The UAE is widely considered to be one of the best places in the world for new businesses to start trading.
The country has enjoyed year on year growth which doesn’t show any sign of slowing down. Official data shows that 32,256 new business licences were issued across the UAE in 2019, bringing the number of active businesses to 572,615 – a booming economy.
There are several factors which contribute to business owners and corporations choosing the UAE and Dubai as their location for new branches, one of which is the uniquely low tax rates.
Speaking to the Khaleej Times
, Khalid Al Kassim, assistant director-general for economic affairs at Dubai Economy said: “Businesses in Dubai have been able to remain competitive and aim for the next level as a series of measures adopted by the government continue to enhance ease of business and create new economic opportunities.”
For pharmaceutical and medical devices corporations looking to extend their business worldwide, let’s take a look at the benefits of setting up the UAE.
Positioning and Infrastructure
First and foremost, the UAE has a unique position; geographically, it serves as the midpoint between Europe and the Far East and is known as the ‘gateway’ between the East and the West.
This strategic location makes it ideal for the imports of pharmaceutical and medical device components, of which China is a significant producer. The materials can be imported cost-effectively and then distributed to the rest of the world from Dubai International Airport, which has the world’s largest cargo hub known as the ‘Cargo Village’ which handles 850,000 tonnes of cargo a year.
The UAE pharmaceutical sector alone is valued at over USD 3 billion, and in 2018 pharma businesses exported over USD 500 million and re-exported USD 1 billion worth of products.
Factors such as a growing population and income have only contributed to the need for more of the same. It is still an incredibly lucrative time for medical devices and pharmaceutical companies to take advantage of the UAE as a base; the UAE’s unique tax laws fuel all all these trading activities. Let me explain in more detail.
The UAE corporation tax is limited to only banks and oil companies, meaning that for all other sectors there are zero corporate taxes, only a VAT which is only applicable to companies that are registered within the country. This means that divisions of businesses that are located elsewhere are essentially receiving a tax-free service.
The UAE has been unrelenting in its quest to make the area a thriving business hub. The country supports businesses to start
, to take advantage of the infrastructure and then do business with the rest of the world - all completely tax-free.
Businesses also pay no income tax, and there is a 0% personal income tax, which is essential in attracting employees from all over the world.
As recruiters who specialise in attracting global talent to the UAE, we are well acquainted with the reasons people flock to the UAE, and the low tax rate is one of the main contributing factors.
Zero Personal Tax and Attracting Talent
The UAE is home to expatriates from across the world, and they make up a significant portion of the population.
The extreme growth that the country has experienced has only been possible with an imported workforce, and the UAE has become a world-leading choice for individuals from different countries.
Around 80% of the UAEs population are expats, and the reasons they give for moving include the weather, the low crime rate, the infrastructure and amenities, but most of all – the low tax rate.
In other countries, some pharmaceutical and medical devices organisations struggle to locate the talent they need for their business to thrive. But the UAE is a magnet for top talent, and home to some of the most successful companies because of this.
Working With an International Service Provider
If you would like to know more about working with an international service provider to take advantage of the UAE’s tax-free structure – get in contact with us today.
Kinetic help businesses from across the world to set up pharmaceutical and medical devices teams within new companies in the area.
For expert advice on how to establish an expert team for your new UAE business, get in touch with one of our team today using our online contact form which you can find here