Major Changes in Dubai's $84B Economy to Impact Global Investors in 2023

UAE signed over 66 international double tax avoidance agreements with first-world countries and most members of the EU. The corporate tax, withholding tax, VAT, import/export tax, and capital gains tax are exempt for businesses established in Dubai.

UAE, May 12, 2023 – In 2022, the IMF predicted that UAE's economy would boost. Looking at 2022 statistics, we see that Dubai's economy has grown tremendously. The IMF delegation that visited with UAE officials from November 2 to November 17 was led by Ali Al-Eyd, who stated that "economic growth has been solid this year." Businesses observed throughout 2022 that there were opportunities to tap into new markets and expand their reach, and these opportunities continue to be relevant in 2023. Business consulting companies like Avyanco walk you through business setup in Dubai UAE smoothly.

Favourable policies in business include a tax system in which there are no personal or corporate income taxes. This gives benefits to investors and entrepreneurs as Dubai becomes for them a premier financial centre. In 2022, Dubai's economy has grown by 6%. According to the World Bank's forecast, the UAE economy, the second largest in the GCC, is expected to grow by 3.3% in 2023. The government of UAE has been kind enough to let people do business on their terms without interference. It has freed people from unwanted taxation and complex registration processes of companies. So they can start a business in Dubai and can focus on their growth without worrying about tax-related complexity.

Dubai is successful in the oil-producing business and has overtaken various industries. The real estate industry business sale reported 14,576 transactions with a net amount of AED 33.06 billion during the first half of 2022. In the January-March quarter of 2023, Dubai's property market peaked, with real estate transactions surpassing $24 billion (AED 88.73 billion), indicating a remarkable increase of 60% compared to last year. A total of 29,323 real estate transactions were recorded in the first three months of the year, with an exceptional 11,597 units being registered in March alone.

In addition to the real estate industry, UAE performed well in tourism in 2022.In the first quarter of 2023, 4.67 million international overnight visitors were welcomed in Dubai, this state an increase from 3.97 million tourists during the same period in 2022.

Investors and business owners who match the requirements for the UAE Golden Visa will get a 10-year residence permit. The investors are required to purchase real estate for AED 2 million.

Freelancers and home business owners can now have good opportunities to work in Dubai. A form of residency visa known as the "Green visa" eliminates the requirement that a UAE national or employer sponsor the applicant's visa and permits them to dwell in Dubai for five years.

Many good policy changes have been made in the Dubai Chamber of Commerce. The new Commercial Companies Law, according to Jehad Kazim, Vice President of Legal Services at the Dubai Chamber of Commerce, is a positive step toward improving the UAE's economic competitiveness by harmonizing its regulation with best global practices. He added that the new law would enhance the nation's reputation as a major international business hub.

The need to pay excise tax amounts to the FTA is embodied in the new policy of changes on taxation. It states that anybody who produces an invoice or receives an excise tax amount must do so. The time frame for a taxable person to submit a voluntary disclosure has also been clarified by tax reform. After the relevant tax period has ended, the individual should not wait more than five years.

In addition, FDI restrictions in the UAE have changed from requiring investors to have a local partner to now allowing 100% foreign ownership of businesses there.

The Federal Decree-Law No. 18 2022, released by H.H. Sheikh Mohamed Bin Zayed Al Nahyan, President of the UAE, modifies key essential clauses relating to tax and VAT in Dubai. These regulations and legislation were intended to keep companies in the nation and attract new prospective investors. Businesses and organisations will be required to pay a regular 9% tax rate starting on June 1, 2023, on taxable profits that exceed AED 375,000 ($102,000). 

Profits that fall below the aforementioned amount will be free from corporate tax, resulting in a 0% tax rate, according to the UAE Ministry of Finance. The new corporate tax code is expected to position the country as a top worldwide destination for business and investment, supporting the country's growth and transformation goals while promoting tax transparency and discouraging fraudulent practices.

Dubai has attempted to make the visa procedure for labourers seeking employment in the city more convenient and effective. Upon arrival, these employees have a 60-day opportunity to get a resident visa, an increase from the 30-day deadline. The procedure of getting a work permit, also known as a labour card, is commenced by the employer immediately upon the employee's arrival in Dubai. To receive an Emirates ID, which is required for identification purposes, the employee must have a valid passport and entrance visa and visit an Emirates ID service facility. This simpler and more accessible visa process is intended to facilitate the smooth admission of labourers into the workforce in Dubai, hence encouraging the city's growth.

Dubai is well-known as a global business hub, and there are many reasons why this is the case. It has a diverse economy, with many businesses in many sectors thriving. Additionally, Dubai is a very cosmopolitan city, which makes it easy for businesses to connect with a global network of clients and partners. And last but not least, the Dubai government is very supportive of companies and provides several incentives and benefits that make it an attractive place to do business. It has brought many changes to custom policies that act in favour of business ease.

As the city grows and attracts more entrepreneurs, even more changes will likely come to Dubai in the next few years. These changes could include an increase in the number of coworking spaces, an increase in the number of startups, and a more diverse range of businesses in the city.So if you want to start a business in Dubai, now is the time.

(Above mentioned article is consumer connect initiative. This article is a paid publication and does not have journalistic/editorial involvement of IDPL, and IDPL claims no responsibility whatsoever)