There must be few who must have not heard about ‘Dubai’. To many (and rightly so), Dubai means lots of shopping at the Dubai shopping festival, tons of adventure in the desert safaris, enjoying charismatic panoramic views from the deck of the iconic Burj Khalifa.
Dubai certainly has something for everyone. But behind all this excitement and adventure lies the backbone of it all the strong economy of Dubai.
Today we bring you a few exciting facts about Dubai’s economy which are not widely known.
Read on. So that next time you are enjoying a delicious meal in a Dubai restaurant or attending a business conference you know exactly what goes behind making Dubai a global acclaimed city.
- No longer only Oil industry
It is a well-known fact that Dubai’s economy was built from the Oil industry. The economy flourished for many decades from petrochemical, and natural gas. But what is noteworthy is that the economy has diversified over the past few decades and oil and petrochemical industry contribution is toe gross domestic product is less than 5%. Other industries are rising, take tourism, for example, Tourism contributes to 20% of the GDP
- Strategic location
Dubai is located strategically between the Far East and Europe on the East-West axis and between the central Americas and Africa on the north-south axis. It is adequately connected with developed countries in Europe, Asia, the Americas and Africa by airways and waterways. This gives it advantages in terms of connectivity and foreign trade.
Did you know, around 120 shipping lines and routes and 85 airlines connect Dubai to the rest of the world and vice-versa?
- Market of Dubai
The market of Dubai is quite a large one with 1.5 billion people in the neighboring regions, the Middle East, and gulf, America, Africa and Europe. Post the liberalization, the economy has grown at a phenomenal rate of 11 % till date. The market is diversified and caters to developing and established businesses alike. In terms of raw materials and product supply, there is extensive and cheap energy available, vital agricultural export commodities are also readily available.
And above all, there are hardly any quotas, exchange control or stringent import-export laws.
- Favorable political environment
The political conditions largely decide the economic prosperity of the country or the city. Unstable political conditions are never good for the economy of the country. On the other hand, in case the political conditions are stable, then the economy booms, this is because the government policies are stable, the stock market is strong and interested people trust the nation more to conduct business with it. This is what is exactly is working for Dubai. The government is stable and is pro-business & pro-investment; the government’s policies are liberal and flexible and policies are placed around protection of intellectual property rights. The legal framework around company formation in Dubai is very simple and sound.
- Company formation rules and ownerships practices
A major chunk of Gross Domestic Product comes from the Tourism industry. A large number of foreign companies have either offshore companies or regional branch offices in Dubai. Global conglomerates like Facebook, Google, SAP, and Accenture have set up base in Dubai. A major reason behind this huge movement of big companies to Dubai is ownership rules.
Ownership rules are pro-foreigners as the government aims to drive foreign capital inflow into the region. Foreigners can have ownership rights of up to 49% in case of Limited Liabilities Company and 100% for professional companies, branches, and free zone companies.
Speaking of frees zones, it a concept that is fast catching up all over UAE. Within Dubai, there is Dubai airport free zone, Dubai internet city, Jebel Ali free zone, and Dubai media city. In other emirates, there is Ajman Free zone, Abu Dhabi Free zone who are attracting foreign business owners from all over the world.
- Splendid, world-class infrastructure and support system
The Dubai government has invested heavily in all areas-whether it is transportation or telecommunications, industrial infrastructure or energy, Dubai has one of the best infrastructures in the world. This world-class international infrastructure has attracted talent from all over the world. There are exceptional business centers, modern highway systems, state of the art telecommunications and internet connectivity, reliable and reasonable power supply, and utility systems.
There is no dearth of business centers, IT business parks, conference facilities, office spaces, commercial complexes, and shipping & freight companies. To complement the business requirements there is state of the art residential complexes, schools, hospitals, shopping centers, and other recreational facilities.
- Pool of talent
In case you are thinking of setting up your business in Dubai or opening a branch or regional office in Dubai, then manpower accumulation will not be a concern for you at all. Here’s why, trained professionals from all over the world like business consultants, marketing professionals, industry experts, medical experts, lawyers etc provide support to business owners in Dubai. In addition to this, skilled and unskilled manpower is also abundant at any given time in Dubai.
- A wide variety of export products courtesy rapidly expanding manufacturing sector
Like we mentioned before, the GDP of Dubai is no longer derived just from the oil and petrochemical industry, and a booming sector is a manufacturing sector which is giving momentum to export business. Aluminum, metal products, clothing and garments, gold and other jewelry, textile, consumer goods, electronics, food products, and non-metallic mineral products are a few of the manufactured foods which are being exported out of Dubai.
- Lower than ever cost structure and tax benefits
Did you know that any business set up within a free zone enjoys tax benefits like 0% corporate tax, 0% professional tax and no customs duties? In addition to this, a number of other costs like below are also cut because of flexible government policies.
- No trade barriers or quotas
- No foreign exchange controls
- Competitive real estate and labor costs
- Competitive energy costs
- High levels of liquidity and competitive financing costs
All the above features make it the overall cost of doing business very nominal.
- Local culture, high quality of life and amicable living conditions
There is excellent infrastructure, modern housing amenities, low crime rates, tolerance and cultural diversity, a cosmopolitan lifestyle which makes Dubai a sought-after destination for settling down in life. Clean beaches, cozy winters, and delectable Arabic cuisine are added benefits.
Dubai is on the path to becoming the fastest growing emerging economy. According to Emirates Economic Development Committee, the economy of Dubai is expected to grow 3.1% in 2017, following growth of 2.7% in 2016
In such fertile conditions for business establishment, business setup in Dubai seems like a lucrative opportunity. It doesn’t matter if you are a seasoned business person who wants to open a regional company center in Dubai or you are a budding entrepreneur willing to start your own startup- Look no further than Dubai. It is advised to go ahead with a consultation of international business consultant Commitbiz, who have years of business setup experience. With Commitbiz team you can rest assured about your entrepreneurial venture set up and focus on running your venture profitable.
So, don’t wait anymore, do contact us today.