One of the key takeaways from recent Ritossa Family Office Investment Summits in Dubai is the large number of entrepreneurs who have either moved their business and residence here or who plan to in the coming year. Interestingly, 50+ percent of the Summit attendees not currently based in Dubai indicated an interest in exploring relocation to Dubai in the next three years. This statistic is impressive considering the fact that the audience included business leaders, entrepreneurs, and private investors representing $4 trillion in wealth who are equipped to bring jobs and expertise to Dubai.
Despite the challenges the world faced in the past year, during which foreign direct investment declined globally by 42 per cent (from $1.5 trillion in 2019 to $859 billion in 2020), Dubai succeeded in attracting high volumes of FDI. This is a testament to our economy’s resilience and stability.
While it’s great news — and no secret — that Dubai’s economy is booming, start-up companies also cite Dubai’s reputation for safety, availability of quality education, ease of transportation, advanced healthcare systems evidenced by its ability to manage the coronavirus pandemic quickly and effectively, and tax structures as key reasons for their decision to relocate. CIO World Magazine reported in April that, “The UAE ranked first in the Arab world and the 31st in the world in the ranking of the most-friendly countries for emerging companies according to its annual assessment of the competitiveness of countries and their capabilities in an economy based on science and technology. The UAE scored 62 points on the general index, outperforming Greece, Norway, New Zealand and Indonesia.”
According to Fahad Al Gergawi of Dubai FDI, “Success is achieved when everyone is moving forward together with the understanding that ‘We are all responsible.’ Our leadership’s constant and proactive focus on FDI has ensured that Dubai and the UAE’s policies and regulations continue to be in line with international best practices that investors appreciate and expect. In turn, increasing FDI flows have improved prosperity and quality of life for all residents and is one of the cornerstones of the country’s economic development. Our policymakers recognized the need for quick action early on during the COVID-19 pandemic and ensured that the strategies implemented to deal with the situation took care of all aspects – from the well-being of our residents as well as the economy. Stimulus measures were identified and announced to enable sustainable business and economic growth. The Dubai Government alone announced stimulus measures worth Dh7.1 billion.”
Examples of companies relocating to Dubai include an impressive number of companies leading the way with sophisticated technology, artificial intelligence, biotech and medicine, solid waste solutions, safe and sustainable food, fintech, and more.
One high profile example is Icecap, which involves the intersection of diamonds and blockchain. Founder Jacques Voorhees was impressed with Dubai during his early career visits but it was not until he visited in 2020 for a Ritossa Summit that he realised how Dubai had transformed into a true global capital.
“I had no plans to relocate Icecap to the UAE yet I was beginning to notice things. The Abraham Accords were allowing close interaction between Dubai and Tel Aviv, another center of the diamond trade. I learned that De Beers, the largest diamond mining company in the world, had recently relocated its every-five-week “Sights” (where they sell their rough diamonds) to Dubai, from Africa. Over 90 per cent of the diamonds in the world are actually cut in India, which is a simple two hour flight from Dubai. With De Beers here, all the primary diamond companies here, India right next door, and the world-class infrastructure needed to support the global diamond market already built, it was obvious that Dubai really had achieved its goal of becoming the center of the diamond industry. When I returned a few months later for another Ritossa conference, I began to realise UAE was equally trying to become a leader in the blockchain space as well. It even had a Minister of Blockchain. It’s probably the only country in the world that has an entire ministry devoted to this technology,” Voorhees said.
Other businesses relocating to Dubai include: Cash Angel, a visionary investment company that re-located the CEO’s residence and the entire business from Paris to Dubai; The Tsangs Group, a leading family office based in Hong Kong; Platon Finance, a blockchain company; Cahero Holding, a real estate company; and The Bank of Nevis, to name just a few. Bitcoin Association, the global industry organization supporting the BSV blockchain, is even launching a Dubai-based hub for the Middle East and South Asia and views Dubai as an appealing business destination.
“The BSV blockchain is enterprise-class and meant for the large-scale applications, such as smart cities or delivering e-government services to an entire emirate or nation. Government ministries in Dubai and the UAE are serious about implementing blockchain applications at large scale, and we want to partner with them,” said Jimmy Nguyen, Founding President of Bitcoin Association.
“As an investor you look for the value-added of any proposition and with Dubai it’s the audacity of the proposition that energises you. Dubai is that unique global meeting point whose credentials continue to shine bright in this global pandemic. It’s safe and its first mover response to the pandemic has been some of the best in the world. It’s no longer the place just to buy an apartment for occasional use or as a modest protector of wealth but Dubai has evolved and the new narrative sees Dubai as being truly a global center for the incubation of ideas, access to liquidity, and a place that embraces new technology to underpin a holistic lifestyle. Create an environment where human capital can flourish and you build the sustainable life for the future. We travelled 7,000 plus miles to Dubai to establish our first international office because we understand the audacity of the proposition that is Dubai and see it as that unique confluence where all peoples of the world meet and where ideas and opportunity can readily percolate,” said Bank of Nevis Chief Executive Officer Michael J. Prest.
The economy in the UAE remained strong despite the pandemic. Tourism, for example, was among the fastest in the world to recover.
