Dubai is the UK’s 12th largest export market and the largest in the Middle East with bilateral goods and services trade worth £10.6 billion.
And if you think it’s all about oil in Dubai, think again – the United Arab Emirates (UAE) has diversified its economy to the point where non-oil sectors now contribute more than two-thirds (70%) towards the nation’s gross domestic product (GDP).
More than 4,000 British companies, including BP, Shell, Rolls Royce, BAE Systems, Standard Chartered, HSBC and RBS, operate from the UAE, while 779 commercial agencies and 4,762 British brands have invested there.
If you’re thinking of joining them and doing business in, or exporting to Dubai or anywhere in the UAE, here’s all you need to know…
The pros and cons of exporting to Dubai
If you’re thinking of exporting to Dubai, it’s worth knowing the strengths of the market are:
- diverse economy continually growing and expanding
- proximity to other Gulf markets – acts as an entry route to other Gulf Cooperation Council (GCC) countries
- key market for re-export into other countries
- no taxation on personal income and capital gains
- English is widely spoken and accepted as the language of business
And the strengths of the market include:
- its strategic geographical location – Dubai is regarded as a regional hub for the Middle East, north Africa and beyond
- UAE is the UK’s largest export market in the region
- large expatriate population
- one of the most liberal trade regimes in the Gulf attracting capital from across the region
Doing business in Dubai is not without its challenges though:
- restrictions on company ownership by non-GCC nationals (a national sponsor must retain 51% ownership)
- Arabic will often be the first language and documentation will be in Arabic – although English is recognised as the language of business
- The interaction of federal laws, individual emirate laws and free zone laws can be complex and confusing.
In 2014, UK exported goods totalling £6.4 billion to the UAE, and the top five exports to were:
- power generating machinery and equipment
- road vehicles
- telecoms and sound recording and reproducing equipment
- professional and scientific instruments and apparatus
- general industrial material
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How does tax work in Dubai?
There is no taxation on capital gains, and no direct personal taxation in the UAE. There is also no VAT or sales tax.
Most Emirates levy various municipal taxes, indirect taxation through official fees is commonplace and income tax is only applied in practice to foreign banks, oil and gas companies.
How will I be affected by customs in Dubai?
Customs duties on goods imported to the UAE is usually charged at a rate of 5%, but higher rates of duty are applied to alcohol and tobacco.
Certain goods are exempt, such as certain agricultural products, printed material and pharmaceuticals, and exemptions may also be given for goods imported for industrial or manufacturing purposes.
Where goods are imported into a UAE free zone, customs duties are not payable. If you’re looking at exporting to Dubai or any of the Emirates, it’s worth noting that goods can only be imported into the UAE by a company registered in the UAE, and the goods must be relevant to the licensed business activity of this business.
There are no duties or tariffs on exports.
Goods manufactured in Israel cannot be imported into the UAE, and all printed matter, films and tapes must be cleared by the Ministry of Information.