Indians, business and the UAE: A recipe for success31 May 2018 Category :
UAE Company Setup
For Indian entrepreneurs looking for a place to do business, the UAE has proven to be particularly fertile ground for many years and looks set to continue in that vein for years to come. India has a close historical relationship with the UAE and Indian nationals come to the region every year to pursue entrepreneurial ambitions and secure a future for themselves and their families.
So what’s the big attraction?
It’s no secret that the global community sees the UAE as a place with very attractive conditions for doing business and something of a golden opportunity for the brave entrepreneur. The number of Indian professionals in the UAE, however, is particularly high. The UN’s 2017 International Migration Report found over eight million Indian expats to be living in the Gulf region (that’s twice as many as were recorded in the year 2000). Over three million were in the UAE alone.
What are they finding here that puts the UAE above the rest of the world as their choice of a place to settle and grow? If you’re an Indian entrepreneur thinking of following in their footsteps, the following points might give you all the conviction you need.
India to the UAE – a smooth passage to success
The UAE is a relatively easy hop from India, a factor that has facilitated the movement of both entrepreneurs and a large labour force. Indian workers have been a critical boon in the building of the UAE’s ever-expanding cities and the wider economy but now the focus and talents of Indian nationals working in the UAE have shifted to more entrepreneurial pursuits and investments. The IT and industrial sectors are particularly popular, with transport, food processing and energy having become significant targets for Indian investors. The UAE is recognised as a global investment hub for overseas interests and India has proved to be a significant part of those interests.
You will find opportunities arising from an increase in bilateral investments between the two countries, which have left business booming, while the Indian government’s increases to import duty on products coming in from China has prompted Indian nationals to invest in warehouse space in Dubai in order to circumvent the duty, creating new basis for trade in the region. Dubai’s ideal geographical location – being situated between Europe, Asia and Africa – makes this emphasis on shipping and logistics in the country particularly profitable.
Further memoranda of understanding have been drawn up between India and the UAE, such as cooperation on maritime transport, SME innovation and enterprise and the further development of shared cyberspace and oil interests. This builds upon an already burgeoning trade relationship worth over USD 53bn, with the UAE being India’s largest trade partner (and India the UAE’s third largest).
This year shows no signs of a slowdown in foreign direct investment (FDI) from India, with meetings between the UAE Ambassador to India and the Indian Minister of Commerce and Industry focused on ‘Linking Developed and Emerging Markets through FDI… for Inclusive Growth & Sustainable development’. With such investment and precedent already established, the proven confidence Indian entrepreneurs have of investing in the UAE is set to increase even further.
With such investment and precedent already established, the proven confidence Indian entrepreneurs have of investing in the UAE is set to increase even further.
The UAE’s unique business benefits – what it means for you
Attracting entrepreneurs like you has long been central to the UAE’s economic strategy, so you will find a number of beneficial business conditions that make it a very attractive place to operate.
Tax: The foundation of the UAE’s success in an entrepreneurial and wider business sense is undeniably its favourable tax laws. It was only recently in January 2018 that a 5% VAT was introduced in the country, aimed at narrowing identified deficits and increasing investment in infrastructure. Even this, though, is in stark contrast to the VAT rate in other countries, such as the 20% standard rate in the UK. The lack of other common forms of tax, such as income tax, capital gains tax and corporation tax, is a clear benefit to both business owners and their employees, helping startups to attract top talent and establish their presence.
The ease with which new businesses can be established is supported by the ever-successful and enticing free zones, which operate as designated tax-free areas that allow for the creation of businesses without the requirement of a UAE national as sponsor, as is required in the mainland.
Compare this tax-free landscape to India’s 25% rate of corporation tax levied on domestic corporate businesses – not to mention additional financial obligations such as the 12% surcharge levied against companies that exceed an annual turnover of INR 1 crore – and the UAE looks very attractive indeed for Indian entrepreneurs.
