Dubai - The Agrabah of Dreamers
We all have heard about the famous Agrabah city from Disney’s movie Aladdin. Dubai is one such city in the world. The city of numerous possibility and man-made wonders with a vision to become the best in the world. There has been much talk about Dubai and it’s sustainability over the last decade, and with EXPO 2020 Dubai aspires to create a sustainable future for itself. With the past experience of EXPO’s and it’s failures, can Dubai achieve the remarkable vision it’s aiming towards? So how is Dubai making things easy for businesses to grow, Let’s take a look into promising opportunities that lay ahead.
Well distributed Trade Zones
Dubai’s strategic geo-location makes it the most attractive and user-friendly place to do business and reach the global market. The unique setup providing Industry specific locations to each business makes it more significant and easy to use. Example: If you are providing business services related to Technology and Telecommunications — Dubai Internet City (which is a Free Zone) is the perfect place for the setup. With companies like Microsoft, Accenture, Oracle, SAP, Google, IBM already having established, it offers a vast area of scope for Mid-Sized service providers to make their mark along with the giants.
What is more exciting is Free Trade Zone setup for each Industry — Dubai Media City, Dubai Production City, Dubai Design District, Dubai Airport Free Zone, Dubai Healthcare City, Dubai International Financial Centre (DIFC), Dubai Gold and Diamond Park, Dubai Silicon Oasis (DSO), And the most famous Jebel Ali Free Zone — For Manufacturing and Industrial Companies. These Free Zones offer complete tax concessions and customs duty benefits to expatriate investors, working under the respective authority of the zone and special framework designed for rules and regulations.
Steady Economy?
Dubai’s economy grew upto 2.1% in the first half of 2019 with a constant GDP of Dh208.2 billion. The business flexibility and new initiatives for modern day businesses helped the Emirate with a steady economic growth despite global market uncertainty. The wholesale and retail sector has seen an upward inclination helping the external trade growth. The Transportation sector too has seen a slight improvement. Although with a huge loss in the Real Estate and Construction Sector, the Emirates is trying to recover with property prices falling year by year. With more than 80,000 units to be handed over by 2020 and 2021, it is expected that Real Estate prices will further decline by 10% to 15% in the coming years.
Dubai is the home to one of the biggest, finest and luxurious Hotel’s in the world. Hospitality industry has seen a significant growth in both demand and supply due to the preparations of the on-going EXPO 2020. Clearly EXPO 2020 is the Headline Event for the region as it looks towards creating more jobs and increasing the economy.
Regulations & Tax
In 2018, UAE implemented VAT (Value Added Tax) across the 7 Emirates. The sole purpose of implementing a TAX structure was to generate maximum revenue with regulation of cash inflow and outflow. UAE indeed beats many countries in the normal standard of living by providing numerous public services, consisting of hospitals, roads, public colleges, parks, waste control, and police services etc. The payment for all these public services is purely generated from the government budgets.
In this connection, the government of UAE bought in the VAT regulation in-order to generate a new source of income. But is this too much too soon? There is no deniable that VAT has significant economical advantages, but there can be a backfire to this phenomena. There is no unilateral phenomenon. The resultant negative economic and social phenomena need to be addressed and mitigated.
Startup Economy
Dubai is the Startup Hubspot. With more businesses flowing in, the economy and the startup eco-system is surely getting strong. For a region in the Middle East which is trying to build an oil-free economy, Startups play a very crucial and vital role for sustainability. With a stronger economy, Dubai and UAE can help Entrepreneurs grow fast and bring in more talented resources. In 2019, UAE bought a new law for Resident VISA’s, which will allow Expats to obtain extended Resident Visas in the UAE even after retirement. This particular move, no doubt has given Dubai the much needed edge, especially for young Entrepreneurs to help nurture longer growth. The CON — UAE is an expensive country for a Startup. The cost of starting a business in the UAE is almost double than the other regions in the GCC with the over head costs of managing the operations in the region. The PRO — Full ownership of your business as discussed above through the Free Zones.
Industry leaders have predicted that UAE economy will grow significantly by 20% between 2020 to 2030 and with a wealth of initiatives aimed towards attracting and bringing in Entrepreneurs and helping startups grow, this looks like an ideal time to launch a business here in the Emirates.
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References:
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