What are the advantages of setting up a business in Dubai as a UK national?

Is Dubai a good place to start a social media influencer business?

Undoubtedly. Dubai is an excellent place to start a business due to its strategic location, business-friendly environment, world-class infrastructure, tax benefits, diverse market opportunities, government support, and strong networking community.

Dubai's position as a global hub, coupled with a supportive ecosystem, makes it an attractive destination for entrepreneurs seeking to establish and grow their influencer businesses.

How can a UK business benefit by setting up in Dubai?

#1 Tax savings

Dubai is a very tax-efficient location for UK businesses, despite the introduction of Corporation Tax and VAT (link to Dubai VAT article when published) in recent years. For one, there is no personal tax, allowing you to keep hold of more of your profits. For UK citizens paying the higher rate of income tax at 40%, this is obviously very appealing!

The rate of Corporation Tax in Dubai is just 9% compared to 25% in the UK, and there are generous exemptions in the form of Small Business Rate Relief (if your turnover is less than AED 3,000,000). This can provide a significant financial advantage, allowing you to reinvest your earnings and grow your business.

#2 Business-friendly 'free zones'

UAE free zones are designated areas, often near ports or airports, where businesses can operate with unique benefits, such as tax exemptions and simplified regulations. This initiative is aimed at encouraging business activity, international trade and investment.

Dubai has several free zones strategically located across the city, including popular ones like Dubai Airport Free Zone (DAFZA), Dubai Media City and Dubai Internet City.

Compared to establishing a mainland company, setting up a free zone company in Dubai provides distinct advantages. Perhaps the most significant benefit is the ability to have 100% foreign ownership, which offers greater control and decision-making authority.

Free zone companies enjoy tax incentives, including exemptions from corporate and personal income taxes for a specified period, providing substantial cost savings.

Free zones also offer access to state-of-the-art infrastructure, advanced facilities, and networking opportunities within a diverse business community.

Additionally, the company setup process in a Dubai free zone is typically faster and more streamlined compared to the mainland, enabling foreign entrepreneurs to start operating more quickly.

#3 Strategic location

Dubai is at the crossroads of Europe, Asia, and Africa providing a golden opportunity for a UK business to broaden its reach and impact. The city's accessibility as a major international travel hub allows you to easily collaborate, network, and engage with followers and potential partners from across the world.

Dubai's growing influencer community is a melting pot of creativity and innovation. Whether you're in sport, fashion, lifestyle, technology, or any niche, Dubai's location can empower you to connect with customers, followers and partners on a global scale and grow your revenue streams.

#4 Entrepreneurial culture and infrastructure

Dubai's pro-business policies and dynamic business ecosystem create a welcoming and nurturing environment for UK entrepreneurs.

Government initiatives such as free zones, start-up support, instant licenses, and specialist licenses (such as the e-commerce license) are designed to attract foreign investment, making it easier and more efficient to establish a company.

Disadvantages of setting up a business in Dubai

#1 Unfamiliar regulations

Navigating unfamiliar regulations in Dubai can be challenging for UK business owners. There are strict tax penalties that could land you with a significant fine or even see your trade license revoked. However, with professional advice, preparation and understanding, you can navigate your way through it.

Here are Capture's key tips for success:

• Research and seek professional advice from a specialist influencer accountant.
  
  
• Understand the legal business structure options available to you and carefully evaluate which structure best aligns with your goals.
  
  
• Get on-the-ground accounting support in Dubai as well as in the UK and engage with the UAE authorities to build positive relationships.
  
  
• Communicate with locals and learn from the community around you. Dubai is a hub of influencers like you, so use their experience to learn.

#2 Cost of living

The cost of living in Dubai is generally considered high, reflecting its status as a luxurious city with a vibrant economy. Accommodation tends to be the largest expense, and dining out can be expensive.

Utilities, transport and services are generally affordable, but healthcare costs, especially for expatriates without comprehensive insurance, can be substantial.

However, it's worth noting that Dubai offers a range of options to suit different budgets, and with careful planning and budgeting, it is possible to manage the cost of living and find affordable rent.

How do you set up a business in Dubai?

You've done your market research and have a strong business plan, so what's next in your journey to starting a business in Dubai? Here are just some of the steps you need to complete before you can begin trading.

Legal structure - choose the appropriate legal structure for your business, e.g. sole proprietorship, partnership, LLC (Limited Liability Company), or a free zone entity.

Trade name reservation - reserve your business name through the relevant authorities to ensure it's available for registration.

Trade license application - apply for the appropriate business license based on your business activities and chosen legal structure.

Location - determine your business location – whether in a free zone, mainland, or another suitable area.

Submit documents - prepare and submit the required documents, including your business plan, legal documents, and business license application forms. If you're setting up an LLC, then you'll be required to submit a Memorandum of Association (MOA) and Articles of Association (AOA) to include details of the company's Ultimate Beneficial Ownership (UBO).

The ultimate beneficial owner is the individual(s) that controls the company assets and benefits from the company's income.

Register with the Federal Tax Authority (FTA) - if your income is likely to exceed AED 375,000, you must register for VAT (Value Added Tax) and comply with tax regulations. Read more about the VAT rules in Dubai.

Open a corporate bank account - to run a business in Dubai, you must open a business bank account to manage all of your transactions. It may be more efficient to have separate bank accounts for AED and £ sterling.

Get help with setting up your business in Dubai with Capture Accounting

Capture Accounting deals with many social media influencers thinking of moving to the United Arab Emirates. Our experience allows you to navigate the challenges of the move from setting up your business in Dubai to Corporate Tax and VAT. For advice on your particular situation, book a short consultation, or start a live chat.

Conclusion

In conclusion, setting up a business in Dubai as a UK national offers numerous advantages. Most significant are the tax advantages - there is no income tax, and there is generous Small Business Rate Relief on corporate tax.

Dubai's strategic location provides access to global markets, and the business-friendly environment of free zones have superb infrastructure to nurture new businesses. For influencers, there is a vibrant business community offering networking and collaboration opportunities.

Overall, establishing a social media influencing business in Dubai as a UK national opens doors to international exposure and the potential for long-term success and growth.