More and more entrepreneurs are emigrating to Dubai. But what advantages does Dubai actually offer and what should be considered when relocating? Why is tax advice for Dubai so important in advance? We explain.
Dubai is one of the leading business hubs in the Middle East and an important center for international trade and investment. The city is known for its advanced infrastructure and dynamic approach to business, which offers numerous opportunities for entrepreneurs.
Advantages of Dubai
Geographical Location of Dubai
A major advantage of Dubai for entrepreneurs is its geographical location. The city is located in the heart of the Middle East, making it an important hub for trade between Europe, Asia and Africa. If you are based in Dubai, you can benefit from this strategic location and offer your products and services to a wide geographical area.
Liberal economic system in Dubai
Another factor that makes Dubai attractive to entrepreneurs is the city’s liberal economic system. Dubai has an open economic system that allows foreign investors to easily invest and operate in the city. Entrepreneurs based in Dubai benefit from a stable political and economic environment as well as low tax rates and a free market.
Taxes in Dubai
Of course, Dubai is not only known for the advantages of its city. Many entrepreneurs are also attracted by Dubai’s low tax rates. They enable companies to invest and grow. There is no income tax and no value added tax (VAT) in Dubai, which makes it attractive for entrepreneurs to set up in the city.
However, companies based in Dubai must pay corporate tax on their profits. Corporate tax rates in Dubai vary depending on the industry and can range from 0% to 20% . It is therefore advisable that you inform yourself about the tax rates in the respective industry before you decide to invest in Dubai.
Dubai also has a comprehensive Double Taxation Agreement (DTT) with numerous countries, which helps you avoid taxes levied in more than one country. Thanks to these agreements, you can organize your taxes in a more effective and fairer way. Here you can find a list of countries with which Dubai has a double taxation agreement: https://taxsummaries.pwc.com/united-arab-emirates/corporate/withholding-taxes
Unfortunately, Germany is not one of them.
Infrastructure of Dubai
Dubai is also known for its advanced infrastructure. The city has a well-developed road, rail and air transportation system that enables companies to deliver their products and services quickly and reliably. Dubai is also home to one of the largest and most modern seaports in the world, making it an important center for international trade.
Culture of Dubai
Finally, Dubai also offers a vibrant and diverse culture that allows companies to attract talent from all over the world. The city is home to people from all corners of the globe and has a rich cultural landscape that helps entrepreneurs build a motivated and talented team.
Technology and digitalization landscape
Another advantage of Dubai for entrepreneurs is its advanced technology and digitalization landscape. The city is investing heavily in technology and aims to become a leading center for digital innovation and entrepreneurship. Entrepreneurs based in Dubai have access to modern technological facilities and resources to help them realize and grow their business ideas.
Leisure activities in Dubai
The tourism and leisure facilities in Dubai are also attractive for entrepreneurs. The city is known for its luxurious hotels, shopping centers and entertainment options and attracts millions of tourists every year. Entrepreneurs working in the tourism and leisure sector have good opportunities to build and grow their business in Dubai.
Career opportunities in Dubai
In general, Dubai is an attractive destination for people who want to build their career in an international and dynamic environment. The city is home to people from all parts of the world and offers a rich cultural landscape that allows people to gain new skills and experiences.
Disadvantages of Dubai
Strict immigration laws
However, it is important to note that Dubai has strict immigration laws and it is usually difficult for foreigners to live and work in the city permanently. Entrepreneurs who wish to settle in Dubai usually need to apply for a visa and work permit and abide by certain rules and regulations. It is therefore advisable to obtain comprehensive information about the immigration regulations and requirements before emigrating to Dubai.
Climate in Dubai
Dubai’s hot and humid climate is not for everyone. The city is located in the desert and experiences high temperatures and humidity throughout the year. This can be uncomfortable for some people and it is important to be prepared and dress and protect yourself accordingly.
Cultural differences
Even though Dubai is very similar to the western world, there are still cultural differences to consider. It is best to familiarize yourself with the local customs and traditions in order to take the culture into consideration.
Interim conclusion
Overall, Dubai offers entrepreneurs a variety of opportunities and is an attractive place to invest and grow. The city has a geographical location that is advantageous for international trade, a liberal economic system, advanced infrastructure and technology, and a vibrant tourism and leisure offering. Entrepreneurs based in Dubai can benefit from all these advantages and successfully build and grow their business. However, there are also disadvantages, such as the fact that Dubai has relatively strict immigration laws. It is advisable to inform yourself thoroughly about the relevant regulations in advance or to seek advice.
Why You Need a Tax Advisor in Dubai
There are several reasons why it makes sense for you to get a tax advisor for Dubai. First of all, Dubai is a city with a complex tax system that may differ from other countries. A tax firm can help you understand Dubai’s tax system and take advantage of the best tax benefits for your business.
Another reason why you should consult a tax firm in advance is that the city has a comprehensive double taxation agreement (DTA) with numerous countries. A tax advisor will help you understand the DTA and ensure that you don’t fall into any tax traps. For example, Germany does not have a DTA with Dubai – this is particularly relevant if you want to stay in Germany for a longer period of time. Because if your company’s value creation takes place in Germany, you are also liable for tax in Germany.
In addition, a law firm can help to optimize the company’s financial management and ensure that all taxes are paid correctly and on time.
You can also protect your company from potential tax disadvantages through competent advice and ensure that your company operates in accordance with Dubai’s tax laws.
Overall, an international tax firm can be of great benefit to you and help you understand Dubai’s tax system and optimize the financial management of the company. It is therefore advisable to seek tax advice when starting or growing a business in Dubai to ensure that you are able to take advantage of the best possible tax benefits as well as being familiar with the tax laws.
How can DW&P help you?
DW&P is an international tax firm specializing in entrepreneurs who wish to emigrate to countries such as Dubai, Malta or Portugal. Our team of lawyers and tax consultants, together with our local partner company, will help you with all relevant aspects of emigrating to Dubai and setting up a company in Dubai.
Benefits of DW&P:
- Company formation and administration
- Expert, multinational team to help you find the perfect solution for you from over 2,000 business activities
- Business licenses available
- Competitive general trading license available
- Fast and efficient company formation
- No physical presence of the business owner required during the incorporation process.
- No paid-up share capital required
- Real estate office solutions
- Immigration in Dubai: Registration of the VIP visa
We look forward to analyzing your situation with you in a non-binding initial consultation and to examining whether and to what extent Dubai could be of interest to you.
