UAE - Market Entry & Business Opportunities

Abu Dhabi is the capital of the UAE, with Arabic being the official language. The country has a diverse population of approximately 9.9 million, consisting of various ethnic groups, with Arabs being the largest. The UAE has experienced significant population growth, reaching nearly 10 million in 2021. It covers an area of approximately 83,600 sq. km and is strategically located between Europe, Asia, and Africa. The currency used is the UAE Dirham (AED)

Economic Overview

United Arab Emirates (UAE) had a strong GDP of USD 421.14 billion in 2021, with a high GDP per capita. The economy is driven by oil and gas exports as well as the development of non-oil sectors like tourism, trade, and finance. The UAE government is actively working to diversify the economy and promote sustainable growth. The country is a member of the GCC, has established regional partnerships, and has signed free trade agreements with various countries, emphasizing its focus on diversification, innovation, and international trade.

Market Overview

The United Arab Emirates (UAE) is a highly diversified and open economy with a strong emphasis on international trade and commerce. With a well-developed infrastructure, a skilled workforce, and a business-friendly environment, the UAE has become an attractive destination for foreign investors. While the economy has historically been reliant on oil and gas revenues, the UAE has made significant efforts to diversify into sectors such as tourism, real estate, logistics, and finance. The cities of Dubai and Abu Dhabi serve as major economic centres, with Dubai being a global hub for trade, tourism, and logistics, and Abu Dhabi playing a significant role in oil and gas production and financial services. As a member of the Gulf Cooperation Council (GCC) and with free trade agreements in place, the UAE serves as a regional trade and logistics hub, attracting businesses from around the world. The UAE government has implemented long-term plans, such as Vision 2021 and We the UAE 2031, to further diversify the economy and enhance the standard of living. Despite challenges, the UAE's non-oil sectors are expected to remain strong, and the country is projected to have a high growth rate in 2023, making it a promising destination for business and investment.

Bilateral Relations between India-UAE

• December 2021 – S. Jaishankar visited Abu Dhabi to attend the 5th Indian Ocean Conference and met with the Royal Family to discuss cooperation and joint action in order to solidify strategic partnership.
• February 2022 – A virtual summit took place between PM Modi and the UAE President as part of the Comprehensive Economic Partnership Agreement (CEPA). During this interaction several agreements were signed and also a Joint Vision document was issued to guide the strategic partnership in the coming years between UAE and India.  
• September 2022 – S. Jaishankar co-chaired the 14th Joint Commission Meeting and the third Strategic Dialogue with the President of UAE. During the visit, there were discussions on foreign policy between the two countries.

Taxation in UAE

UAE does not have income tax, there are other taxes and fees to consider, such as VAT, customs duties, excise tax, and potential corporate taxes depending on the jurisdiction.

• Value Added Tax (VAT) of 5% is imposed on most goods and services sold in the country.
• Some emirates and free zones may impose corporate taxes on companies operating within their jurisdiction.
• Customs duties are levied on imported goods, and excise tax applies to certain harmful products.

Subsidies and Incentives offered by UAE

UAE offers several subsidies and incentives, which make it an appropriate destination for several foreign business owners to conduct activity.

• Customs Duty Exemption: Companies in free zones are exempt from import and export duties.
• Corporate Tax Exemption: No corporate taxes are imposed, making UAE attractive for businesses.
• Investment Incentives: Incentives are offered for sectors like technology, tourism, and renewable energy.
• Access to Financing: Government funds support SMEs and entrepreneurs.
• Infrastructure Support: Extensive investment in transportation, communication, and utilities.
• Business Incubation: Incubators and accelerators provide support to start-ups and SMEs.
• Employment Incentives: Incentives for hiring UAE nationals, including training and recruitment subsidies.

