Dubai—driven by business

Dubai—driven by business

SPECIAL SUPPLEMENTDubai—driven by businessWhy Dubai isemerging as adynamiclocation for UKcompaniesin association with

A Director supplementDubai—driven by businessIn association with the Government of Dubai, Department of Tourism and Commerce Marketing (DTCM)ContentsLand of opportunity3 ForewordBaerbel Kirchner, director UKand Ireland, DTCM explainswhy Dubai is the centre forbusiness in the Middle East4 HistoryThe City of Merchants haslong been a regional tradinghub in the Middle East, buttoday Dubai also offersopportunities for forwardthinkinginternational firms6 CommentProperty in Dubai may still bethe main draw for investors,but entrepreneurs andcorporates are also attractedby other burgeoning sectors,says the Dubai Chamber ofCommerce and Industry8 EntrepreneurshipDubai’s free zones havehelped build its reputation asa diverse and dynamiclocation. Three UK businessesexplain what it’s like tooperate from within12 RelocatingAll your questions answeredin our guide to moving youroperations and family to Dubai14 Trade and investmentAn insight into the best wayto develop trade links withDubai; the most promisingsectors; and the worthwhiletrade missionsManaging EditorAmy DuffWriterRobert FlemmingSub-editorAlex GriffithsArt DirectorJohn PoilePicture EditorJane MossClient Sales ManagerFiona O’MahonyProduction ManagerLisa RobertsonProduction ControllerJim CampbellPublishing DirectorTom NashGroup EditorJoanna HigginsDeputy EditorRichard CreeChief Operating OfficerAndrew Main WilsonPublished by DirectorPublications Ltd for theInstitute of Directors, 116 PallMall, London, SW1Y 5ED.Opinions expressed do notnecessarily reflect IoD policy.The IoD accepts noresponsibility for viewsexpressed by contributors.Editorialdirector-ed@iod.com020 7766 8950Advertisingdirector-ads@iod.com020 7766 8900Productionproduction@iod.com020 7766 8960Printed by St Ives Roche. Mailedby Priority Newstrade & MailingPaper supplied by McNaughtonPublishing Papers Ltd.ISSN 0012-3242Investors,entrepreneurs andcorporations areincreasingly drawn toDubai by its pioneeringspirit and enterprisingclimate saysBaerbel Kirchner“Dubai is a world-classbusiness and tourism destination. Itboasts a strong and diverse economy,with booming tourism andprogressive, forward-thinkingcommercial centres across all sectorsof the economy, making it theultimate place to visit and invest.Drawing the attention of a globalaudience, the emirate continues tocreate iconic developments andpioneer new experiences, setting itapart from its competitors.Dubai’s liberal but well-regulatedcompetitive environment andentrepreneurial free zones have madea major contribution to thesuccessful growth anddiversification of the emirate’seconomy in recent years. Arange of free zones are alreadyestablished, and more are in thepipeline. Dubai is now home toa well-balanced and diversifiedeconomy, setting it on target to be aglobal market leader awash withopportunities second to none in theregion for UK and Irish businesses. Asa result, ever more internationalcompanies are recognising Dubai as anideal location for developing theirbusiness in the Middle East.Dubai’s links with Britain havealways been strong and this isillustrated by the fact that the UKcontinues to lead as the main sourcemarket for Dubai with a total of687,000 visitors in 2006, constitutingmore than 10 per cent of the globalmarket to the emirate.In addition, figures from UK Trade& Investment show that Dubai isnow the UK’s 10th largest exportmarket globally, up from 17th placein 2004, further highlighting thestrong links between the twodestinations. Meanwhile, Ireland isincreasing its visitors to Dubai everyyear including an 105 per centgrowth to 45,245 in 2006 comparedto the previous year.An oasis of political stability, Dubaiis strategically located midwaybetween the east and the west,providing an excellent base forcommercial operations. The emirate’sunrivalled combination of incentives,services and progressive infrastructure“Dubai’s free zones havemade a major contribution tothe successful growth of theemirate’s economy”offers investors and businesses stateof-the-artfacilities that are consideredamong the best in the world, withthe most modern telecoms andinternet links, ports, roads andairports in the region.Dubai’s success is linked to its abilityto diversify, innovate and inspire. Thisspirit is embodied by thedetermination with which Dubai hasidentified significant areas of growth,retaining and enhancing its reputationas one of the world’s leadingdestinations today and for the future.Baerbel Kirchner director, UK andIreland, Government of Dubai,Department of Tourism andCommerce MarketingDIRECTOR Dubai—driven by business September 2007 DIRECTOR

