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Saeed Khalifa Mohammed Al Fuqaei
The United Arab Emirates (UAE) was officially formed in 1971 and established diplomatic relations with India in 1972. The two countries have enjoyed strong bilateral ties for decades, not just in terms of advantageous commercial exchanges, but also people, culture, cuisine, and more. The Indian community is the most populous expat community in the UAE. It is also one of the most prosperous communities in the country.
According to the Indian Ministry of External Affairs’ February 2020 brief ‘India-UAE Bilateral Relations’, the yearly trade exchange between the two nations amounted to USD 180 million in the 1970s. By 2019, India was one of the top commercial partners of the UAE, with a trade value of USD 60 billion. How did this happen? What about the UAE has been attracting investors and entrepreneurs from all over the world, especially India?
Dismissing popular belief about Gulf countries, this young, multi-sector economy is not dependent on oil. In fact, oil contributes just 5 per cent to its GDP. In the twentieth century, the income generated from oil was used to develop its world-class infrastructure. Thus, post the construction boom, the Emirate of Dubai became a global brand. Soon, this city of gold, skyscrapers and beautiful beaches also became a reputable trade, transit and tourist destination.
Why Invest in the UAE?
The world is two years into the pandemic, with global health experts continuing to seek solutions for combating the virus variants. Several economies are striving to regain stability, albeit slowly, and are opening their borders to the world in phases. In contrast, the UAE’s economy is well on its way to normalcy, even recording its strongest growth in the last two years.
The primary reasons that make UAE a fertile ground for Indian businesses to flourish could be listed as follows:
1. Strategic location
The UAE’s location on the world map has been a major contributor towards its popularity. Not only is it a renowned tourist and business destination but also as a transit port, for passengers and goods alike. The UAE is easy to travel to and from anywhere around the world. It is well-connected with almost every continent, be it Africa, Europe, the Americas, or Australia.
Because the UAE is such a popular business hub, the market is also active during the European and American time-zones. This means, businesses in the UAE that work across international time-zones, or those that deal with international connections, do not take a hit.
As one of the world’s biggest and fastest-growing passenger and cargo hubs, Dubai’s airports – Dubai International (DXB) and Dubai World Central (DWC) – serve 270 destinations and provide easy global connectivity. UAE is also home to three other major international airports and two world-class airlines – Emirates and Etihad Airways.
The UAE, and Dubai in particular, is a leading global centre of trade. The Jebel Ali Port in Dubai is ranked as the ninth busiest port on earth and is amongst the largest container ports in the word. It offers proximity to manufacturers and suppliers in the Arabian Gulf, Indian and African subcontinents, as well as the Commonwealth Independent States (CIS).
2. 100 per cent expat ownership
Recent amendments made to the UAE Commercial Companies Law eliminates the need for a foreign businessowner to mandatorily partner with an Emirati sponsor. Previously, expat owners were not only required to bring on a local partner but also had to assign 51 per cent company shares to the Emirati partner.
Presently, there are over 2,300 business activities allowed in Dubai, of which, a majority can now be solely owned by expats. Thus, not just professional service providers, but commercial and industrial businessowners can also enjoy 100 per cent ownership of their enterprises.
This initiative was welcomed with open arms by the local business community as well as international investors who can now have absolute legal control over their UAE company’s finances and operations.
3. Tax-friendly
UAE is one of the most tax-friendly countries in the world for business as well as living. It is one of the primary reasons why investors are drawn to Dubai. There is no corporate tax in the UAE, neither are there income or sales taxes. This means businessowners get to keep all the profits that they make.
The corporate tax rate in India is upwards of 22 per cent, not to mention the addition of cess and surcharge rates that are incurred over and above the corporate tax amount. This explains why the UAE is home to an overwhelming number of Indian business owners.
4. Open to the World
With all safety measures in place, Dubai commendably opened itself for business and tourists within a few months of imposing minimal movement restrictions and carrying out massive disinfection and vaccination programmes. Thanks to its nationwide vaccine rollout, the UAE became the world’s first country to have the maximum number of fully vaccinated residents. Currently, over 88 per cent of the country’s population has been fully vaccinated.
As a result, people confined to their homes for months due to lockdowns in different parts of the world are making their way to Dubai for a getaway. Since Q4 of 2021, the UAE is fully open to the world. Airports and national carriers are operating at 100 per cent capacity, and the country is running at pre-Covid levels. This has further cemented investors’ beliefs that the city is highly conducive for business growth, now more than ever.
5. Technology and innovation
The pandemic pushed several businesses to the brink, making them realize that digitalization was no longer a luxury, or something to consider for future, but an unavoidable necessity for survival. Thanks to the foresight of Dubai’s leadership, the city began adopting and implementing technological reforms a decade before the pandemic struck.