Family: If you have family you will want to make sure you can bring them with you and look after them in a safe, healthy environment. Securing residency visas is easier in the UAE than in most other countries in the world. Even businesses that are only formal in nature may confer residency visas for the business owner and their family. Key benefits to residency visas include the ability to open a UAE current account and the option to lease apartments long-term, in addition to easy passage in and out of the country.
The UAE is also one of the safest places in the world, with incidents of serious crime being very low compared to the global average, so you can take your children there with confidence. The schooling system in the UAE is diverse and staffed by a large workforce of expat teachers and support staff, with a wide range of government-led initiatives and schemes aimed at training and encouraging the next generation of responsible entrepreneurs – an enticing benefit to the business-owner looking to the future of their family.
Full repatriation of profits: Whereas other countries across the world may impose restrictions on how you repatriate capital and company profits, the UAE has none. This combines with the already warm relations between the UAE and India to allow Indian entrepreneurs and business owners to establish companies in the UAE and to funnel profits back to their family and business interests in India – or anywhere else for that matter. The reliable exchange rate between the dirham and US dollar makes the UAE particularly flexible and desirable as a base of expansion into the global market.
The Gulf region is no stranger to wealth and Indian entrepreneurs have blazed a trail across the landscape. Some of the UAE’s wealthiest self-made billionaires are Indian expats, and their stories inspire every entrepreneur who lands here from India with a business plan and a dream.
Yusuf Ali: Yusuf Ali was born in the Thrissur district of Kerala in 1955 and his story is extraordinary, serving as a shining example of Indian success in the UAE. Ali migrated to Abu Dhabi in 1973 to take a job with his uncle’s manufacturing company, managing the expansion and development of the company’s import and wholesale distribution capabilities. Showing an innate flair for growth, he soon began to pursue the retail market in the UAE, ultimately establishing the Lulu chain of supermarkets in the 1990s.
This promising start blossomed into a titanic story of success, with the Lulu Group alone now operating over one hundred supermarkets and holding a net worth of over USD 5.8bn. Ali’s interests have since expanded into hospitality, contributing to his current personal net worth of USD 2.4bn, ranking him at 737 in the Forbes global billionaire list.
Ali serves as a shining example of the successful Indian entrepreneur who gives back to both the UAE and Indian communities, with significant investments in a range of charitable and humanitarian activities continuing to this day.
Mukesh Jagtiani: Known informally as ‘Micky’, he has demonstrated consistent and wide-ranging success as an Indian entrepreneur within the UAE. Having travelled around the world during his school years, gaining his education in Madras, Beirut, Mumbai and London, Micky achieved his initial success in Bahrain, with the baby products company Babyshop.
The attraction of Dubai proved irresistible for an entrepreneurial businessman like Micky. In 1973 he founded the Landmark Group in Dubai, expanding and growing it into a titan of the retail and hospitality sectors. Today the Landmark Group employs in excess of 55,000 staff and enjoys a net worth as of November 2017 of USD 4.3bn.
But it wasn’t all plain sailing for Micky. Not only is he a fine example of entrepreneurial success but also of the character and resilience necessary to achieve such success. Brief stints as a taxi driver and cleaner during his earlier years in London paint a stark contrast to the current power and reach of the Forbes billionaire.
Not only is he a fine example of entrepreneurial success but also of the character and resilience necessary to achieve such success.
A precedent of growth
While Yusuf Ali and Mukesh Jagtiani are the stand-out success stories, there are plenty of other cases of Indian expats who have made their way very successfully in the UAE. If you have the inclination to work hard and all you’re looking for is an opportunity, you will find that opportunity in the UAE.
The future is a shared one, and the improving diplomatic and trade relations between the UAE and India paint a picture of a vibrant and profitable landscape that is ideal and of mutual benefit to both parties and the entrepreneurs within them.
Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to firstname.lastname@example.org, or click here.