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An impressive number of foreign investors land in Dubai every year to leverage the unparalleled benefits offered by the emirate such as 100% foreign ownership, long-term visas, safe place for the family, strategic location, ease of doing business, modern infrastructure etc. The Department of Economy and Tourism (DET) has issued 24,662 new business licenses in Q1 2022, which means foreign entrepreneurs are increasingly attracted to the landscape of setting up a business in Dubai despite the plethora of compliances such as Economic Substance Regulations, Ultimate Beneficial Owner, Anti-Money Laundering, Value Added Tax and Corporate Tax have been introduced recently in the UAE. Hence, considering the reforms put in place by the government, a robust strategy is critical for entrepreneurs to turn the tide in their favour and ensure long-term business growth in Dubai.

Developing an effective company formation strategy needs extensive experience and expertise. However, entrepreneurs who come to the UAE to set up a company will be lacking knowledge about the laws, regulations and local market conditions. Business setup consultants in Dubai can help such investors to develop a solid strategy as they are experts in the country’s laws and regulations and can advise you on the recent reforms. Let’s analyse the major elements that must form the foundation of your winning strategy in Dubai:

Analyse the Impact of the UAE Corporate Tax

The UAE Corporate Tax will be effective from June 1^st 2023. You may be wondering why to worry about it now. This happened in 2018 when the Value Added Tax (VAT) was first introduced in the UAE. Many business owners, especially small business owners, failed to analyse the potential impact of VAT on their businesses leading to issues of non-compliance. The proposed UAE corporate tax will be levied at 9% for taxable income exceeding AED 375,000 and 0%, for taxable income not exceeding AED 375,000.

Companies incorporated in the UAE free zones (Free Zone Persons) will also be subjected to the Corporate Tax but can continue to have the tax incentives if they meet all the regulatory requirements and have adequate substance. You need to prepare for corporate tax by considering factors such as exempted entities, exempted income, transfer pricing provisions, foreign tax credits provisions, tax group formation, withholding tax etc. You can seek assistance from company setup experts in Dubai for analysing the potential impact of corporate tax on your company.

Choice of the Right Business Location

This is one of the strategic decisions you ought to make while opening a company in the UAE. The benefit of 100% foreign ownership has been one of the USPs of the UAE free zones. However, nowadays foreign entrepreneurs can open a mainland Limited Liability Company (LLC) in Dubai with 100% ownership. The previous requirement of having a UAE national sponsor holding 51% shares in the company has been scrapped for good. Even though 100% ownership is possible on the mainland in the UAE just like free zones, choice of location still is an important part of the strategy while setting up the business in the UAE. Also, the choice of the location affects the cost i.e. to rent or buy the office on the mainland. Single window services attract more investors in the free zones than in the mainland. Lastly, the presence of 40-plus free zones (some designated and some non-designated free zones as per VAT laws) makes it difficult for investors to choose the right location i.e., the right free zone to meet their business plans.

Use Appropriate Residency Options

Migrating to Dubai as a foreign investor has never been easier as the government has overhauled the residence visa system. Investors can now become residents in the UAE by applying for the UAE Golden Visa or Green Visa. These visas offer residency for up to 10 years with the option to renew upon expiry. Both Golden and Green Visa holders are allowed to sponsor their family members as well.

Investors, entrepreneurs, exceptional talents, scientists & professionals, outstanding students and graduates, humanitarian pioneers, and frontline heroes are eligible to apply for the ten-year Golden Visa. Freelancers/self-employed people, skilled employees, and investors/partners are eligible to apply for the five-year Green Visa. The advice of company formation consultants in Dubai will equip you to meet the relevant requirements.

Get Support to Ensure Regulatory Compliance

The introduction of regulations such as VAT, UBO, ESR and AML reflects the UAE’s unrelenting commitment to building a highly streamlined economy in line with global standards. You need to regularly assess whether your business falls within the scope of these regulations. If yes, you need to take the relevant actions to ensure regulatory compliance. Ensuring regulatory compliance is not a Do It Yourself (DIY) task and you may avail of business setup services in Dubai to navigate these requirements. Being on the right side of the law improves the image of your business among the authorities, banks and the public.

Think about an Exit Strategy

Your strategy for incorporating a company in Dubai will be incomplete if you fail to devise an exit plan. Your business plan will be weak and inefficient if you fail to include an exit strategy in it. Business owners must know when and how to close their business operations to avoid any kind of unforeseen events. You may consider liquidation as the best strategy to windup your business.

Build the Right Strategy with Jitendra Business Consultants

Given the dynamic landscape of company registration in Dubai, foreign investors are advised to develop a robust strategy before applying for their trade license in Dubai. You can seek the advice of business setup consultants in Dubai such as Jitendra Business Consultants (JBC) to simplify the company formation process in UAE Mainland and free zones jurisdictions. They offer bespoke services of company formation from A to Z. Moreover, JBC, being part of the Jitendra Consulting Group can strengthen your compliance status by offering services related to UBO, ESR, AML and Corporate Tax advisory. With one-stop solutions provided by JBC, you can start your dream business in Dubai on a confident note.