Financing Business in UAE

There are various options for financing business operations in UAE. Some of them include-

• Bank Loans: UAE banks offer various types of loans to businesses, such as working capital loans and term loans, with interest rates and terms based on creditworthiness.
• Venture Capital: Venture capital firms provide funding to start-ups and small businesses in exchange for equity.
• Angel Investments: High net worth individuals, known as angel investors, offer funding to start-ups in exchange for equity.
• Crowdfunding: Crowdfunding platforms allow entrepreneurs to raise funds from a large number of people in exchange for equity or rewards
• Government Grants: The UAE government provides grants and subsidies to businesses in specific sectors, like technology and innovation
• Business Incubators and Accelerators: Organizations provide funding, mentoring, and support services to start-ups and small businesses.
• Foreign Direct Investment (FDI): The UAE offers financial incentives and benefits to foreign investors through its FDI program, particularly in specific sectors
• Export Credit Insurance: The government provides export credit insurance to protect foreign investors exporting goods and services from the UAE
• Islamic Finance: The UAE is a global leader in Islamic finance, providing opportunities for foreign investors to invest in Shariah-compliant products like Sukuk (Islamic bonds).

Top 10 Companies in UAE – 2021

Rank	Company	Industry	Annual Revenue (USD)
1	Etisalat	Telecommunication	$ 41.90 B
2	Emirates National Oil Company	Oil and Gas	$ 20.8 B
3	First Abu Dhabi Bank	Banking & Financial Services	$ 8.10 B
4	Dubai Islamic Bank	Banking & Financial Services	$ 6.80 B
5	Abu Dhabi Commercial Bank	Banking & Financial Services	$ 4.70 B
6	Emaar Properties	Real Estate	$ 4.70 B
7	Emirates NBD	Banking & Financial Services	$ 4.30 B
8	DP World	Logistics	$ 4.20 B
9	Dubai Electricity & Water Authority	Utilities	$ 3.90 B
10	Mashreq Bank	Banking & Financial Services	$ 3.30 B

Most Popular E-Commerce Companies in UAE – 2022

RANK	COMPANY	Headquarter
1	Souq.com	UAE
2	Ounass	UAE
3	Amazon	USA
4	Groupon	USA
5	Basharacare	UAE
6	Lets Tango	UAE
7	Sharafdg	UAE
8	Noon.com	UAE
9	Namshi.Com	UAE
10	Apple	USA

Top 5 Start-Ups in UAE – 2022

RANK	COMPANY	Description	FOUNDED IN
1	EKar	Car Sharing Service	2016
2	Washmen	On Demand Laundry	2015
3	Eureeca	Crowdfunding Platform	2013
4	Carpool Arabia	Carpooling	2014
5	Mr Usta	On Demand Customer Services	2014

Business Clusters in UAE

Business clusters are geographic concentrations of companies, research organizations, and institutions that collaborate and innovate in specific sectors. Supported by government agencies, these clusters aim to promote innovation, competitiveness, and economic growth within their industries. The concept is based on the belief that companies can benefit from proximity to one another, fostering knowledge sharing and resource pooling. By clustering together, organizations can create a critical mass of expertise, specialized suppliers, and skilled workers, leading to increased productivity, innovation, and competitiveness. The benefits of business clusters include access to specialized suppliers and skilled talent, fostering innovation through collaboration, enhanced visibility and reputation, and easier access to funding, resources, and government support. These clusters provide a conducive environment for companies to thrive and contribute to the growth and advancement of their respective sectors.

The UAE is home to several prominent business clusters that cater to various industries and sectors. Here are some key clusters:

• Dubai Silicon Oasis (DSO) - A technology park in Dubai offering an integrated community for tech businesses.
• Dubai Logistics City (DLC) - A logistics hub providing facilities for efficient operations
• Abu Dhabi Global Market (ADGM) - A financial free zone in Abu Dhabi attracting financial institutions and professional services firms.
• Dubai Media City (DMC) - A hub for media and entertainment companies, offering production facilities and support services.
• Dubai International Financial Centre (DIFC) - A financial free zone hosting financial institutions and law firms.
• Dubai Healthcare City (DHCC) - A healthcare free zone focused on specialized medical services and research.
• Dubai Internet City (DIC) - A technology hub supporting companies in software development and hardware manufacturing.
• Dubai Science Park (DSP) - A science and technology park for companies in life sciences and biotechnology.
• Dubai International City (DIC) - A mixed-use development for retail, hospitality, and real estate businesses.
• Sharjah Publishing City (SPC) - A free zone supporting companies in publishing, printing, and media.

