Today, the UAE is one of the most developed countries in the world. This nation has maintained high rates of economic growth over the past decade. The country’s economic development program until 2031 envisions a reduced role for the oil and gas industry. This creates good opportunities for developing other sectors, including foreign investors looking to start their business here. We have analyzed the investment prospects in the economy of this Middle Eastern country and will share in our article what business is better to open in the UAE.
Why Company Registration in the UAE is a Preferred Choice for Investors
The attractiveness of the Emirates for business openings by entrepreneurs from other countries is due to numerous advantages of this jurisdiction:
- A favorable business environment with a well-developed modern infrastructure for various activities, a reliable legal and banking system, political stability, and low levels of corruption.
- A beneficial geographical location opens access to large markets of several world regions (Middle East, Europe, Africa, and Southeast Asia), simplifying international trade.
- A friendly tax system and the absence of customs duties. In June 2023, a corporate profit tax was introduced in the UAE, but its rate (9%) is one of the lowest in the world. Moreover, there is still the possibility of zero taxation of company profits under certain conditions, and additional tax privileges are provided when registering a business in one of the 45 free economic zones.
- Comprehensive support from the government for innovative projects that contribute to implementing innovative developments related to computer systems, blockchain technology, and artificial intelligence. When registering a local company outside of free zones, foreign investors can qualify for government contracts and participate in tenders conducted by the state. Opening a local company no longer requires a local UAE citizen partner to own 51% of the shares for many activities.
- The presence of rapidly developing economic sectors with high potential, the opportunity for significant profits, and good prospects for business expansion facilitated by the government’s policy on economic diversification and the emergence of new promising niches with low competition.
Overview of Popular Directions for Business Registration in the UAE
The state policy of the Emirates is focused on developing innovation and diversifying entrepreneurial activities unrelated to the extraction, processing, transportation, and sale of oil, gas, and their products. When deciding what business to open in the UAE, consider the following key areas:
- Scientific and technical research — here, new technologies can be created for various sectors of the economy. The Emirates aspires to become the most significant center of technological innovations in the Middle East, and companies working in this direction will receive government support.
- Information technology and artificial intelligence — given the level of computerization in all spheres of modern society and the presence of about 200,000 companies working in various economic sectors in the country, IT services will always be in demand in the UAE, and activities in this area will consistently bring a stable high income.
- Financial technologies — this rapidly developing sector of the economy includes developing and implementing innovations in the economic sphere, allowing transactions with cryptocurrencies, operating payment systems, and online banking, which is relevant in a country where many purchases are made online.
- Healthcare — this sector currently has a high priority. Opening medical institutions and implementing the latest technologies, modern treatment, and diagnostic equipment will surely bring high returns to investors.
- Pharmaceuticals (including the development of biotechnologies and the production of medicinal drugs and medications) have become a popular direction for business registration in the UAE in recent years and have gained high priority in light of the coronavirus pandemic.
- Production of consumer goods, light industry products, and building materials also has great potential, considering the growth of the UAE’s construction industry and high consumer demand for everyday goods.
Successful Business Cases in the UAE
As an example of a successful case in the UAE, one can consider the establishment of a cryptocurrency company. To do this, you need to:
- Develop a business model — analyze the market, determine which cryptocurrency-related activities are potentially profitable, and identify the product or service your company can offer.
- Choose a jurisdiction, studying the regulatory environment in advance.
- Prepare the founding documents for the legal entity.
- Obtain a license for the chosen activities and register the company.
- Create and set up the infrastructure that will provide the technical implementation of the business’s tasks.
Following this algorithm, Awex transitioned from cryptocurrency exchanges to the cryptocurrency exchange awex.pro.
Another example is the internet platform Dubizzle, created for e-commerce in 2005, or the Entertainer app, offering coupons and vouchers for cafes, restaurants, hotels, spas, and other entertainment industry venues in 40 locations worldwide.
When choosing what business to open in the UAE, finding a good business idea is essential; the conditions created in the Emirates will help you succeed in your endeavors.
This article is purely informative. For professional legal advice on choosing a profitable niche for starting a business, you can consult Dynasty Business Adviser’s managers.