Why Dubai is best place for starting a trading business?
Hundreds of expats move to Dubai to start trading in Dubai every year. It’s normal to wonder why so many people are moving here. What’s the point of attraction? If you have this question in mind, Prospr is here to answer this question in detail.
Every expat has a personal reason to immigrate to this country, but when it comes to moving here to start a trading company, the reasons are pretty simple. We are going to unlock them one by one.
Reasons why Dubai is the best place to start a trading business
Strategic location
Dubai is situated on the southeastern coast of the Arabian Peninsula. This strategic location puts Dubai in the best position to connect with Asia, Europe, and Africa. If you start a trading business in the UAE, reaching the top trading areas of Africa, Asia, or Europe is super convenient. That means international trade becomes highly convenient and reachable for everyone right from Dubai.
Crypto trading
Apart from general trading business, you can consider Dubai if you plan crypto trading. This country offers a clear and progressive framework for digital assets. In your home country, you must pay taxes on cryptocurrencies, while there is zero tax on crypto traders in the UAE. As a result, crypto traders from worldwide are heading to the UAE. They consider this country an excellent jurisdiction for doing business and trading in digital assets.
Understand: How to start an oil and gas trading business in UAE
E-trader license
If you want to continue trading on an online platform, you can get an e-trader license. This license is designed to facilitate traders who want to make the most of digital platforms. If you run a company with this license, it will help you earn the trust of your customers, and it will help you attract more clients for your business.
Learn all about: E-trader license
Open Trade
Free trade policies are something you can enjoy the most in the UAE. You have to do open trade in Dubai; it’s free from all the discrimination between import/export of foreign authorities. No matter what country you are from, you can setup a trading business in Dubai and establish an open trade relationship with other traders.
Thanks to this open trade agreement between parties, traders can buy or sell from separate economies. There is no need to face any kind of subsidies, charges, or government quotas on the trade. As a result, you experience excellent trading flexibility in the UAE.
Tax Benefits
The major reason why more and more trading companies are doing business in the UAE is that this country offers multiple tax advantages. There is no income tax, so people around the world visit this country to save money. Regarding trading business, it’s easy to sign a double taxation agreement. As a result of this agreement, importers and exporters can reduce their tax liabilities. The UAE government highly supports trading business people; they made Dubai a lucrative business hub to prevent double taxation and promote international trade.
Must read: Is Dubai really a tax-free country?
If you open a trading company on the mainland, you need to pay an average tariff rate of around 5 percent. On the flip side, opening a company in Dubai free zone offers additional tax benefits and exemptions from duties. The highest tax rates are on the trade of alcohol, 50 percent, and tobacco, 100 percent.
Major logistic services
Traders like to set up their trading businesses in the UAE because of its state-of-the-art infrastructure, modern facilities, and major logistic services.
Know: How to get general trading license in UAE
Low import duties on the import of significant goods is another plus point. Besides, starting a trading company in Dubai is a safe investment for traders. UAE is a stable and growing economy with clear laws and regulations.
If you are setting up a trading business and have yet to learn what business is feasible, you can get help from our market research experts at Prospr. We offer market research services to expats as we understand they need to learn about what kind of trade is feasible or suitable. You are investing money here because you want to profit from your company.
Working on the right idea will save your investment. We don’t want that for you. Based on our feasibility report, expats can use our market research services to make informed business decisions. We take pride in ourselves being transparent and super honest. Send us inquiries to hello@prosprplus.ae
Favorable government policies
Regarding raising funds and financing your trade companies in UAE, the government facilitates traders with its favorable monetary and fiscal policies. The reason behind flexibility is to promote growth in the trade sector. At first, Financing came from the bank, but now the government has a plan to introduce non-bank or capital market financing options. SMEs can make the most of these new financing options. The ultimate purpose is to promote trade diversification and let the private sector grow at an exponential speed.
Supportive commercial laws
Thanks to its flexible commercial laws, you can profit most from your international trade business in the UAE. If you check the Unified Economic Agreement of 1981 (UEA) under the GCC, you will find out that there is a free trade area between the GCC states. Now, what does it mean? As per article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994), there are no customs duties on the free trade area. If you trade between GCC states, you won’t have to face restrictive regulations by the UAE government.
Another commercial law that helps international traders boost their profits quickly is the Greater Arab Free Trade Area (GAFTA). Dubai and the UAE are members of GAFTA, and as of 1 January 2005, all the members of this area don’t have to face customs tariffs. At this moment, this agreement is subject to trade-in goods only. But members are taking the initiative, and soon, it will unlock the same benefit for trade in services.
Relaxed visa rules and regulations
UAE has become an international hub, home to 200 nations worldwide. In Dubai alone, 85 percent of its population consists of expatriates. The government has made this possible through relaxed visa rules and easy acquisition of trade licenses. Whether you want to get an investor visa or are planning to run an international trade company, you can expect favorable rules and regulations from the government.
No Limitation on Holding Foreign Currency
When running an international trade business in your home country, most of your profit is eaten through commercial or foreign currency taxes. Once you convert the currency, you pay additional conversion charges that reduce your profit. When you operate a trading business in the UAE, you can manage your international transactions without incurring such charges. Although there are minimal conversion charges, they won’t eat up your profit.
Besides, if you want to hold foreign currency for a long time, there won’t be any limitations. The government tries to facilitate traders and give them the currency when they want it. Dubai is quite appealing to traders because it offers a straightforward solution to most international traders’ issues in their home countries.
Let’s kickstart your trading business with Prospr.
As an expat, if you plan to start a trading business in Dubai, the process not only involves getting a trade license but also requires understanding the market and its regulations. Fortunately, our business consultants are here to help. Our expert keeps you up to date with the latest laws and regulations. Whether you want to set up an LLC or a partnership business to trade goods or services in the UAE, Prospr can assist you with the process. Call now!
