The United Arab Emirates (UAE) has emerged as a leading global business hub, attracting companies and entrepreneurs from around the world. With its strategic location, developed infrastructure, and business-friendly policies, the UAE offers unmatched opportunities across sectors. When considering where to establish or grow your business in the UAE, three cities stand out for their economic significance, livability, and ease of doing business – Dubai, Abu Dhabi, and Sharjah.
Dubai is the business capital of the Middle East. With world-class infrastructure, global connectivity through its airports and ports, and free economic zones catering to all industries, Dubai accounts for a major share of foreign trade and financial transactions in the UAE.
- Strategic location: At the crossroads of Europe, Asia and Africa, Dubai serves as a gateway to over 2 billion customers. Its proximity to fast-growing emerging markets gives companies easy access.
- State-of-the-art infrastructure: Dubai has invested heavily in infrastructure like ports, airports, roads, real estate to attract foreign investment. It also boasts reliable utilities and telecom networks.
- Low taxes and costs: There is no personal income tax or corporate tax in Dubai (excluding free zones). Operational costs like labor, utilities etc. are very competitive.
- Ease of doing business: Minimal red tape, quick setup times and business friendly services and regulations make compliance easy.
- Global connectivity: Dubai airport serves over 190 destinations. Its ports, including Jebel Ali Port, are the busiest for global trade.
- Financial hub: Dubai International Financial Center (DIFC) offers firms easy access to capital and financial services in the region.
- Expat friendly: About 90% of Dubai’s population is expatriates from over 200 countries. This cosmopolitan environment, paired with excellent quality of life attracts global talent.
With the most diversified economy in the GCC based on sectors like tourism, real estate, financial services, logistics, retail and more, Dubai tickets all the boxes when it comes to the ideal spot for setting up and sustaining global business ventures.
As the UAE’s capital and second largest city, Abu Dhabi also holds immense potential as a launchpad for regional or local outfits looking to capture business opportunities in the Middle East.
- Oil rich economy: Abu Dhabi sits on 6% of global proven oil reserves. So oil, gas and downstream industries are central to its economy. This brings massive investment and infrastructure spending.
- Focus on non-oil economy: There is emphasis on boosting sectors like financial services, aviation, tourism, real estate and renewable energy to drive future growth as the economy is being steered away from its reliance on hydrocarbons.
- Government contracts: The presence of UAE’s federal political institutions Local, state-owned enterprises imply abundance of large, long-term projects and contracts.
- Competitive costs: Elimination of municipality fees on commercial activities and industrial plots aimed at attracting investors makes overall operating costs low.
- Innovation drive: Initiatives like government accelerators, subsidies for tech startups and R&D parks create openings for pioneering technologies and solutions.
Though still dependent on oil, Abu Dhabi offers existing players and new entrants incentives and assistance to help diversify the economy as it continues to keep pace with Dubai as a rewarding landscape for business and growth.
Sharjah provides a balanced environment for enterprises seeking reduced costs paired with proximity to customers and partners based out of Dubai.
- Business costs: Sharjah offers relatively affordable rentals, talent costs etc. compared to Dubai, especially in zones like Hamriyah Free Zone (HFZ).
- Ease of commuting: A 30-40 minute drive from Dubai without border hindrances makes Sharjah easily accessible for meetings and allowing it to tap Dubai’s customer base.
- Manufacturing and logistics: Apart from real estate and retail commerce, Sharjah is a base for industries like heavy equipment, transport and logistics with facilities in HFZ and Sharjah Airport International Free Zone.
Ideal for manufacturers, traders, consultants and startups aiming for a cost-effective base to tap opportunities arising from Dubai and the Northern Emirates region, Sharjah provides the right mix of economical operations environment and connectivity to customers.
- Dubai is the primary business hub due to unparalleled infrastructure and connectivity making it ideal for large enterprises targeting global opportunities.
- Abu Dhabi provides a thriving landscape for hydrocarbon companies and partners benefiting from government project spending.
- Sharjah allows smaller businesses to optimize operations costs while easily accessing partnerships and customers concentrated in Dubai.
