Advantages of Doing Business in Dubai

Dubai is a reputable trading jurisdiction worth an estimated US$80 billion (up over 100% from 2005) that has made strides in all aspects of the country's infrastructure. Much of what is in place now was built around, and funded, through the gas and oil industry. However, while still producing around 240,000 barrels daily, the oil and gas industry now only accounts for 6% of Dubai's total economy. The shift from dependence on the emirates natural gas and oil reserves has seen heavy development and promotion of other industries such as tourism.

 

The UAE has been ranked 30th, and 31st respectively for the Corruption Perceptions Index and UN Human Development Index, the latter being a measure of a country's standard of living. Both are testaments to the country's reputation as an efficient and developed jurisdiction, economically, and socially.

 

There are many engineering milestones in Dubai, and many more in planning. For instance the Burj, the most expensive hotel in the world, and until recently the tallest, built wholly on reclaimed land.

 

In an effort to promote the service industry a variety of incentives and supportive corporate structures have been devised. These include low cost energy and world-class communications infrastructure. Various Dubai free zones have been developed to provide services relevant for entrepreneurs, and hence encourage them to set up a company in Dubai.

 

Dubai is part of a collection of Emirates in the Middle East, collectively making the country of the United Arab Emirates, or the UAE. They are unified in many aspects, but each Emirate has their own tax decree, slightly differing from Emirate to Emirate.

 

As per the Dubai Income Tax Decree 1969, tax shall be imposed on every chargeable person. A "chargeable person" is a corporate body, regardless of whether it is a resident corporation so long as it has a permanent establishment in the Emirate of Dubai, unless under agreement with the ruler to exemption from taxation. Although these are the current taxation laws, they are not practiced. The UAE imposes none of the following taxes:

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There is however, legislation in place for the three largest Emirates: Abu Dhabi, Dubai and Sharjah that stipulates oil, gas and petrochemical companies and foreign banks have to pay taxes. While there is no personal income tax or corporate tax in effect, there are some other small surcharges in place.

 

Importing products into Dubai requires a trade license and Import duty is usually at 4%. Exemptions for this tax exist for categories including food, medical products, construction materials, along with products for some free zones. Luxury products carry a tax duty of 10%. Like many countries, cigarettes and alcohol carry high taxes, 100% levy for cigarettes and 50% for alcohol.

 

Companies incorporated within the Emirate of Dubai enjoy double taxation treaties with over 47 countries, these extend to the jurisdictions of China, France, Germany, India and South Korea, to name a few. There are also negotiations with several other nations. Under these treaties, the profits earned are taxable only in the deriving state, for resident companies, meaning the company is incorporated in Dubai as an independent entity, as opposed to being a representative or branch office.

 

The large shift in economic structure in Dubai has led to a greater emphasis on the service and tourism sectors, large injections of cash have prompted the rapid development.

 

The tourism industry is promoted in line with the glamorous lifestyle images often seen of Dubai. Construction of exotic commercial and residential developments, such as the Palm, a fully man-made series of islands that give an aerial image of a palm tree, promote Dubai as hub of rich variety.

 

Big developments to support the service industries such as the Dubai Internet City, the Dubai Airport Free Zone, and the Jebel Ali free zone have been built to provide state-of-the-art infrastructure for prospective company incorporation. Whether you require the best communications networks, or premium banking services, Dubai offers entrepreneurs effective options for company incorporation.