Economy

In Practice

Doing Business

Dubai nudged up the World Bank’s Doing Business report for 2016, rising three places to 57 in the global tally of 189 economies. The Emirate, built upon the tenets of […]

Dubai nudged up the World Bank’s Doing Business report for 2016, rising three places to 57 in the global tally of 189 economies. The Emirate, built upon the tenets of international trade and commerce and business-friendly initiatives, has a growing reputation as the region’s business hub. The result is that Dubai today is diversified, the economy is growing at a healthy clip (4% YoY), and the city itself is one of the most multi-cultural places in the world. In the 1H2015 alone, 8,830 new companies were registered by the Dubai Chamber: a 12.5% increase YoY. Dubai International Financial Centre (DIFC) posted an 8.3% increase YoY in the number of companies it lists.

Free Trade Zones (FTZs)

FTZs are at the heart of the Dubai government’s efforts to stimulate diversification of the economy, and their popularity today is a testament to the government’s success. To set up a company in one of the FTZs is generally straightforward and hassle-free. The important condition is that of a local partner, who can underwrite the business and support day-to-day with any paperwork and administration. Nonetheless, the company remains 100% foreign-owned, with complete exemption from all import and export duties. The zones give their companies exemption from all corporate taxes for the first 15 years of operation locally. The SEZs require no personal income tax declarations. Day-to-day paperwork is minimal (and considerably less than outside the zones), and in English. The FTZs are also operated under English law, overseen by the central courts of the Dubai International Financial Centre (DIFC). Setting up a company or office in the FTZ gives the company operational confidentiality, and allows companies to close discreetly, too, should that time ever come. FTZ registration allows foreign companies to open a local bank account in the UAE. Interestingly, there is also no restriction on the number or range of business activities, so a company registered in Dubai Media City could also be developing real estate, for example.

Dubai is home to the greatest number of FTZs in the UAE, with 23 listed by 2016. Of these, the Jebel Ali Free Zone is the largest, with more than 6,000 companies registered at the port. Dubai Airport Free Zone lists 1,300 companies; Dubai Media City, 1,200 companies; and Dubai Internet City, 1,000 companies as of March 2016.
The independent, yet government-regulated, Free Zone Authority (FZA) oversees and regulates the FTZs across the UAE; in total there are 20,000 companies registered in 41 FTZs across the country. Once established in the FTZ, a company will need to acquire a license to lease premises in the zone. In order to sell products in Dubai, the company must set up a JV with a local, UAE-based agent.

Special Economic Zones (SEZs)

SEZs are an increasingly vital part of Dubai’s economy, of which DIFC is itself probably the most famous example. More and more, their role is to nurture SMEs to get a foothold on the economic ladder. They share many of the same benefits as FTZs, while largely not being defined by a sector. Knowledge Village, and even Dubai Media City and Dubai Internet City, also fall under the category of SEZ.

Etiquette

Business culture is formal in Dubai, and business attire is appropriate and expected unless you are already on familiar terms with your client or associate. Despite the sweltering temperatures for much of the year, men should don a suit and tie. Business in Dubai is conducted in a brisk and efficient manner, so try to be punctual, and do not expect meetings to drift on through the day, as they might in other parts of the Middle East. English is widely, if not universally, spoken, and is the language of business almost without exception.

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