Expats who move to the United Arab Emirates will join 90% of the population that comes from elsewhere. This makes the UAE a mosaic of nations, and an intriguing melting pot to do business. The UAE has a plethora of favourable financial conditions that make it perfect for business people to set up shop there: its most notable benefits include the high average salary and various tax liberties. However, before jetting off, expats should be aware of many differences that influence their business dealings and laws.
UAE Business Banking Accounts
A popular option for British small business owners is to combine the best of the homeland’s and the Arab banking world with a UAE business banking account from HSBC or other international banks. This ensures a more streamlined efficiency in processing times, and also maximises the business cash flow at any given time. UAE banks and some foreign banks have a solid presence in all of the big cities of the UAE, so this provides a face to face alternative to online banking.
Before choosing an account, it will also be important to examine the various business banking options in the UAE: as certain trade services, interest rates and fees apply, these can vary considerably between the different institutions.
One of the biggest attraction for expats looking at setting up their business in the UAE, is the tax law. There is no tax on expat income, nor is there any VAT or GST. A small tax does affect the provision of food and drinks in restaurants that serve alcohol, although this isn’t much. But a green light for no tax in the UAE doesn’t absolve a company of tax in their home country. Just how much depends on how long the business has been trading overseas, and whether or not the company qualifies for non-resident tax status. To ensure that all necessary tax requirements are fulfilled when tax time rolls around, it will be important to get professional help from the qualified tax accountant.
Doing Business with Emiratis
Business culture in the UAE can be highly variable. Each company works according to their own etiquette and traditions. It’s best to prepare for a stark contrast from one company to another: places such as Abu Dhabi are still governed by the tenets of Arab culture and a greater Muslim mandate. What this basically means, is that Emirati’s conduct their business alongside their faith. This places a great importance upon relationship building, family and doing business with people they can trust.
Expats looking to set up a business should make allowances for this period of properly ‘getting to know each other,’ before any real business deals take place. It’s also common practice that family-owned businesses will only grant access to decision makers, once common ground is established with junior members of the team. Punctuality is often not observed, as the distractions of family concerns will take precedence over business needs, and impinge upon time-keeping.
Taking a business overseas to the UAE may seem like a risky step. However, with the right guidance and business nous, your enterprise will have every chance of success.