How To Set up a Business in UAE?

There is standard process to set up business in the UAE involving few key steps that are applicable across all emirates. The Department of Economic Development in the relevant emirate can be visited in person or online to register the business.

The steps involved to set up a business in the UAE mainland are:

• Apply Online or In Person
• Identify the Nature of your Business Activity for Economic License
• Determine your Company’s Legal Structure
• Register the Trade Name
• Apply for Initial Approval
• Create LSA or MOA
• Choose your Business Location
• Apply for Additional Government Approvals
• Submit Required Documents
• Pay Fee and Collect License
• Register your Company with the Chamber of Commerce and Industry

The steps involved to set up a business in UAE Free Zones are:

• Apply Online or In Person
• Determine the Nature of Business Activity
• Determine your Company’s Legal Structure
• Register the Trade Name
• Select Business Space and Location
• Obtain the Initial Approval
• Registration and Payment of Fee

To know more about our services and how we can help you in UAE – CLICK HERE

Best Locations to set up Business in UAE

UAE offers several attractive locations for setting up a business.

• Abu Dhabi is suitable for oil and gas, finance, and manufacturing industries.
• Dubai is known for its infrastructure and is ideal for finance, tourism, logistics, and technology sectors.
• Sharjah offers a diverse economy and is suitable for manufacturing, logistics, and tourism.
• Ajman is close to Dubai and offers low costs and tax incentives.
• Ras Al Khaimah provides a low-cost environment for sectors like manufacturing, tourism, and logistics.

Visa and Immigration

• A Single-Entry Visa allows one entry to the UAE for a specific period, typically 30 or 90 days. It is suitable for short-term visits for business purposes or market research. To obtain this visa, submit required documents and fees to the UAE embassy, consulate, or authorized travel agency. Requirements may vary based on nationality and purpose of visit.
• A Multiple Entry Visa for the UAE allows for multiple entries and exits within a specified period, ideal for frequent visits for business or personal reasons. The visa's validity can range from 3 months to 1 year, with each stay lasting 30 to 90 days based on visa type and nationality. Requirements for obtaining a multiple entry visa include having a UAE sponsor, demonstrating financial stability, and submitting required documents.
• The UAE offers an Investor Visa that allows individuals to reside and conduct business activities in the country. To qualify, individuals must invest a specific amount of money in a company or property, with the required investment varying depending on the emirate. he investor visa is valid for up to three years and can be renewed if investment requirements are met.
• The Golden Visa is a long-term residency program introduced by the UAE government in 2019. It offers investors, entrepreneurs, and highly skilled professionals the opportunity to obtain a 5 or 10-year residency visa in the UAE. Golden Visa holders enjoy benefits such as access to education and healthcare, the ability to open bank accounts, and the ability to sponsor family members. The visa can be renewed as long as the criteria are met.

Over the past decades, UAE has emerged to be one of the rising global markets that has attracted wide range of investors and entrepreneurs from around the world. With strategic geographic placement and friendly trade policies, UAE offers various business opportunities. It has become a business hub connecting east and west. However, to leverage the benefits offered by the market, one needs to have clear understanding of the rules and regulations, customer trends and business standards.

India Law Offices has a strong presence not only PAN India but overseas also. We have forged strategic alliances with premier international law firms that enable us to serve our clients from any part of the world. In UAE, we work very closely with Paoletti Legal Consultants LLP, a reputable law firm headquartered in Abu Dhabi, UAE that provides comprehensive legal support in covering corporate, commercial, and business law, labour and employment matters, immigration, and other related areas.

If you are from UAE seeking legal assistance in India or an India national or corporate planning to enter the UAE market, our firm can provide the necessary legal guidance and support you require.


To know more about the UAE market, request a Free Detailed UAE Market Entry Report by submitting a query below.