4History 5The making of modern DubaiRobert Flemming explains why Dubai hasearned a reputation for welcoming UKcompanies and puts the city’s relations withBritain in historical perspectiveAfew months before his death in January2006, HH Sheikh Maktoum bin Rashid AlMaktoum said of Dubai: “What you areseeing is only 10 per cent of what there will be.” Withhis brothers, Sheikhs Hamdan and Mohammed, SheikhMaktoum transformed Dubai into the prosperous,diverse and glittering city that beckons visitors today.So what’s the attraction (last year Dubai InternationalAirport handled 28.79m people)? From a UK or Irishdirector’s perspective, opportunities are the main draw.Fiona Sidwell is CEO of York-based firm ExclusiveEvents. While she also has her eye on Bahrain, she saysof Dubai: “It has to be a growth market for anycompany. The facilities are amazing, the service isphenomenal and everything’s on your doorstep. Fromour point of view, we have the ability to put on highprofile events out there. Dubai is the perfect place forpeople coming from all over the place. As it’s so easy toget people in and out, it makes our delivery easier.”Dubai’s location is key. It lies on the warm waters ofWhy Dubai? A UK director’s perspectiveUnder SheikhMohammed’sleadership,Dubai’s megagrowthhasescalated. Freezones dedicated toeverything fromtechnology tomedia and finance,have beenestablished tocourt foreigncompanies and the emirate has opened upsales of property to foreigners.Dubai has attracted a massive influx ofinvestment in recent years, but what dodirectors of small and medium-sizedenterprises based in the UK and Irelandthink? Are they tempted by its dynamismor intimidated by its reputation foroutdoing all that has gone before?“Setting up there would be quite anenterprising thing to do but it would require alot of market research,” says John Davidson(left), managing director of West Drayton-basedbusiness Gas-elec.A franchise company, Gas-elec hasconsidered expanding into Australia andEurope, and was approached by another Arabstate, which Davidson did not pursue.As with any new market, Davidson wouldneed to ensure there was demand in Dubai.“The main driver would be to ensure that therewould be a return on the investment, to look atthe legislation and whether there is a need foranything similar to our business out there.But the kudos of having taken a muchneeded and valued service over there andbuilding the brand—that would be a nicething to do,” he says.Far from being put off by the superlatives,the Gulf, on the western side of the United ArabEmirates (UAE). In the northwest, Qatar and Bahrainhug the coastline. It’s strategically located midwaybetween the Far East and Europe, on the east-westtrading routes.HH Sheikh Mohammed bin Rashid Al Maktoum,Dubai’s current ruler and vice-president of the UAE, hasnurtured its spirit of enterprise to co-exist with pride ofheritage. Driven by a business mind, his vision hascertainly inspired dynamic growth. The Department ofEconomic Development in Dubai cites a massive 236per cent rise in GDP over the last decade. Economicgrowth is expected to break the AED188bn (£25bn) in2007 and to continue to rise.And according to figures released by the Departmentof Statistics, Dubai’s population increased to over 1.4million in 2006. It’s come a long way from the 1700s,when it consisted of a few fishermen’s huts clusteredround the mouth of a long seawater inlet that cut itsway into the desert. Yet by the 1820s the populationFiona Sidwell(right), chiefexecutive of YorkbasedfirmExclusive Events, isattracted to Dubai’sbusiness culture. Asa businesswomanworking at the coalface, she says: “Inthe UK, business isdriven byshareholders butcompanies become what they are because ofthe people who do the work. There’s a verydifferent philosophy in Dubai. It’s veryopportunist and it’s about not losing face. Ittakes time, but the deal is done on ahandshake, not on a 400-page contract.“Business is done on mutual trust, which hasto be earned, but it’s so much freer,” she says.PA (1)was up to 1,200. And in the summer of 1833 some 900members of the Al Bu Falasah migrated from the vastsands of the Empty Quarter to Dubai. At their head wasSheikh Maktoum bin Buti. So began the rule of the AlMaktoum dynasty that continues today, as well as thefunction of Dubai as a trading port.Sheikh Maktoum believed that commerce would beVision extraordinaire:the can-do attitudeof Dubai is thrivingunder the dynamicleadership of HHSheikh MohammedBin Rashid AlMaktoum. Views ofthe Dubai Creek oldand newthe route to success. His eldest son, Sheikh Hasher,established Dubai as a free trade port without import orexport taxes. Their successors continued the process,expanding the commercial base to attract influentialmerchants from Iran, the Indian subcontinent andmany of the Gulf countries. By the early 1900s, Dubaiwas a thriving community with some 2,000 houses oneither side of the Creek in Deira and Bur Dubai.The main source of revenue came from pearls. In theearly years of the 20th century pearl exports peaked ata value of around £2m per annum and accounted for95 per cent of Dubai’s income.The British interests then centred firmly on thesecurity of the Gulf waters and the exclusivity of theirtrade routes to India. Trade with the Trucial Coast (asthe group of emirates was known), was of littleconsideration until the discovery of oil. Dubai’s SheikhSaeed was the first Trucial ruler to sign an agreement toallow exploration and exploitation of oil and gasreserves. Yet Abu Dhabi was to reap far greater benefitfrom the industry.Sheikh Saeed’s son, Sheikh Rashid, realised the city’shuge potential but his vision was not of oil. In 22 yearsof rule he laid the infrastructure of modern Dubai. Thecreek was dredged and excavated to accommodateshipping and the deepwater harbour of Port Rashid wasconstructed to accommodate the largest of ships.Jebel Ali, the world’s largest manmade port, followed,and it was around this that Sheik Rashid built the firstfree zone. Then came Al Maktoum Bridge, spanningDubai Creek and linking Deira to Bur Dubai. Theairport was duly expanded to take internationaltravellers and became home to the new Emirates airlinein 1985 as the foundations for modern Dubai were laid.