Dubai's economy performance is forecasted to recover with a positive note at the end of 2021, following the modest decline last year during the pandemic. The growth of Dubai will rely mainly on the rebound of oil prices and the reopening of free trade zones that currently sits on 40 agreements between countries.
Dubai's government decision to allow 100 percent of foreign ownership in businesses has also attracted many foreign direct investments to tap into the various sectors growing in the country, supported by a stable political climate and infrastructure readiness. This article will discuss the essential factors needed for foreign investors and businesses prior to entering the Dubai market.
Dubai requires several licenses for businesses wanting to operate actively in the country. Collectively, there are two options: companies entitled as the free zone entities are not required to have any UAE citizens as the shareholders. In contrast, companies inside the onshore jurisdiction have various regulations, from a requirement of 51 percent local UAE citizen shareholders to 100 percent foreign ownership allowed. Dubai itself has offered more than 20 free trade zone areas, allowing companies to conduct activities within their free zones.
When a business has decided to operate in Dubai, it needs to relocate in the real estate-driven economy. Dubai's free zones provide many business centers with affordable desk options catering to the multilayered conditions of companies. The size of the office space required depends on the visa allowance of the foreign companies.
While Dubai's official language is Arabic, the rising business trends in Dubai have normalized the use of English as a secondary language. However, all employment records and contracts need to comply with the Arabic language.
Business trend in Dubai tends to be more relaxed than in other international business centers. Meetings in Dubai will most likely have flexible times, alongside additional working weeks from Sunday to Thursday. As an Islamic country, Fridays in Dubai are reserved for the religion's congregational prayers.
Alongside other UAE countries, Dubai is pledging to shift the business trend into a more sustainable ecosystem. The focus areas consist of construction and green real estate development. Additionally, the Dubai government encourages businesses to innovate by alternating to more sustainable and green approaches in their operations.
Dubai's e-commerce currently stays in the nascent stage, with less than 5 percent of retail sales compared to other developed countries such as the USA and UK. However, with the high internet penetration and young population, Dubai's e-commerce sector is forecasted to record significant growth shortly, benefiting other relevant industries such as logistics, warehousings, and technology.
During the pandemic, Dubai's government had launched many regulations to establish investment-friendly regulations for its business ecosystem, inviting foreign companies to tap into the dynamic business environment of the UAE. Today, as the country recovers from the global crisis induced by the COVID-19 pandemic, the regulatory frameworks remain unchanged, allowing companies and investors to explore the opportunities as the global economy reopens.