Impact of Recent Policy Changes on Dubai Business Setup
Dubai has long been a favourite destination for investors and entrepreneurs from around the world. Over the years, the government of Dubai has continuously refined its policies to ensure the emirate remains at the top on the global stage. Recent policy changes are no exception, with the aim of further enhancing the ease of doing business and encouraging more international investment. These transformations are reshaping the landscape of business setup in Dubai, making it even more attractive for entrepreneurs. In this blog, we'll explore the major policy shifts, how they affect business setup in Dubai, and the opportunities they present for new and existing investors.
1. 100% Foreign Ownership for Mainland Companies
One of the most important changes in recent years is the UAE’s decision to allow 100% foreign ownership for mainland companies in some sectors. Previously, it was mandatory for foreign investors to partner with a UAE national who would own 51% of the company. This requirement often posed challenges for international businesses planning to retain full control of their operations.
Under the new rules, foreign entrepreneurs can own their mainland companies fully, without choosing a local partner. This change has enhanced the appeal of business setup in Dubai for global investors, particularly in industries such as technology, manufacturing, and retail, where foreign ownership is now fully permitted. Business setup companies in Dubai are already seeing an influx of foreign investors who are looking to take advantage of this newfound flexibility.
2. Granting Golden Visas for Entrepreneurs and InvestorsDubai has introduced a Golden Visa program, which grants long-term residency to entrepreneurs, investors, and top professionals. This initiative is part of the UAE’s broader plan to attract top talent to the region. Entrepreneurs who establish a new business in Dubai, particularly in sectors like healthcare, science, and engineering, can now qualify for a Golden Visa, which offer residency for up to 10 years. The Golden Visa not only benefits individual investors but paves the way for new business setups in Dubai by offering them long-term stability.
3. Relaxed Visa Regulations and Employment LawsThe UAE government has implemented several changes to its visa and employment laws, which make it easier for companies to hire both local and global talent. One of the most significant changes is the introduction of new work visas and freelance permits, which allow businesses much more flexibility in their hiring practices.
Today, businesses can hire freelance professionals across a range of sectors, including media, design, IT, and marketing. For companies involved in business setup in Dubai, this offers a cost-effective way to scale their operations by tapping into a more flexible workforce.
Moreover, the introduction of the remote work visa enables foreign professionals to live in Dubai while working for companies overseas. This policy is especially beneficial for entrepreneurs and consultants, as they can maintain a business presence in Dubai while working with clients globally.
4. The Expansion of Free ZonesDubai’s free zones have long been a major attraction for international businesses, providing 100% foreign ownership, tax exemptions, and streamlined regulations. Recent expansions to existing free zones have made business setup in Dubai even more attractive. For example, new free zones have been launched, and existing ones have expanded to include more industries like e-commerce, fintech, and digital marketing.
Also, the Dubai Multi Commodities Centre (DMCC) and the Dubai Internet City continue to thrive, with updated policies that streamline the business registration process and reduce bureaucratic hurdles. For startups and SMEs, setting up in a free zone provides not only a tax-efficient environment but also access to a network of like-minded businesses and professionals. This flexibility makes Dubai business setup highly customizable, depending on the nature of the business and the long-term growth plan.
5. Corporate Tax Introduction in 2023A major recent development in the UAE’s regulatory landscape is the introduction of corporate tax starting in 2023. The tax rate is set at a globally competitive 9% on profits exceeding AED 375,000 and it remains significantly lower than other major business hubs.
For SMEs in Dubai, this corporate tax regime will support growth, as businesses generating profits below the threshold will continue to benefit from the tax-free status. Also, companies based in free zones may still enjoy tax exemptions, provided they meet specific criteria.
This tax policy involves an effort to align the UAE with international tax standards while still maintaining its appeal as a business-friendly spot. Business setup companies in Dubai are giving guidance to new investors on how to structure their operations to reduce the tax impact while still enjoying the benefits of the UAE’s low-tax regime.
6. Strengthened Intellectual Property ProtectionTo boost its attractiveness, Dubai has updated its laws on intellectual property (IP) protection. As the UAE seeks to encourage innovation and technological advancement, IP protection has become a key focus area for policymakers.
Recent changes in the law have streamlined the process of registering trademarks and patents, making it easier for startups and innovators to safeguard their creations. This is particularly important for companies in industries such as technology, pharmaceuticals, and manufacturing, where intellectual property is a critical asset. As a result, entrepreneurs setting up a new business in Dubai can be assured that their intellectual property will be protected under UAE law.
7. Environmental RegulationsThe UAE has taken a leading role in sustainability practices, and businesses looking to establish themselves in Dubai must now adhere to stringent environmental regulations. The government has introduced new rules to encourage green business practices, reduce carbon emissions, and support the UAE’s long-term goal of achieving net-zero emissions by 2050.
Companies involved in industries like energy, logistics, and construction will need to comply with sustainability standards and potentially embrace renewable energy solutions into their operations. However, these changes also offer opportunities for businesses in green technology, sustainable architecture, and renewable energy sectors.
8. Streamlined Licensing and Registration ProceduresThe government of Dubai has made huge efforts in simplifying the business licensing and registration process, lowering the amount of paperwork and the time required to set up a company. Recently they have introduced digital platforms, such as the DubaiNow app and the DED Trader License for e-commerce businesses, which enable entrepreneurs to complete the entire registration process online.
This digital transformation in government services has removed red tape traditionally associated with setting up a business. As a result, new business setups in Dubai can be completed quicker and with fewer administrative hurdles, making it easier for entrepreneurs to access the market.
ConclusionDubai's recent policy changes have made it easy and attractive for entrepreneurs and investors to start a business. From the liberalization of foreign ownership rules to the introduction of long-term residency options, these changes are helping Dubai strengthen its position as a global business hub. While new regulations like corporate tax may initially seem daunting, they are structured to maintain Dubai’s competitiveness while aligning with global standards.
For businesses considering Dubai business setup, these policy changes offer amazing opportunities to operate in one of the world's most dynamic markets. Business setup companies in Dubai like Bizvise can help navigate the evolving regulatory landscape, ensuring that investors and entrepreneurs can take full advantage of the benefits offered by these new policies.