“It’s a safe destination and most Europeans feel safegoing there,” says Sidwell. “There’s a nice socialenvironment, a beach, shopping, indoor skiing…” AndEmiratis are the greatest networkers on earth: “You gointo a room and you’re introduced to everyone,whether a prince or a businessman. The Emiratis arevery well educated, too. When it comes to the land ofopportunity, I really do think that Dubai has takenover from Australia,” concludes Sidwell.1830The first majorsettlement in Dubaican be traced backto a small fishingvillage on theShindaghaPeninsula1870Through itsdeveloping activityin trade, Dubaibecomes theprincipal port on theGulf coast1940Dubai becomesknown as the City ofMerchants, for itstrade in pearls andgold1971Dubai joins theemirates of AbuDhabi, Sharjah,Ajman, Umm al-Quwain, Fujairahand Ras al-Khaimahto form the UnitedArab Emirates (UAE)1985The Jebel Ali FreeZone, now home to2,700 companies, isestablished.Emirates Airlinelaunched1999Burj Al Arab (above)is the world’s tallesthotel2006HH SheikhMohammed binRashid al Maktoumbecomes Dubai’sruler2009Burj Dubai is stillunder development,butisexpected tobe the world’stallest skyscraperDirectorDubai—driven by businessSeptember 2007 DIRECTOR

Comment 7Welcoming businessto DubaiInternational companies are increasingly attractedby Dubai’s economic growth rate—it’s the DubaiChamber of Commerce and Industry’s role toprovide assistancesectors, moving them to new frontiers. While thediversity of Dubai’s economy is impressive, the futurewill undoubtedly see greater specialisation ascomparative advantage results in the creation of morespecialised niche markets,” says Safar.Property is still one of the main areas for foreigninvestors, but is not the only opportunity. Tourism is afocal point in Dubai’s future growth path and isexpected to grow regionally and internationally.Biotechnology, healthcare, education and financialservices are also high on the list of prime arenas forbusiness operations. The telecoms and IT sectors alsohave high profiles in Dubai; multi-disciplineconsultancy is in keen demand, and the constructionindustry is ideal for skilled workers. Opportunities inthe service arena are also ripe for the picking. “It’sstrategic geographical location, supported by a worldclassinfrastructure, makes it an obvious destination asa commercial hub,” points out Safar.The main decision for directors to consider whenassessing business opportunities is whether they wishThe Dubai Chamber of Commerce and Industryplays a crucial role in helping improve thebusiness climate of Dubai. Its mission is topromote and represent Dubai’s business community;provide “value added services” to create businessopportunities, and to “actively influence governmentmeasures to improve the business climate”. In practicalterms, that means helping individuals and companiessetting up in Dubai.As Nuha Safar, its director of marketing andcommunication explains: “We serve local interests byproviding certificates of origin for re-exporters and wealso provide intermediation, especially between thepublic and private sector as well as between companiesin the private sector.”The International Arbitration Centre and EthicsResource Centre (which aims to improve businessethics and corporate governance in the emirate) isunder the Dubai Chamber’s remit. And it also providesresources for economic and business research. “TheChamber sponsors events regionally andinternationally to provide a marketplace for domesticand foreign firms to meet and discuss potential jointventures and other initiatives,” says Safar.Dubai’s economy is booming, she continues. “In2006 it grew at an impressive 23 per cent nominal GDPgrowth. High growth rates are distributed across themajority of non-oil sectors, providing attractiveinvestment and business opportunities. Dubai is arelatively new emerging economy with plenty ofopportunity. One of its main strengths is in the“It’s strategic geographicallocation and world-classinfrastructure makes it anobvious destination as acommercial hub”breadth of its capacity. According to the government’sStrategic Plan 2007-2015, Dubai will continue todiversify its economy by creating new sectors ofstrength with competitive advantage whilesimultaneously deepening and expanding existing● Tourist numbers continue to rise with hotels and hotelapartments showing an increase of five per cent in 2006 overthe previous year. Nearly 6.5m guests stayed in over 300hotels with an aggregate occupancy rate of 84.8 per cent.Luxury all-suite hotel Burj Al Arab claimed 100 per centoccupancy rate.● Expect to pay around AED102,000 (£13,600) a year for anaverage-sized, two-bedroom apartment and AED72,000(£9,600) for an ensuite bedroom in a shared villa. Villas withtwo bedrooms or more are likely to come in at aroundAED160,000 (£21,300) a establish their company in Dubai or in one of itsfree zones. Dubai city is attractive due to the lack oftaxes and entitlement to repatriate capital and profits.There are restrictions on ownership as foreigncompanies can only own 49 per cent of a companyand therefore need a local sponsor.