How Favourable Are the New Company Formation Rules for Businesses in Dubai?

The United Arab Emirates is a country of constant activity. As a nation that is tirelessly adopting game-changing rules and tirelessly adapting to the needs of the global market, UAE has evolved and diversified for the better. On the same note, the recent economic and business regulations are proving favourable for the nation.

Company formation in Dubai and other parts of the UAE has become a regular occurrence in the country, all thanks to the new laws.  

Let’s take a look at its impacts:


Increasing Popularity of Dubai

Unlike before, the UAE’s Central Banks guidelines require investors to have a residential address to open a corporate account. Earlier, many investors preferred to go ahead with their company formation in the Northern Emirates due to the availability of affordable flexi desks and resources. 

Investors mostly make these decisions based on the cost of operation, location of the activities, the overall requirements and resources needed and most importantly, the amount of capital they are ready to invest. With the new rule in place, Dubai and Abu Dhabi are showing more potential to help businesses grow in the current economic situation. This explains the rise in the number of new business and company formations taking place in Dubai.   


Favoured Business Activities

From the perspective of the financial institutions in the country, some businesses are more promising and risk-free than others. For this reason, banks in the UAE favour certain businesses over others.

The recent economic situations see that banks are holding against vague business ideas and prefer to extend monetary support to businesses that show high feasibility. With that in mind, it is best to consult with a good business consultancy on to evaluate your business idea, capital and how to utilize it right for your company formation in Dubai.  


Company Laws and Tax Rules

The past year has bought many crucial regulatory changes to the UAE’s business economy. At the start of 2018, the Value Added Tax (VAT) was introduced for the first time, which changed the cash flows and the way businesses operate within the country. It also changed the ways companies negotiated with their vendors and end consumers in the long run.  

The UAE’s lenient tax laws were put aside with the introduction of VAT, which brought the nation on par with its international partners. The country is looking forward to following an international standard when it comes to company laws and FDI compliances, opening the gateway for foreign investors.  

The recent rule of giving 100% foreign ownership for 122 economic activities in the country is also soon going to make a major effect on FDI in the country. When we connect it with the tax rules and the Common Reporting Standard (CRS) banks in the country have adopted, it all points out to one thing - The UAE is reaffirming its role as a major business hub in the MENA region.  


And what does it mean for Dubai?

Overseas investors will opt for setting up their business in the Emirate as the business environment has become highly attractive for FDI and company formations. For investors looking for opportunities to expand their business in Dubai, this is the right time to take a call.


Contact us at +9714 311 6547 or email at [email protected] for more information.


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