The Key Factors That Make Dubai One of the Most Entrepreneur-Friendly Cities

Dubai boasts a strong economy and a range of business-friendly policies and initiatives, all of which position it as one of the most sought-after places to do business. As an entrepreneur-friendly city, Dubai has often named the best anywhere. More than 10,000 small and medium-sized startups are operating in Dubai right now.  

Investors are similarly flocking to Dubai, with luxury property sales soaring.

So what exactly makes Dubai such an attractive place from a business standpoint?

Factors contributing to the business-friendly reputation of Dubai include direct foreign investments, technological advancement, expansions of innovation, strong government support, tax-friendliness, and a low cost of doing business. Dubai is also part of the World Trade Organization, which allows startups and businesses to enter international markets.

The Economy

When discussing why Dubai is popular among entrepreneurs and investors, it’s critical to first look at the economy and the initiatives undertaken.

Dubai’s government has announced plans to double the overall size of the economy over the next ten years, with the goal of making it one of the top three cities worldwide.

In January, Dubai announced an enormous $8.7 trillion economic plan for the next decade, aiming to increase trade and foreign investment, cementing its role as a global core of the business.

Sheikh Mohammed bin Rashid al Maktoum, the leader of Dubai, tweeted that more than 300,000 global investors are helping Dubai transform into the fastest-growing city globally.

The plan is set to increase private sector investments, with the government pledging sizable contributions to support projects related to digital transformation and similar undertakings.

The new economic plan would add hundreds of cities to the list of Dubai’s trading partners and increase foreign trade by 44%.

Dubai has long been a hub of the Middle East but now has ambitions of expansion far beyond the region.

The city also has no income tax and one of the lowest crime rates anywhere in the world.

Interestingly, the UAE also recently changed from a format of following the Islamic weekend, which is from Friday through Saturday, to the Western weekend, which is Saturday and Sunday, to stay in line with the schedule of the bulk of the world. Along with that came a new offering for a remote worker visa program.

While most of the world looks like it’s on the precipice of a pretty grim economic situation in 2023, with potentially pervasively high energy costs and recessions, the UAE and other Gulf states could flourish.

Entrepreneurship in the UAE

The Global Entrepreneurship Index recently ranked the UAE as the number one best place to start a business. This is due to factors including access to finance and support, opportunities, skills, and education available to entrepreneurs.

The UAE’s robust infrastructure and platforms also help business owners scale up.

Registering a Company in the UAE

The government has been taking steps in recent years to make it increasingly easy for people, including foreigners, to begin registering a company in the UAE.

When creating a business in Dubai, one of your first decisions is whether to set it up in a Free Zone or Offshore, with both options having unique benefits.

If you want complete business ownership, you might apply for a license in a Free Zone. The government created the Free Zone concept to drive foreign interest in setting up a business in the city. Free Zones are economic areas where a business owner has complete ownership but also 0% personal income tax and just 9% corporate taxation, which is applied to profits above AED 375,000.

The limitation of a Free Zone is that you can’t make direct trade within the local market of the UAE.

There are dozens of Free Zones currently in operation in Dubai, and each zone is usually built around one industry. Within those, you can find the appropriate license for your company category.

Offshore companies can also be registered in Free Zones and take advantage of many benefits. The limitation is that offshore companies can operate outside the UAE but not inside. There are additional requirements for deposits of minimum capital before a business can be incorporated this way, and a sponsor is required, so your foreign ownership is capped at 49%.

Tax Residency in Dubai

If you’re a foreign owner or manager of a Free Zone company in the UAE or an investor, you have opportunities to live there and become a tax resident. You’re not required to stay in the UAE to keep your residence visa continuously—instead, you’re required to visit a minimum of every 180 days to keep your Residence Visa.

Some companies in the UAE have 0% corporate and 0% withholding taxes, and if you’re a fiscal resident of the United Arab Emirates, you can enjoy 0% taxes on income, wealth, and dividends. There are also no restrictions on profit or capital repatriation. 

Tax residency in Dubai is one of the big reasons it’s a city with so much appeal for entrepreneurs.

Financing Opportunities

Along with the unique advantages the government offers to entrepreneurs who bring their ideas to Dubai, there are also excellent financing opportunities. The city and region are home to some of the world’s highest net-worth people and some of the biggest banks.

Many accelerators are finding their footing in Dubai, bringing together investors, startups, and combined public-private partnerships.

While many of the world’s largest cities anticipate potential struggles in the year ahead, Dubai is set to become one of the leading places for people with great ideas and an entrepreneurial spirit.

It’s one of the most energized and exciting cities in the world, and it’s a good time to think about investing here, whether that’s in real estate or business, or maybe both. Dubai and its government have made it clear that the top priority is supporting business and innovation in every way possible.

We encourage you to look at luxury properties for sale in Dubai and learn more about the opportunities available in this rapidly growing economic powerhouse, set to become an economic centre not just for the middle east but the world.

Compare listings

+971 54 4908888 WhatsApp