“Given those restrictions, many direct investments inDubai city are joint ventures, although with varyingdegrees of influence,” explains Safar. “Joint ventures area relatively new concept in the region; emerging“Companies in Dubai canbenefit from the booming Gulfeconomies”examples are in the banking industry, where the marketis seeing mergers and acquisitions for the first time.“The free zones have a permissive regulatoryenvironment where all restrictions on ownership areremoved and attractive incentives are offered such ascomplete exemption from taxes, customs and commerciallevies, low land rates and subsidised infrastructure.“Companies in Dubai can benefit from the boomingGulf economies; the local knowledge and expertise ofthe region; the strategic geographical location and theliquidity of local companies,” she says.What a wonderful world the projects thatare attracting more people to Dubai...Fabulous buildings and innovativedevelopment projects aresynonymous with Dubai. Burj Dubai(below), the stunning tower that will formthe centrepiece of the 500-acre DowntownDubai site, already exceeds the height ofTaipei 101, previously theworld’s tallest building.The projected 195-floor building, duefor completion in 2009, is likely to be overhalf a mile high.Work is currently being carried out onphase one of Dubailand, offering a wealthof opportunities for British and Irish firmsat development and design stage.Completion is expected by 2010.A tourism, leisure, and entertainmentdestination, it will be divided into six‘worlds’. The attractions and experiencezone, for instance, will house theme andwater parks and a kids city. Downtown willhouse the world’s largest shoppingmall, the Mall of Arabia.Other exciting projects includeDubai World Central (above), a citycentred around the world’s largestairport. Some 750,000 people will liveand work in the city.The Bawadi project will be theworld’s largest hotelcomplex. Andreclamation is afootfor Deira Island,which will form agateway to The PalmDeira.Ninety per cent ofthe 300 islands offthe coast of Dubaithat constitute “TheWorld” have beenreclaimed. “Ireland”was purchased thisyear by an Irishconsortium headedby John O’Dolan.DirectorDubai—driven by businessSeptember 2007 DIRECTOR

8Entrepreneurship 9The bestthings inlife are freeFor foreign businesses andinvestors, the choice is whether ornot to be based in one of Dubai’sfree zones. Director speaks to threeUK businesses about why theychose Dubai, how they set upoperations and which opportunitiesthey’ve seized along the way. ByRobert FlemmingDubai is a land of opportunity and diversityfor the bold entrepreneur and theprogressive executive. The developmentand expansion of free zones (FZs) has provided agateway for foreign nationals to a business hub that canbe exhilarating. Jebel Ali was the first to open in 1985,and was tailored to provide an ideal infrastructure forthe manufacturing and warehousing industry—it’s35km south west of Dubai Creek. Dubai Airport FZ,aimed at small scale, high-value operations started in1996 and was followed in the early part of the 21stcentury by Dubai International Financial Centre (DIFC),Media City, Internet City and Knowledge Village.Sail of the centuryWho BluesailSector LeisureWhere Dubai CreekWhen Bluesail directors Greg Boyle and Laura Muirarrived in Dubai in 2005, they made the decision tobase their yachting company outside Dubai’s free zoneson a refurbished airboat terminal moored on the Creeknear the British Embassy. Lined by dhows, the Creekoffers a picturesque glimpse of Dubai’s trading heritageand can be crossed by an “abra” (water taxi).The process of forming a business outside a free zoneis different; the costs are higher and the tax benefitsMaking waves: inthe two years sinceit’s been based inDubai, yachtingbusiness Bluesailhas grown rapidly.It’s co-directorLaura Muir (left)says: “Theexperience of livingand working herecontinues to beamazing.”lower. But the peripheral costs are the same for any firm,so Boyle and Muir decided to invest in the consultancyservices of a British company registration agent. Aswith most start-ups, the process was onerous, but paiddividends in the end: “Every business is learning as theUAE develops,” says Muir, adding that Bluesail is nowthe UAE’s premier yachting company with a secondaryoperation in Abu Dhabi.So what, in Muir’s opinion, do directors need toknow about setting up an operation in Dubai? She saysto prepare for each government department having itsown policies and processes, and that forms often haveto be completed in Arabic (the official language isArabic, but English is the common language).DirectorDubai—driven by businessSeptember 2007 DIRECTOR

