The Middle East is one of the most sought locations in the world by everyone. Be it, investors or entrepreneurs, tourists or people in business, everyone wants a piece of the UAE. The Middle East, especially Dubai, has a breath-taking skyline with skyscrapers reaching the clouds. There are various buildings that would take your breath away, and there are plans of the government and the private sector to make more of such astonishing marvels.
Such constructions include buildings that touch the sky (Burj Khalifa) or an utterly human-made island (the island of Palm Jumeirah). These constructions are not only a spectacle to watch but are also either dedicated to business and office space or are residential places. In both cases, there are no compromises in the amenities provided to the people utilizing such constructions for their daily work.
The upcoming major event of the World Expo 2020 is a head turner and will make Dubai, the hotspot for people all around the world. Costing almost $8.1 billion, no expense has been left, and constructions related to the expo are on full swing. The massive demand for construction in the Middle East has made the construction business a very lucrative option if you want to incorporate a construction business in the UAE.
Reasons to Start a Construction Business
The construction business is one of the businesses that the government is looking towards to help in the diversification of the economy. There are various benefits in starting a construction business in the UAE such as easy availability of construction license, government support, rise in the footfalls of tourists etc. which are described below:
1. Increasing Opportunities
The government of the UAE has taken initiatives in various sectors and is trying hard to diversify the economy of the country. These initiatives are expected to increase foreign investments in the country gradually. Various efforts by the government such as National Strategy for Higher Education 2030, The energy strategy 2050, Sheikh Zayed Housing Programme and the Dubai Tourism Strategy ensure that the construction industry in the country has a very positive outlook.
2. Diversifying Economy
The diversification of the economy plays a significant role in opening up a new avenue for the people to invest in the construction sector of the country. Mega Projects like the Dubai Hills Estate, Dubai South and one of the preparations of the significant worldwide event which is the Dubai Expo 2020 will bring in visitors and investors from all portions of the world and will ensure that there is no lack of any construction activity.
3. Low Construction Costs
The diversification of the economy has resulted in the lowering of construction costs. In comparison, the UAE has one of the most economical construction costs than other developed cities all around the world such as New York, Doha, Paris, San Francisco etc. This lowering of fees is due to the increasing competition in the construction sector and also the competition among the various GCC countries. Low wages also play an essential role in the lowering of construction costs.
4. Available Labour
The availability of labour poses a huge question in any of the construction activities. There is a global shortage of productive and skilled labour in the world, but the Middle East region seems to defy this global shortage. The low wages of the labours in the UAE also makes it a very profitable place to set up a construction business.
5. Easy Availability of Licences and Permits
Getting the necessary permits and licenses for the construction business has been simplified. A new strategy for Building Permit Procedures Development in Dubai has been approved by His Highness Sheikh Mohammed bin Rashid Al Maktoum. This strategy will make sure that there is no hindrance to the process of getting the licenses from the government.
For details on how to obtain a construction license in Dubai, Read Guide to Obtain a Construction License in Dubai in 2019
6. Government Promotion
The government of the UAE is taking steps to ensure that visitors and investors from all over the world visit the country. The country provides various benefits and features to the companies which set up their business in the UAE.
7. Rising Investments
The newly passed FDI law in 2018, will increase the flow of Foreign Direct Investments by almost 20%. This report was given by the Ministry of Economy of the UAE. The attraction of the FDI is critical to the sustainable development of any country and in the case of UAE, economic diversification. According to the International Monetary Fund (IMF), the GDP of the country will experience a rise of almost 3.7% in the year 2019.
8. Good Return on Investments
The increasing competition, the upcoming major global events and the tax-free environment allows the various construction companies to give a good return on investment. Moreover, increasing visitors and tourists from all parts of the world form a significant factor, which makes sure that there is a constant flow of FDI.
9. Easy Transportation
There is a vast network of roadways that connects one emirate to another, making transportation very easy. Easy transit will increase the availability of both resources and labour for a company.
Starting a business in Dubai, and moreover, a construction company can be a very profitable option in the UAE if done right. With Expo 2020 around the corner, there are a lot of opportunities to tap into this sector. Having construction experience will help in the starting of a construction company, but some research needs to be done to understand the standards and the benchmark of the industry properly.
Are you looking to set up a construction business in UAE? If so, then you must avail of the services of Commitbiz Management Consultants. Commitbiz will provide you with all the necessary information which will be required to set up a Construction company or a consultancy. For further details on the services of Commitbiz – do contact us. We would be happy to help.