, hospitals, schools, shops etc. Cosmopolitan lifestyle.
UAE Business Climate
Doing business in the UAE is very attractive due to the following reasons
• No personal income and capital taxes
• No corporate taxation
• 100% repatriation of capital and profits
• No currency restrictions
• Competitive import duties (5% with many exemptions).
• Modern efficient communication facilities
• Abundant and inexpensive energy supply
• Simple staff recruitment procedures
• Competitive freight charges
• Competitive real estate costs.
• Easy access to both sea and airports.
Currency and Exchange rate
There are no exchange controls in the UAE and its currency, the UAE Dirham, is freely convertible. The Dirham is
linked to the US dollar, the currency by which oil prices are measured.The exchange rate has remained at
Dh 3.675 = US$ 1 since 1977.