“The UAE is envisioning the future beyond the Covid-19 crisis and we are working toward doubling our economy by 2030. Apart from benefitting from an array of incentives and latest law amendments related to full foreign ownership, bankruptcy, commercial companies and long-term residencies/citizenship, investors, entrepreneurs and creative minds can also capitalize on the country’s state-of-the-art infrastructure, superior connectivity and its highly evolved ecosystem of incubators, accelerators and investors. And yet, these are only few of the factors that make the UAE the bustling global trade and investment hub that it is today,” said Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade.
Business Friendly Tax + Regulatory Structures
Interestingly, many of the entrepreneurs who select Dubai as home base are expats from the United States, United Kingdom, Switzerland, France, and other high-tax cities and countries. In Dubai, earnings are tax-free although it is essential to understand the tax requirements of every individual’s home country. Many also cite Dubai’s regulatory landscape as being desirable as they tend to prefer self-regulation. There are 38 free zones in the UAE that offer tax exemptions on withholdings, export, corporate and personal income as well as corporate tax exemption for 50 years from the date of the company’s formation.
“It was the tax and regulatory landscape that really made the decision to move to Dubai easy. Our lawyers in the United States were very clear that not only were the tax issues problematic, but the regulatory landscape for NFTs and anything involving both blockchain and diamonds, was subject to change at most anytime. That makes it very difficult to build a business. You need a stable foundation. You can’t build a new company on regulatory quicksand. Meanwhile in Dubai, they’d already decided how NFTs were being handled and, with free zones like DMCC, all the tax problems went away, “ added Voorhees.
Gateway for innovation
As a gateway for innovation, Dubai meets the needs of aspiring startups, with impressive multinational design centers, high-tech startup hubs, and strategic partnerships. “We count on our private sector partners who continue to work with us on strengthening our economic model to achieve our goal. To make this journey as effortless as possible for them, we are constantly enhancing the openness of our economy and liberalising various sectors in line with the UAE’s strategic priorities and directions,” said Al Zeyoudie
Strong Leadership and government
Dubai’s current position as a global hub is due largely to strong leaders such whose vision led to Dubai’s rise. Today, international businesses are interested in Dubai due to strong government support of SMEs. Specifically, Dubai’s Smart City 2021 initiative is transforming the city, revolutionising the way government services are delivered, promoting private sector partnerships, increasing happiness, and attracting more interest in the region. Expo Dubai 2021 is another exciting milestone for the UAE that will draw worldwide acclaim as well as boost domestic travel which already expanded during Covid. With 180 nationalities in the UAE, its position as a global melting pot is admirable.
Ease of Residence Visas
To make it easier for businesses to relocate to the Emirates, the UAE announced in 2019 the availability of Golden Visas, long-term residence visas that allow business owners and their employees to live and work here without the historical requirement of having a sponsor. These visas are issued to qualified individuals and their families for 5 or 10 years, renew automatically, and offer 100 per cent ownership of one’s business, which differs from the historical requirement that a company outside the free trade zone have a local partner with at least 51 per cent ownership. The intent is to make the UAE more attractive to business professionals, especially start-ups and entrepreneurs.
Infrastructure and Transportation
Dubai boasts one of the best public transportation systems in the world, including excellent Metro and Bus options, and the Dubai International Airport (DXB) supports 100+ airlines and 260+ destinations worldwide. DXB is the world’s largest and fastest growing passenger and cargo hubs and the #1 airport for international passengers according to Airports Council International.6
Quality Educational Options
Dubai has 200+ private schools for ages 6-18 that provide a high quality of education for more than 300,000 students. Private schools serve 90 per cent of the population and include mixed gender classrooms while the public school classrooms are separate for boys and girls. University-level education is free for citizens and there are a number of training and vocational schools as well.
Healthcare That Leads the World
Dubai has a great health system that offers a high standard of care in top notch facilities under the supervision of The Ministry of Health and Prevention. Of note are the government’s four hospitals - Dubai, Rashid, Latifa and Hatta; however, there are a total of 40+ hospitals throughout Dubai. Dubai citizens have access to free healthcare and employers are required to provide insurance to their employees.
Healthy Lifestyle Options Abound
There is no shortage of ways to maintain a healthy lifestyle in Dubai. Picturesque beaches, fabulous cuisine, bustling streets ideal for walking, and a reputation as a sports mecca all combine to keep Dubai residents and guests fit and in shape. Skiing, polo, soccer, cricket, tennis, cycling golf, basketball, camel riding and football lead the list of popular sports options.
The Happiness Factor
An important goal of the Dubai government is to make Dubai the happiest city on earth, which is being accomplished via programmes and innovative intended to meet the needs of visitors and residents on an ongoing basis.
Dubai continues to launch new strategies and policies that further re-enforce investors’ confidence that tap into its unique value proposition as the City of the Future, the gateway to regional markets, and a global hub for trade and investment. It is the preferred location for the regional headquarters of multinational as well as regional corporations. Startups too find Dubai a dynamic and supportive environment in which to test, finance, and expand business models. They benefit from Dubai’s world-class physical, social, and business infrastructure to reach billions of consumers in the Middle East and North Africa, South Asia, and CIS regions.
In summary, Dubai’s prominence as a global powerhouse is strong and will continue to strengthen in the coming years. Stay tuned for more developments as its influence on the world stage expands.
Sir Anthony Ritossa is chairman of Ritossa Family Office. Views expressed are his own and do not reflect the newspaper’s policy.