Dubai, Abu Dhabi and Sharjah present distinct advantages for organizations evaluating UAE for their expansion needs. Dubai as the trade, finance and transport epicenter provides unmatched infrastructure and global access. Abu Dhabi is geared towards energy majors and partners benefiting from long-term capital investments and diversification initiatives by the government. Sharjah allows businesses to balance costs and proximity to Dubai-based partners and target markets across industries like manufacturing and services. The apt choice comes down to the nature of operations, target markets and stage of growth for each business to leverage the unique strengths of these Emirati cities.
Frequently Asked Questions
Q: Which UAE city has the largest population?
A: Dubai has the largest population amongst all major cities in the UAE, estimated at over 3.3 million in 2019.
Q: How many free trade zones are there in Dubai?
A: Dubai has over 45 free zones dedicated to various industries, including Dubai Airport Freezone, Dubai Silicon Oasis, Dubai Multi Commodities Center and many more.
Q: What kind of businesses thrive in Abu Dhabi?
A: Oil and gas companies, engineering contractors, renewable energy firms, environmental consultancies and real estate developers find Abu Dhabi conducive for their operations.
Q: Why should I choose Sharjah to setup my first Middle East office?
A: Sharjah offers great value in terms of affordable rentals, talent costs and ease of access to suppliers and partners located in neighbouring Dubai.
Q: Which UAE free zone allows 100% foreign ownership?
A: Many UAE free zones like DMCC, DWC, TWOFOUR54 in Abu Dhabi allow 100% foreign ownership while ensuring ease of company registration and straightforward processes.
Q: What are the benefits of registering a company in the Dubai Silicon Oasis Free Zone?
A: Dubai Silicon Oasis Free Zone offers excellent infrastructure and services for technology companies along with streamlined setup procedures and competitive packages.
Q: How can I hire employees for my business registered in the UAE?
A: Businesses registered on the UAE mainland and free zones can hire expat or local Emirati employees depending on the firm’s requirements by processing work permits and visas for recruits.
Q: What kind of industries are supported by the Hamriyah Free Zone?
A: Hamriyah Free Zone (HFZ) in Sharjah focuses on manufacturing, trading & logistics companies by providing warehousing assets and facilities at competitive rates.
Q: How long does it take to register a company in a UAE free zone?
A: Major UAE free zones take as little as 2-5 days for company formation through fast-tracked digital procedures compared to 10-15 days on the UAE mainland.
Q: What business support does the UAE government provide to foreign investors?
A: The Ministry of Economy assists overseas investors through advice, project funding, dispute resolution and initiatives like the Invest in Dubai platform offering guidance across various stages.
Q: Which UAE free zone specialized in financial services?
A: Dubai International Financial Center (DIFC) is an award-winning financial hub with an independent regulator for firms offering banking, capital markets, asset management and insurance services.
Q: What makes the Jebel Ali Free Zone (JAFZA) an attractive investment location?
A: JAFZA in Dubai provides extensive port access, pre-built warehousing, on-site residences and streamlined registration for over 7,500 companies as the Middle East’s largest free zone.
Q: Do I require a local partner for launching a company in Abu Dhabi?
A: Abu Dhabi’s free zones allow 100% foreign ownership while a local partner holding 51% stakes is mandated for setting up on the mainland. The exception is for certain sectors like oil exploration and branches of foreign banks.
Q: How can I sponsor family visas on my UAE residence visa?
A: Expats in the UAE can sponsor residence visas for immediate family including spouse and children below 18 years by providing documents like marriage or birth certificates, passport copies and photographs to the immigration authorities.
Q: What compliance is required for my business in Dubai?
A: Depending on location and industry, Dubai firms need to follow regulations laid out by bodies like Department of Economic Development (DED), Dubai Development Authority (DDA), Dubai Financial Services Authority (DFSA), free zone authorities etc. covering areas like licensing, reporting, audits and renewals.
Q: Can I open a corporate bank account in the UAE without traveling there?
A: Yes, most UAE banks allow account opening paperwork to be completed remotely, while banks like Mashreqneo offer a quick digital corporate account opening process without visiting the branch.