How Dubai cemented its position as a global business hub post-pandemic?
Dubai has once again proved to the world that it’s a global business hub: a status that remains unshaken even amidst the COVID-19 pandemic. Dubai’s proactive policies and reforms are the reason behind the resilience it showed during the pandemic. A host of path-breaking reforms including citizenship for foreign investors, economic stimulus packages up to AED 7.1 billion, three-year visas for just AED 1 million property, vaccine rollout, introduced the National Industrial Strategy, continued Expo 2020, 100% ownership on the mainland business for foreign nationals etc.
And last, but not least, while most of the economies have been dragging the lockdowns for months, for Dubai business is as usual and had resumed business after just three weeks of lockdown, which shows that the future is bright for investors who want to set up a business in Dubai Mainland.
Here, we examine how Dubai beat the advanced nations to become a global business hub at a time when other powerful countries failed to deliver. Read on.
• A Big Breakthrough in Foreign Ownership on the Mainland
Dubai is considered the gateway to the lucrative Middle East market. Foreign investors consider mainland company formation in Dubai as the best solution to explore the profitable opportunities in the wider UAE market as well the Middle East region. However, setting up a business in the UAE mainland used to come with a catch: the foreigners could lay claim to only 49% of the company’s shares. A UAE national who acts as the Local Sponsor holds the rest of the shares.
This mandatory requirement has been a turn off when it comes to LLC company formation in Dubai. However, the visionary Rulers of the UAE has finally given a green signal for 100% foreign ownership by revoking the need to appoint a UAE national sponsor. As of now, the new company ownership law will come into effect from June 1. Business setup consultants in Dubai expect a renewed surge in foreign investments on the back of the historic reform.
• The Emergence of Sunrise Sectors
Nowadays, a more sensible approach would be choosing pandemic-proof ideas for company formation in Dubai. Sectors such as e-commerce, digital marketing, health tech, education tech, Fintech, food delivery, e-sports/gaming etc. have successfully withered the challenges posed by lockdowns, social distancing etc. Startups and small businesses that engage in such sunrise sector activities can ensure long-term growth in Dubai’s investor-friendly climate.
The government also encourages investors to set up a business in Dubai in pandemic-resilient sectors. The launch of dedicated e-Commerce free zones such as Dubai CommerCity and EZ Dubai indicates the government’s interest in fostering investments in pandemic-proof industries. Recently, the Dubai Airport Free Zone (DAFZA) launched an initiative called Scality to create a favourable ecosystem for tech startups engaged in growth sectors such as Fintech, Education-tech, Agritech, healthcare tech etc.
• Citizenship for Expats is a Game-changer
Most expats considered the UAE as a second home but the time of that commitment and loyalty was decided by the duration of their resident or investor visas. Things changed dramatically after the pandemic when the UAE government surprised everyone by offering much-coveted citizenship for expats. Individuals who satisfy certain conditions such as the amount of wealth or exemplary achievements in certain professions can now earn UAE citizenship.
Under the new Citizenship law, investors, doctors & specialists, inventors, scientists, famous talents, intellectuals, artists and their families will be granted UAE citizenship. The first batch of wealthy expats who earned Citizenship includes heads of two airlines operating in the UAE, an international soccer player and founders of two successful UAE startups.
• New National Industrial Strategy
The UAE accomplished a new milestone in 2021 by announcing the new industrial strategy called Operation 300 billion. The strategy aims to increase the contribution of the manufacturing sector to the country’s economy from AED 133 billion to AED 300 billion over the next ten years. The national strategy will see the formation of 13,500 industrial companies in the coming years along with a surge in R & D spending on the industrial sector from AED 21 billion to AED 57 billion.
• More Investments through EXPO 2020
Only Dubai could pull off a massive international event such as EXPO 2020 at a time when a deadly pandemic is wreaking havoc in many countries. Scheduled to start from 1 October 2021, the EXPO 2020 will coincide with the 50th anniversary of the founding of the UAE. The event was originally scheduled to take place in 2020 but was inevitably postponed to this year due to a pandemic scare.
Any other country would have backed off from organising the event at a later date as the pandemic is still raging. The green flag given to the event shows Dubai’s confidence and a testament to its safety precautions. The global event will instil new confidence and energy across all business sectors, especially the tourism, hospitality and events industries.
The Bottom Line
Browsing through the reforms implemented recently, we can conclude setting up a business in Dubai makes sense for foreign investors. The vaccines provide a safety net, the citizenship promises long-term commitment and 100% ownership reveals more opportunities are in store. If all the recent reforms sound inspiring, consult with the best business setup consultants in Dubai such as Jitendra Business Consultants (JBC) to enjoy the benefits of the new changes. JBC eases the intricacies in company formation with bespoke services such as bank account opening, visa processing, obtaining trade license etc. By availing of JBC’s business setup services in Dubai, entrepreneurs can achieve their business goals with zero struggle.