The Challenges and Benefits of Expanding to Dubai

Despite its relatively small size, the emirate of Dubai has transformed itself from a local trading outpost into one of the world’s busiest, most popular business destinations.

Here, Galvin International explores what you need to know about expansion to Dubai – from the potential benefits to challenges you may need to overcome.

The Benefits

Economic incentives

Dubai has an extremely strong economy that is continuing to grow and diversify all the time, both of which are naturally very conducive to foreign and domestic businesses.

However, the most significant benefit for businesses coming to Dubai from overseas is the existence of free zones – business areas in which foreign investors can operate completely free of income tax and retain total ownership of their company.

Infrastructure

The burgeoning economy, and its successful pivot away from a reliance on oil revenues, has helped Dubai to establish one of the most secure, business-friendly infrastructures in the world. As well as a major airline and one of the world’s busiest ports, the richness of the city’s corporate network is a huge potential benefit for anyone looking to do business in the emirate.

Quality of life

If you’re planning on moving staff abroad as part of your expansion, a destination with an extremely high quality of life is always a smart move – both for persuading staff and their families to make the move, and for retaining them once they have.

Dubai can offer expatriate employees an extremely attractive proposition, boasting both the strong infrastructure mentioned previously, and a seemingly endless plethora of cultural highlights – from world famous restaurants and shopping to an indoor ski resort and the world’s tallest building, the Burj Khallifa.

The Challenges

Free zone restrictions

While free zones remain one of the most attractive elements of business in Dubai to many, they also come with significant restrictions. Most notably, any company set up within a free zone has their business activity confined to that zone exclusively. They also have to restrict their activities to the business type in their free zone licence. Each free zone has its own bureaucracy, so you’ll be dependant on a local compliance advisor who can charge high fees.

Businesses who aren’t happy with these restrictions should therefore consider getting a Dubai mainland licence which can retain tax advantages while lowering operating costs.

Cultural differences

The UAE is a deeply religious, Muslim country, and therefore has strict rules regarding certain types of behaviour and ethics. For example, eating in public during Ramadan, female attire deemed to be immodest and public displays of affection are all frowned upon, and can even attract the attention of the authorities. Foreign staff can unwittingly fall foul of local laws.

Though there is much about Dubai that will make doing business or being permanently based there a markedly unique experience, it also carries significant potential benefits. Companies willing to embrace and navigate these differences can find a great deal of success there. If you’re considering international expansion to Dubai or any other location, Galvin International can help.

Our international expansion concierge service untangles the complexities of the expansion process, offering expert advice, custom solutions and on-ground support with implementation to ensure that your expansion is a success.

Get in touch with us today to learn how we can help your business achieve overseas growth.

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Contact: John Galvin
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