As the economic engine of the Middle East, the UAE serves as a gateway of opportunities for entrepreneurs worldwide. Strategically positioned at the crossroads of Asia, Africa, and Europe, the UAE is a thriving commercial hub beneath its luxurious exterior. However, for businesses seeking entry, cultural differences and regulatory complexities can pose significant challenges.
This article breaks down five key questions frequently encountered by companies expanding into the UAE, offering a realistic view of the region’s business environment.
1. How much does it cost to start a business in the UAE?
The cost of setting up a company in the UAE varies depending on business needs and office location, with options available for different budgets.
Initial costs typically include approvals from the Ministry of Economy, trade name registration, office leasing, and various legal and administrative fees. In total, expenses generally range from AED 14,500–25,000 (USD 3,950–6,800).
For a more cost-effective setup, free zones offer base licensing fees starting at AED 5,500 (USD 1,500). However, it’s important to note that free zone companies may have operational restrictions compared to mainland businesses.
2. How does corporate tax work in the UAE?
Corporate tax in the UAE is levied on a company’s net income or profits, aligning with global tax standards to strengthen the country’s position as an international business hub.
- Companies with a taxable income below AED 375,000 (USD 102,000) are exempt from corporate tax.
- Income above AED 375,000 is subject to a 9% corporate tax.
- Certain industries, such as natural resource extraction, are exempt.
- Qualifying free zone companies may retain their existing tax benefits.
3. What visa options does the UAE offer?
The UAE offers several types of visas tailored to different individuals and business needs:
- Golden visa (5–10 years): Designed for investors, entrepreneurs, and highly skilled professionals, the golden visa grants long-term residency under specific conditions:
- Investors: Must invest at least AED 2 million (USD 545,000) in real estate, public funds, or businesses.
- Entrepreneurs: Must lead an innovative project, operate an SME, or generate over AED 7 million (USD 1.9 million) in revenue.
- Specialized talents: Includes professionals in medicine, science, culture, arts, engineering, and sports, as well as PhD holders.
- Recognized humanitarian and frontline figures: Individuals honored for significant contributions to society.
- Remote work visa (1 year): This visa allows business owners and employees to work remotely while residing in the UAE. Business owners must possess a company for at least one year, earn at least USD 5,000 per month, and provide bank statements for the past three months. Employees must have a one-year employment contract, earn at least USD 3,500 per month, and provide proof of remote work.
- Green visa (5 years): Aimed at freelancers and skilled professionals, this visa offers an extended stay with fewer sponsorship requirements. Freelancers hold a permit issued by the Ministry of Human Resources and Emiratisation (MOHRE), possess a bachelor’s degree, and earn at least AED 360,000 (USD 98,000) annually. Skilled professionals must have a valid employment contract, a bachelor’s degree, a salary of at least AED 15,000 (USD 4,000) per month, and a MOHRE-recognized job classification (tiers one, two, and three).
- Blue visa (10 years): A newly introduced visa for individuals contributing to environmental protection and sustainability. Eligible candidates include winners of global environmental awards as well as outstanding activists and researchers in international or non-government organizations (NGOs).
4. What infrastructure spurs business growth in the UAE?
The UAE continues to invest heavily in infrastructure to maintain its status as a global business hub:
- Palm Jebel Ali: A 13.4-square-kilometer artificial island in Dubai featuring over 80 hotels, resorts, and facilities, drawing millions of visitors annually.
- Dubai–Abu Dhabi Hyperloop: An emerging high-speed transport system capable of moving 10,000 passengers per hour, reducing travel time between Dubai and Abu Dhabi to just 12 minutes.
- Etihad Rail: A 1,200-km railway network connecting freight hubs and providing passenger services across all seven emirates.
- Guggenheim Abu Dhabi: Designed by Frank Gehry, this museum is set to open in 2025 on Saadiyat Island. It will feature art exhibitions, educational facilities, and a tech-driven art center, promoting cultural exchange.
- Zayed National Museum: Built in honor of the UAE’s founder, Sheikh Zayed bin Sultan Al Nahyan, showcasing the nation’s heritage and cultural preservation efforts.
- Dubai’s Urban Tech District: An innovation hub in Al Jaddaf, focused on sustainability, training, research, and business incubation, with a goal of achieving carbon neutrality.
5. Does the UAE offer financial support to SMEs?
The UAE government actively supports small and medium enterprises through multiple initiatives, including:
- Dubai SME: Offers financial incentives, training, and consulting services.
- Mohammed Bin Rashid Fund for SMEs: Offers funding for innovation-driven businesses.
- In5: Provides mentorship, networking opportunities, and capital access.
Dubai is also home to over 140 venture capital firms supporting startups in early and growth stages.
One of the most attractive entry points for Chinese firms is free zones, which offer a cost-effective and streamlined setup process. Among the many free zones in the UAE, Dubai International Free Zone Authority (IFZA) stands out for several reasons:
- Transparent and affordable registration fees, particularly for SMEs in trade, consulting, and services.
- Simplified registration process, allowing remote company setup within 5–7 working days.
- Broad business licensing options, allowing up to three business activities under a single license at no extra cost.
- Comprehensive consulting services, covering banking, legal, and tax advisory.
- No requirement for a physical office, with access to shared or virtual office spaces at no additional cost.
- Dedicated Chinese-speaking support staff, offering tailored assistance to Chinese enterprises.
For companies eyeing the Middle East market, the UAE remains a strategic, business-friendly destination with significant advantages in taxation, infrastructure, and market accessibility. By leveraging the right strategies and resources, businesses can establish a strong foothold in this dynamic region.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Zhao Xiaochun for 36Kr.