10Entrepreneurship 11Every company needs a full-time or consultancybasedpublic relations officer (PRO), an Arabic-speakinglocal who eases the way and deals with the variousgovernment departments. “We have worked with twodifferent PROs who have been our local saviours,” saysMuir. “They sorted out the paperwork with charm,humour, speed and integrity. Trusted recommendationsare far better than newspaper adverts. And when youfind them, keep them close.”She says all firms should expect to pay ‘refundable’deposits for telephones, visas and business licences. Youmust also have a registered commercial office listed onyour commercial licence and an employee visa—whichcosts around AED14,000—is required at the point ofemployment. “It’s all part of the process of theorientation to life in the Middle East,” she says.Muir and Boyle are enthusiastic about Dubai as abase for their business and, after two years of buildingtheir brand and reputation, are contributing to life inthe emirate in more ways than one. In 2006, Bluesailwon the Lloyds TSB Small Business Award forCorporate Social Responsibility.Last year, in an effort to give the blind and visuallyimpaired the opportunity to focus on their abilitiesrather than their disabilities, Bluesail, as well as thegeneral distributor for Mercedes-Benz in Dubai,Gargash Enterprises, charity Tamkeen and Foresight, aBlue sky thinking:co-director ofBluesail Greg Boylegets out on thewaterLand of the free:Benjamin Moniehas enjoyed taxfreestatusDubai-based organisation working towards a cure forblindness caused by hereditary eye disease, launched ajoint “Sailing for the Visually Impaired” programme.Muir says: “The participants all exhibited a naturalability to sail, and developed powers of skippering,crewing, and team work. We’ve been amazed by themotivation shown; their immense confidence on theboat and in themselves was extremely inspirational.”She adds: “The experience of living and working herecontinues to be amazing. Dubai is run by one of theworld’s most charismatic leaders and we feel privilegedand fascinated to be part of one of the most amazingmodern demonstrations of vision, focus and informedinvestment.”For other small business directors she has this advice:“Research your market and ensure you have a uniqueselling point within Dubai. Expect to need twice thecapital that you estimated and twice as much time.Budget well for marketing and consider unique formsof promoting your brand. Networking is vital,” sheadds. “Get out and meet people who have already setup a similar business. Talk, listen, question and learn.”Sound and visionWho JBMSector MediaWhere Dubai Media CityWhat are the incentives for buying into a free zone?For a start, there are no corporate taxes or personaltaxes and imports/exports are 100 per cent tax exempt.There are no trade barriers or foreign exchange controlsand the local currency, the dirham (AED) is pegged tothe US dollar and fully convertible. Foreign nationalshave 100 per cent ownership and control.Benjamin Monié, managing director of audio andvisual production company JBM, admits he wastempted by the tax-free status. Now based in DubaiMedia City (DMC), Monié and his brother exploited aniche market in audio-visual production. “Thetraditional way is that separate organisations deal withvideo and audio. We do both,” he says. “It’s a conceptteam that takes care of the job from inception torealisation.”As the name implies, DMC’s business base rangesfrom broadcasting and news services to publishing andconsultancy. It was the perfect environment for Moniéto base his business in.“Strategically speaking, we knew that the place wasideal for what we do,” says Monié. “It’s a superb hubfor turnkey media solutions. You can collaborate withall kinds of people and companies; it makes everythingpossible. The legal aspects, paperwork and licenceswere handled through one channel. The procedure ismuch simpler than it would be outside the free zone.You may pay a bit more, but it’s worth it.”Monié’s only slight hitch, he says, was the search foroffice space. “There’s not enough space for all thecompanies that apply so there’s a waiting list. We werefortunate to find the right people who could push ourapplication forward quickly in terms of getting officespace. It can take four to six months to get the rightoffice; it depends on the size you need.”Managing changeWho GMESector MediaWhere Dubai Knowledge VillageA company can be established in Dubai as a LimitedLiability Company (LLC) with two or more individualshareholders; a LLC with a corporate entity as theshareholders; or as a branch office of a company basedoutside the UAE. Simon Morris, joint managing partnerof management consultancy GME (soon to be based inthe learning community of Dubai Knowledge Village[DKV], pictured above right) explains how he set up theDubai operation.“We’re a management consultancy and trainingorganisation operating under a franchise agreementwith UK-based Glendinning Management Consultants,”he says. “Predominantly, we’ll be working with clientsin retail and FMCG to build capability; a majoropportunity in this part of the world.“The process starts with preparing a business planthat has to be submitted to Tecom [a separate companydealing with applications within several free zones],”says Morris.“The next stage is to get the trading licence and forthe company to be incorporated as a LLC. Once theoffice space is confirmed you fill in the forms yourselfand do your own business plan—but DKV has all thestandard forms. There’s no necessity for corporatelawyers or legal assistance as I’m opening an individualcompany. It would be quite different if I were to open abranch office of an overseas company.