In a bid to align itself with the vision of becoming a smart city, Dubai’s futuristic governance has been facilitating the city’s digital transformation with the application of latest technological tools such as blockchain, virtual reality, and artificial intelligence.
Furthermore, the Dubai 2040 plan (Urban Master Plan) is also underway. The government aims to make the city sustainable for its residents, their families, and visitors alike. Therefore, over the next eighteen years, the government’s goal is to advance its residents’ happiness and quality of life to reinforce Dubai as a destination for people from around the globe to invest and reside in. Any investor would want to become a part of this dynamic ecosystem.
6. Quality of life
Voted one of the safest cities in the world to live and work in, Dubai life spells convenience for people from all walks of life. Home to about 10 million people, over 88 per cent of the UAE’s population is made up of expats. Of these, Indians constitute the largest segment, making up over 27 per cent of the country’s population.
There are multiple reasons why Dubai has been successful in retaining its residents – world-class infrastructure, ease of commute, well-organized bureaucracy, lifestyle and safety standards, and provisions for entertainment. Western expats often call Dubai a luxurious holiday destination offering endless summers that they seek.
However, those who have never visited may have reservations about living in a Middle Eastern city. Earlier portrayed in mainstream cinema as hot, crowded, unorganized, and basically ‘unfit’ for people residing in the developed nations of the West, the quality of life in Dubai could not be more different. From arrangements for people of various religions to respectfully practise their faiths to family entertainment and adventure sports, Dubai has it all!
7. Expo 2020 Dubai
A first-ever in the Middle East, Africa, and South Asia (MEASA) region, Dubai is hosting the ‘world’s greatest show’, featuring pavilions of 192 countries and event partners. So far, the Emirate has hosted well over 10 million global community members, showcasing and introducing ‘life-changing’ innovations for a better future. With the primary themes of opportunity, mobility and sustainability, the Dubai government is paving the roadmap for key economical, developmental and cultural trends of the post-COVID-19 era through this event.
Expo 2020 and Its Positive Impact on the UAE Business Environment
The international expo has been serving as a lucrative platform for global entrepreneurs to explore business opportunities, connect and collaborate. It has signalled positive business sentiment across Dubai and investor confidence in the city has seen an enormous increase with the onset of the mega event.
Within the first month of its commencement, the city witnessed a wave of positivity that was missing due to the outbreak of the Covid-19 pandemic since early 2020. Dubai is now halfway through the six-month-long mega exhibition and the coming months and the future hold great promise and potential for the business community in the city.
A game changer for businesses in Dubai, it recorded over 2.3 million visitors during its first month alone and is geared to achieve its 25-million-visitors target, with a few more months still to go. This influx of visitors has not only boosted spending in the UAE but has also increased investment and employment opportunities in the country.
While hospitality, tourism and trade sectors have been seeing the most business activity, the World Fair is also paving the way for further diversification of Dubai’s business industry. Many new trade activities are making an entry into the UAE market, most notably those with a focus on sustainable development. This has opened the gates for ecopreneurs as well as technologically advanced and new-age businesses to find a footing in Dubai.
Since the UAE fully opened its borders to the world, investors and entrepreneurs are making a beeline for Dubai to establish their ventures in the city of the future. And why wouldn’t they? Dubai has cemented its position as one of the most desirable cities to live in – not just in terms of safety and stability but also for its standard of living, exceptional infrastructural development, handling of the pandemic, and harmonious cultural and religious integration.
Largest networking platform
The Expo is offering investors a networking platform unlike any seen before. Networking is crucial for the growth of one’s business. In a world largely confined indoors due to the pandemic, the Expo is giving entrepreneurs and investors the opportunity to visit and interact with international delegates and like-minded individuals from almost 200 countries in a controlled and safe environment.
Investor-friendly initiatives
As more initiatives are being rolled out to encourage and support entrepreneurs, including complete foreign ownership of business, golden visas, reduced costs of starting in the city, and tax-friendly policies, the business confidence in Dubai on an upward swing. To add to this, the city has also set an excellent example of governance and planning – steering the economy towards stabilization, and taking it further towards prosperity, even in the times of a global pandemic.
Long-term residency – golden visas
UAE has introduced many investor-friendly policies over the years. One such policy is long-term UAE residency visa for expats. Obtaining UAE residency is much coveted, especially among the Indian community in the country. While the idea of a long-term residency visa had been in the talks for a few years, it was finally rolled out in 2019 and is known as the UAE Golden Visa.
These visas were launched to reward exceptional minds and talents in the country and to retain them. It was also initiated to simplify UAE business setup and to create an attractive and conducive investment environment for investors, entrepreneurs and professionals. Since its launch, more than 400 entrepreneurs and investors as well as over forty celebrities from around the world have received the UAE golden visa. Some of the recipients include Shah Rukh Khan, Cristiano Ronaldo, Chef Izu, Novak Djokovic and Giorgio Armani.
