Common Myths Vs Reality In Starting A Company In Dubai

  • Post category:UAE

Due to the business-friendly atmosphere that the local government has established for entrepreneurs, Dubai is home to numerous startups that contribute millions of dollars to the economy of the UAE.

Unfortunately, there are a lot of false beliefs regarding how to start a business in Dubai and the prospects available. This makes it difficult for business owners and investors to decide what is best for their company.

Common Myths Vs Reality In Starting A Company In Dubai


It takes a lot of time to deal with the legalities

With the help of experts such as Relin Consultants, legal proceedings can be resolved without hassle

Any foreign investor would be an outsider to the legal procedures the UAE uses to incorporate businesses. This, however, cannot be a barrier preventing investors from forming their ideal company.

The majority of business owners or investors value time. They therefore prefer moving forward with qualified experts who can help them in the best way possible and practically to launch their business by completing the legal proceedings.

Refer to our guide on Dubai company registration to know more about the business incorporation process.

Offshore businesses are illegal

The number of offshore business establishments is increasing.

The days when the idea of offshore was associated with illegal operations like money laundering and tax evasion are long gone.

Offshoring corporate operations is now regarded as a wise decision because it allows for remote management of operations while providing investors with significant tax benefits.

The cost of business incorporation is high

The business incorporation in Dubai is Budget-Friendly. Anywhere in the world, incorporating a business requires a significant financial commitment supported by a number of factors.

Dubai, the most popular city in the United Arab Emirates, is regarded as an investment hub because the cost of incorporating a business there is lower than in other European countries. According to the type of business activity, the Emirati government has constructed various zones, classed as Mainland, Free Zone, and Offshore destinations.

The majority of start-up businesses choose to incorporate in the Dubai Freezone since it provides access to tax advantages. However, because commercial activities can be conducted in a variety of locations, established enterprises concentrate on Mainland incorporation.

Dubai is not a good place for female entrepreneurs

Female entrepreneurs have strong support in Dubai. Dubai is quickly becoming the Middle East’s most active center for women seeking to launch their own enterprises and secure investments. Dubai is the ideal place to promote a good work-life balance because there are more women-owned enterprises there each year. Women can thrive in leadership roles and accomplish in their businesses due to these support mechanisms.

Holding a local sponsor is necessary

Obtaining a local sponsorship depends on the business activities. Local people (individual or corporate) are required to own 51% of the company’s shares under the concept of “local sponsorship,” while the owner only has 49%. The rule only applies to the 122 legal commercial operations, according to recent evaluations by the UAE government. This implies that business owners from outside the GCC can easily establish their operations without collaborating with a local Emirati.

In Dubai, there are no taxes at all

Although the applicant is exempt from paying income taxes, there are numerous additional taxes that they must pay. Dubai is considered a tax haven. There is no income tax imposed on individuals in any UAE emirate. However, we cannot ignore the corporate taxes levied against foreign banks and oil companies, as well as the upcoming federal corporate tax that will be imposed (up to 15%) on companies with taxable income exceeding AED 375,000 UAE, the excise tax on particular products that have a negative impact on the environment or public health, and the VAT (Value Added Tax) on the majority of goods.

Additionally, there are the AED 4 toll taxes (charged to drivers of all vehicles, including taxis passing through toll gates) and the municipality tax on real estate, which is currently levied at 2.5% and 5%, respectively, on the annual rental value of commercial properties (paid by property owners) and residential properties (paid by tenants), respectively.

Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for further assistance with our company incorporation services in Dubai.