“Fortunately, the business plan sailed throughsmoothly but they can be rejected. I made therelationship with Glendinnings fairly distant otherwisethe business was really a branch office. And that wouldhave meant a lot more work and information,production of UK accounts and using a lawyer.”Now Morris is waiting for office space to becomeavailable (due to the free zone’s popularity andsuccess). The highest demand is for small compactoffices; larger spaces are easier to come by and thewaiting time proportionately shorter.“The office availability in DKV should be changing asthe universities slowly move out to Academic City (theaim is to develop the region’s talent pool and accelerateits move to the knowledge economy). But to an extent,it’s about who you know and it’s important to keepyourself at the top of their minds,” says Morris.His advice for setting up in Dubai? “Talk to peoplewho have been through the process and havesuccessfully written business plans. Websites make itlook fairly straightforward but they don’t tell youeverything or mention all of the forms.”Morris’s main reason for choosing a free zone wasthe 100 per cent ownership factor and tax advantages.Foreign companies offering professional or financialservices outside the free zones are not required to havea local agent—Morris speculates that this could beextended to other service industries.Learning fast: themanaging partnerof GME, SimonMorris (above), hassought advice fromfirms already basedin the free zonesDirectorDubai—driven by businessSeptember 2007 DIRECTOR

12Relocating 13An oasis ofculturaldiversity,Dubai’sreputation forhigh calibreservice makesit a topdestination forbusinessleaders andtheir families.But how easyis it torelocate? Weoffer some tipson theessentialsThe world at your feetAt the last count, over 250 nationalities wererepresented in Dubai—an indication of thedraw that it has for people and companiesall over the world. Choosing the most suitable freezone may depend on the nature of your business,location, logistics or other factors. Most free zonesindicate the main area of interest in their nameand all have websites that can be checked for subcategories.If the company is financially based,Dubai International Financial Centre (DIFC) islikely to be the logical choice; if you intend todevelop software solutions or telecoms, then itmight be Silicon Oasis (DSO). But it’s highly likelythat there’ll be more than one option. The DubaiChamber of Commerce and Industry site (see panel,page 15) provides links to all the main free zonesunder the tab marked “Investors Information”.One minor detail is the requirement for foreignnationals who plan to stay in Dubai to obtain aresidence visa. As in most countries, a healthscreening is part of the process—individualsArabic. Mosques predominate while foreigners arefree to practice their own religion. Courtesy isparamount and the Emiratis are invariablywelcoming and friendly.Although Dubai is very tolerant andcosmopolitan, it is only courteous (and sensible) toadapt to local laws and customs. Emiratis usuallywear traditional dress—the long, flowing whitekhandura for men, the elegant, black abaya forwomen—and both sexes cover their heads. Butdon’t be surprised to see the crimson flash ofdesigner trousers under an abaya. Plungingnecklines and short skirts may be admired by some,but will offend many locals.Sharia law may only apply to Muslims but thereis zero tolerance in Dubai of drink driving anddrugs. Any driver stopped and found to be underthe influence of alcohol is likely to face a month inprison. Non-Muslim residents can buy alcohol fromMMI (Maritime & Mercantile International) outletsand it is freely available in licensed bars andmost modern conurbations, Dubai has its share oftraffic jams in rush hour. But the Government hasinvested in the Dubai Metro. The first line opens inautumn 2009 and the second in spring 2010. They’repredicted to carry 200m passengers a year. And inMarch, a six-lane floating bridge over Dubai Creekopened, to anticipate an increase in road users.Driving here is not for the fainthearted but untilthe metro is completed cars and buses are the onlyway of getting about. Dubai Transport and NationalTaxis are metered; the charges are reasonable andbased on mileage rather than time. Meters are setto start at around AED4 (50p), apart from theAED20 (£2.70) charged by airport taxis. Cars can behired on production of your passport, British orIrish driving licence and two photographs. Take atleast 20 photographs as they are needed for mostapplication forms.A residence visa is key if you want to buy a car,rent an apartment or villa, open a bank account“It’s strategic geographicallocation and world-classinfrastructure makes it anobvious destination as acommercial hub”the rising cost of living in Dubai is a talking point,but it tends to be less so in the bustling centres ofBur Dubai and Deira. Still, most expatriates veertowards the conurbations of the Greens, Springs,Dubai Marina or Emirates Hills outside the city.Check the advertisements in the English-languageGulf News and Khaleej Times or approach an agencysuch as Better Homes. Leases are normally for oneyear, payable in advance and payment must bemade to Dubai