A common misconception about the UAE golden visa is that one must be a high-net-worth individual to be eligible. This is not the case. Anyone who has played a significant role in, or has contributed towards, the development and growth of the UAE and its economy is eligible to apply for the golden visa.
Golden Visa Categories
The UAE government has identified different groups of individuals who can apply for these long-term visas. Depending on the group under which you fall, the qualification and submission requirements will differ, as will the validity of the visa.
There are two categories of golden visas in the UAE:
• 5-year visa
• 10-year visa
The advantage of having a golden visa is that you do not need a local (Emirati) sponsor to facilitate your UAE residency process. As a golden visa holder, you will be your own sponsor and upon completion of your visa term, you can renew the visa on a conditional basis.
Eligibility criteria for UAE Golden Visa
Each visa category has its respective qualification criteria. To apply for a golden visa in the UAE, you must fulfil at least one of the following requirements and prerequisites.
10-year golden visa
Who can apply?
• Investors in public investment funds
• Commercial investors
• Term deposit investors
Owners of specialized talents and researchers in various fields of science, knowledge, culture and art
• Doctors
• Scientists
• Creative people
• Inventors
• Executive Directors
• Athletes
• Specialists in the fields of engineering and science
Requirement for Investors
Your investment should be in at least one of the following forms:
• You must have made a deposit of at least AED 10 million in an investment fund in the UAE.
• You must be an owner of a company with a minimum capital investment of AED 10 million.
• You must be a shareholder in a company, with a share of up to AED 10 million.
Prerequisites for Visa Application
All the conditions listed below must be met:
• You must maintain your investment for a minimum of 3 years.
• You must have insurance documents for yourself as well as your dependents.
• Investments made using loaned funds will not be considered. The amount invested should be solely yours and adequate proof must be submitted to substantiate your claim.
The 10-year golden visa can include your spouse and children. It can also be extended to include your business partners, provided that each partner contributes AED 10 million.
If applying for the 10-year visa, you will be allowed multiple entries into the UAE for a period of six months to complete your application process.
5-year golden visa
Who can apply?
• Real estate investors
• Entrepreneurs
• Exceptional students
Requirement for Investors
All the conditions listed below must be met:
• You must have invested a minimum of AED 5 million in a property in the UAE.
• The amount invested in the property must not be paid on a loan basis.
• You must have been in possession of the property for a minimum of 3 years.
• If the property is mortgaged, you will need to submit an NOC from your bank.
Requirement for Entrepreneurs
All the conditions listed below must be met:
• You must have an existing project of at least AED 500,000.
• Your venture should be recognized as an accredited business incubator in the UAE.
Prerequisites for Visa Application
All the conditions listed below must be met:
• You must be recognized as a founder of the project.
• Your business project must be in a field recognized by the country.
• You must have health insurance documents for yourself as well as your dependents.
• Your business incubator should support start-ups and other enterprises by providing relevant resources and services. It should be certified by the relevant authorities.
The 5-year golden visa can be extended to your spouse and children.
Entrepreneurs have the provision to upgrade their 5-year visa to a 10-year visa if they meet the necessary requirements. You will be allowed multiple entries into the UAE for a period of six months to complete your application process.
City of the future
Dubai is, without a doubt, a futuristic city. It keeps up with latest technologies, believes in the power of science and innovation, and implements the same for the good of its citizens and residents. Dubai advocates diversification and is focused on development through transformation of key sectors. The Expo is displaying the city’s efforts at developing first-of-its-kind innovations to promote new-age solutions and global collaborations. Prospering in such a city is certain.
Because it serves as a gateway to the global market, Dubai is a popular business destination. The Expo has assembled and is showcasing brilliant ideas and innovative solutions from around the world. It is also fostering positive international relations in the process. With major international sporting, entertainment and trade events taking place in the UAE, the country’s events sector is witnessing a boom. Dubai also has plans to execute measures towards strategic sustainable urbanization, thereby creating value and greater opportunities for businesses in the region.
Dubai is all set to be the smartest and most sustainable city. It is no surprise then that in the post-COVID era, there is no better place to be than in the UAE to reboot your entrepreneurial aspirations. Therefore, it would be a good move for Indian entrepreneurs to establish their presence in Dubai during this period. Shuraa Business Setup can help you with all your Dubai and UAE company formation requirements in the most seamless way.
About the Author
Saeed Khalifa Mohammed Al Fuqaei is the Founder and Chairman of Shuraa Group. Shuraa Business Setup, the conglomerate’s core company, was founded in 2001, and is a leading company formation and corporate services provider in the UAE. With over twenty years of expertise and a highly experienced and competent team comprising lawyers, certified accountants, tax consultants, translators, well-connected public relations officers, and corporate advisors with extensive knowledge of the UAE’s operational framework, Shuraa has helped more than 35,000 entrepreneurs start their UAE business journeys. www.shuraa.com
