Naresh Shah, a director of Russell Bedford (Dubai) Limited, explains how doing business in Dubai can be richly rewarding if approached in the right way.

Welcome to Dubai

In little more than a decade, Dubai has transformed itself from a modest desert trading outpost into a progressive and internationally acknowledged home to business. Today's thriving Dubai has become a world leader in commerce, trade and industry, technology and premium real estate.

Dubai has embarked upon a major development of itself as an international financial centre. Iconic mixed use, hotel and entertainment property developments further demonstrate Dubai's place at the forefront of progress, innovation and modern lifestyle. Alongside all of this, it has focused on developing its tourism industry.

Surprisingly, Dubai is not a petro-economy. The petroleum sector accounts for just a tiny percentage of Dubai's enormous wealth. Instead, Dubai has become an international benchmark because of the Emirate's dedication to excellence, service and the bottom line.

Emirates Airline, Dubai Ports, Dubai Holdings, Emaar Properties and Jumeirah are just a few of the many successful brands associated closely with commercial success and Dubai.

This growth means that Dubai is now not only one of the Middle East's key commercial centres, it is also the primary regional hub for international business.

Doing business in Dubai

Operating a business in Dubai can be richly rewarding.

Geographically and culturally, Dubai is ideally placed to reach consumers in the rapidly growing markets of the Middle East, Africa and Asia. And in addition to its excellent location, Dubai also offers a combination of ease of business set-up, minimal foreign ownership restrictions, first-class communication and transport infrastructure, and relaxed immigration formalities for expatriate work-forces.

Moreover, Dubai-based enterprises enjoy a benign tax environment. Most businesses, with a few exceptions, operate with no direct corporate tax, capital gains tax or withholding tax on dividends, interest or royalty flows. And as Dubai is part of the UAE, businesses will often benefit from the over forty international tax treaties currently in force. Subject to anti-money laundering regulations, there are no restrictions on the inward or outward remittance of funds in any major currency.

In terms of the practicalities, the most common ways for foreign parties to conduct business in Dubai are:
- establishing a Dubai branch office;
- establishing a Dubai limited liability company;
- establishing a Free Zone vehicle;
- appointing an agent already licensed in Dubai; or
- entering into a secondment arrangement with an appropriately licensed Dubai party.

Of course, the choice of arrangement must be considered carefully, and will depend upon factors such as the activities, purpose and size of the intended operations.

Dubai has a number of Free Zones designated to encourage specific business sectors. Enterprises establishing themselves in one of the Free Zones do not require local sponsors but will need expert guidance through the procedures that must be followed before a business can be registered.

Elsewhere in Dubai, local sponsorship is required in order to commence a business, which effectively means that 51% must be owned by a local UAE national.

Always obtain appropriate professional advice

Dubai is a unique place, and its systems and structures differ significantly from those in Europe, North America and Asia. It can be tempting to take risks in acting on a potentially lucrative business opportunity, but this may subsequently give rise to significant issues.

To be successful, a new business must be properly established. It is critical to appoint professional advisors who understand Dubai, its legal framework and its surrounding geographic and economic contexts.

Russell Bedford (Dubai) Limited

At Russell Bedford (Dubai) Limited, we are ideally placed to advise you on the optimum means of establishing your business in the region and securing the benefits that Dubai can offer.

We are a full-service auditing and accounting practice licensed in the Dubai International Financial Centre. The firm possesses a world-class base of cross-disciplinary professionals who are available to assist clients with all issues relating to business start-up and operation, transactions, licensing and regulatory matters. Where required, the firm can draw on professional support from the Russell Bedford International global network that now operates through more than 200 offices in over 70 countries.

Russell Bedford (Dubai) will guide you carefully through the maze of local procedures, regulations and requirements necessary to establish a potentially successful and compliant business. A comprehensive meet-and-greet and hand-holding service is available to businesses new to Dubai.

Remember: guidance through local regulations and requirements is fundamental; local knowledge on the ground is vital.