Electricity and Water Authority forthe connection of utilities. For landline, TV andinternet connections contact Dubai Internet City—but mobile phones are the norm and readilyavailable.When it comes to eating out in Dubai, the dineris spoilt for choice. Fast food ranges from ahamburger at Hardees to “shawarma” outlets sellinggrilled shavings of lamb or chicken and salad rolledinside Arabic bread. Gordon Ramsay’s outpost Verre(at the Hilton Dubai Creek), has consistently wonawards. But to see Dubai’s nightscape and have atrue gastronomic experience, Vu’s—at the top of theJumeirah Emirates Towers—is a must.The One&Only Royal Mirage on Al Sufouh Roadcombines luxury with elegance. And its mainrestaurant, Eau Zone, is as much famed for theromantic setting as its cuisine. The promise of evenmore luxurious outposts continues.Day-to-dayDubai● There are no corporatetaxes or personal taxes andmost imports/exports are100 per cent tax exempt.● Accommodation costsabout AED6,000 (around£800) per month for anensuite bedroom in a sharedvilla and AED8,500 (around£1,100) per month for anaverage flat.● Employee visas costaround AED14,000 each(around £1,900).● To set up a Limited LiabilityCompany (LLC) outside a freezone a company requires alocal sponsor who, inprinciple, owns 51 per cent.This can cost anywherebetween AED50,000 and100,000 (£6,600-13,500) ayear. There is commonly aside agreement under whichthe sponsor has no rights tothe profits generated nordoes he/she have anexecutive role.● Taxi meters are set to startat around AED4 (50p), exceptairport taxis, which charge apremium of AED20 (£2.70).Cars can be hired onproduction of your passport,British or Irish driving licenceand two photographs. Take atleast 20 photographs—youmay need them for otherapplication forms.● The sun shines for most ofthe year but temperaturescan reach the mid 40s in Julyand August.undergo a blood test for HIV/AIDs and an X-ray.Each element has a price to which must be addedthe cost of the forms being typed in Arabic. But it’sworth the effort: lack of residency acts as a bar tomany transactions and the inability to open a bankaccount, lease an apartment or buy a car can proveboth expensive and restrictive.Within this complex mix of nationalities,expatriates form the bulk of the population. ButDubai’s culture is rooted in Islamic tradition.English is the lingua franca and most people arereasonably fluent but the official language isrestaurants in hotels and sports clubs for residentsand visitors alike. During Ramadan, betweensunrise and sunset, Muslims do not eat or drinkand many restaurants are closed. As a mark ofrespect it pays not to eat, drink or smoke in publicduring daylight at this time.The sun shines on Dubai for most of the year buttemperatures can reach the mid 40s in July andAugust. The winter months are the most benign—very occasional rainstorms will be familiar to UKand Irish natives.Traffic is a common subject of conversation—likePA (3)and obtain a health card. Healthcare is of a veryhigh standard in both public and private sectors,but private medical insurance is advisable. Thenational health service is subsidised and open tocardholders for a nominal charge. The IranianHospital at the Bur Dubai end of Al Wasl Road isrecommended for statutory health checks, as it’sless busy than Al Maktoum Hospital.Educational standards are also high and there isno shortage of schools and universities ( for more details).Renting accommodation can be expensive andDubai is famous for its championship golfcourses and for hosting the annual Desert Classic.Dubai also hosts the world’s richest horse race,boasts the largest indoor ski slope in the region—with real snow—and a social calendar that wouldgive many other capitals a run for their money.For up to date information on what’s hot, TimeOut Dubai is published weekly and is an excellentsource of information. For more tourist/commercialinformation visit the Department of Tourism andCommerce Marketing website● The free zones offer 100per cent ownership, noexchange controls or tradebarriers, plus 100 per centrepatriation of capital andprofits.● In 2006, Dubai’s economyshowed a 23 per centnominal GDP growth. Highgrowth rates are distributedacross the majority of non-oilsectors, providing attractiveinvestment and businessopportunities.DirectorDubai—driven by businessSeptember 2007 DIRECTOR

14 Trade and Investment 15Useful contactsThe UK has a long-established trading relationshipwith Dubai—so smart directors are seeking out thepromising sectors and making contacts throughtrade missionsOpen armsto investorsNetworking is king in Dubai andthe best way of making anddeveloping business relationships.Joining organisations such as a golf club orattending events like the Rugby Sevens can alsopay dividends, as well as offering businesstourists a break.Shows and eventsThe DTCM’s website and the Dubai Chamber ofCommerce and Industry constantly update theirlists of shows, exhibitions, events andconferences with dates and times. Two of themain exhibition halls are the Dubai WorldTrade Centre and Dubai InternationalConvention and Exhibition Centre near theJumeirah Emirates Towers on Sheikh ZayedRoad. Other locations include the InternationalAirport Exhibition Centre in Deira, Nad AlSheba Racecourse, Dubai Creek Golf and YachtClub and numerous hotels around the emirate.Specific trade shows often have dedicatedwebsites illustrating details and fees; links areusually displayed on Dubai Chamber’s website.The British Business Group (BBG) is based inthe grounds of the British Embassy on Al SeefRoad near Al Maktoum Bridge. Providing asupport system and platform for UK companiestrading and/or operating in Dubai, BBGarranges forums and events to assist itsmembers. More information and links to otherorganisations can be found on its website.Banks such as HSBC and Standard Charteredhave a high profile in Dubai and providevarying levels of business support. Lloyds TSBlaunched its own awards in 2006 to encourageand promote small to medium-sized enterprises(SMEs) and also has forums for the exchange ofinformation and views. Its main branch is on AlWasl Road near Safa Park.Promising sectorsJebel Ali Free Zone (JAFZ) is the mainmanufacturing base. Today, the emphasis is onhighly technical, highly skilled and capitalintensive industries. Major exports includeclothing, mineral products, chemicals andplastics. Britain ranks as the third largestinvestor in JAFZ, with 274 companies there.A group of niche free zones is developing,including the Dubai Silicon Oasis, DubaiPA/REXOutsource Zone, Dubiotech and Dubai Metaland Commodity Centre. Dubai Internet City isthe world’s first free zone for ebusiness.As there are no customs levies, imports,exports and manufacturing are still sectors totap. And although services are impeccablewithin the tourist industry, the serviceindustries as a whole still has opportunities forniche companies.In the automotive industry, servicing tends tofocus on secondary operations withindealerships. Specialised businesses and servicesare likely to find a wealth of opportunities inDubai. For instance, good emergency roadservices firms could make an instant impact.Opportunities for foreigninvestorsFor international companies setting up in Dubaithere are many secure cost advantages that maynot generally be available elsewhere. Theseinclude: competitive import duties, labour costs,energy costs, and real-estate costs. There are nocorporate taxes: income taxes, foreign-exchangecontrols, or trade barriers.Dubai’s free zones provide a wealth of benefits:100 per cent foreign ownership and full controlpermitted; efficient transport and distributionfacilities; flexible investment options; fulladministrative and recruitment support from freezones; no customs duties and renewableguarantee of no taxation. Branch offices do notrequire initial capital but are required to showcopies of the accounts of the mother company.Capital requirements for LLCs will vary dependingon the zone and the type of company established.Commercial structuresFor most organisations planning to set up inDubai the business structure is likely to be awholly owned limited liability company (LLC)whether as an independent or as a branchoffice. Cross nationality partnerships do existbut are not common and usually evolve after aperiod of time. Joint ventures are a relativelynew phenomenon. Most of the joint venturestend to be between large corporations poolingresources or with one feeding from the other.The starting point for many directors will be avisit to Dubai on a trade mission through DubaiTourism and Commerce Marketing, an industryorganisation or UK Trade and Investment. Forothers it may simply start with a holiday.The working dayBusiness hours are variable. The weekend runsfrom Friday through Saturday, but this was onlychanged last year. Many Muslims continue toleave their offices on Thursday afternoon andsome international companies close from Fridayto Sunday. During the working week, privatesector offices are open between 8am to 6pm butgovernment offices open at 7.30am and close at1.30pm as do many of the embassies andconsulates. The time difference between the UKand Dubai is UTC+4.Green issuesSheikh Mohammed’s government is a keenadvocate of environmental protection, acleaner climate and sustainable development.The future is considered promising for cleantechbusinesses, particularly those in the wastemanagement sector.● Government of DubaiDepartment of Tourism andCommerce Marketing For furtherinformation on Dubai and settingup business there:Tel: 020 7839 0580Email:● Burj DubaiIt will be the world's tallest towerand a centrepiece of the Gulfregion’s urban● Jebel Ali Free Zone AuthorityJAFZA is now the base ofoperations for more than 2,700companies from 101● Knowledge VillageA one-stop-shop for education inthe region, it provides theinfrastructure for developing,sharing and applying● Media CityHome to a diverse bunch ofmedia firms including those inadvertising, PR, publishingand● Time Out DubaiA United Arab Emirates travelguide with information on hotels,bars, restaurants, shopping● The British Business GroupFormed to encourage thedevelopment of British businessin the● The British Schools in theMiddle EastOne of the largest organisationsfor British curriculum schools inthe world:● The Dubai Chamber ofCommerce and IndustryFor further information onbusiness support, trade missionsand● UK Trade & InvestmentHelps UK companies succeed ininternational—driven by businessSeptember 2007 DIRECTOR

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