Germany, an EU country which is one of the top 5 economies in the world. The German economy strongly focuses on exports and is renowned for its precision in the engineering, automotive, chemical, and pharmaceutical sectors. It derives advantage from its proficient labor force, robust research and development initiatives, and a pronounced commitment to fostering innovation. But nowadays, lots of German companies choosing Dubai, UAE, as a base for setting up a company or branch for a parent company.
So, what are the reasons for that? You will find out in this post. So let’s get started.
Why are German companies choosing Dubai, UAE, for Company Setup?
Some of the compelling reasons why German companies are shifting from Germany to Dubai:
Tax benefits for a German company in Dubai
Germany has a corporate tax rate of 15%, whereas Dubai offers a very attractive tax environment for businesses, with 0% personal and corporate tax, 100% repatriation of profits and capital, and zero currency restrictions.
Growing German business community
There are already around 1,200 German companies and 25,000+ German citizens in the UAE. This established community makes it easier for new German businesses to set up and thrive in Dubai.
Business-friendly policies
The UAE government has implemented many business-friendly policies and incentives to attract foreign investment, such as 100% foreign ownership in free zones. The regulatory environment is seen as more favourable for doing business compared to Germany.
Strategic location
Dubai’s location provides easy access to markets in the Middle East, Asia, Africa and Europe. It serves as a global trade hub with excellent connectivity via air travel.
The threat of higher taxes in Germany
There are concerns in Germany about the possibility of increasing taxes on high earners and the wealthy, which is pushing some entrepreneurs to move to Dubai.
Quality of life
Dubai offers a high standard of living with world-class amenities, a warm climate, and a robust healthcare system. This makes it an attractive place for German expats to live and work.
Conclusion
The UAE government supports foreign investment with streamlined business registration processes and incentives like free zones with additional tax benefits. Additionally, Dubai’s high standard of living, safety, modern infrastructure, and cosmopolitan environment attract and retain skilled talent, offering a diverse workforce.
OnDemand International supports German entrepreneurs and companies at every stage of their Dubai expansion journey-from company formation and licensing to compliance, taxation, and ongoing business support. Connect with us today to learn how we can assist you in starting and developing your business in Dubai with a lot of confidence and comfort.
FAQ’s
Why are German companies moving their businesses to Dubai?
The primary reason why German businesses are selecting Dubai is the reduced tax levels, less complex regulations, and improved access to the global market. Dubai has a cheaper and more flexible business environment than in Germany.
Is Dubai really tax-free for German businesses?
In most of the free zones in Dubai, personal income tax and corporate tax are 0% (under certain conditions). This is significantly low in comparison to the corporate tax rate of about 15% in Germany, and therefore makes Dubai very appealing to German businessmen.
Can German business owners repatriate 100% of their profits from Dubai?
Yes. Dubai offers 100% repatriation of profits and capital, and no restrictions on currency, which provides complete financial freedom for German companies.
How many German companies already operate in Dubai?
The number of German companies is approximately 1, 200 and the population of German citizens is approximately 25,000 in the UAE. It is a well-established German business community that makes the settlement of new companies easier.
Is Dubai a good location for German companies expanding internationally?
Yes. Dubai is a strategic location that offers easy access to the Middle Eastern, Asian, African, and European markets and thus it is a perfect global expansion hub.
Which industries attract German companies to Dubai?
German firms in engineering, automobile, manufacturing, logistics, information and technology, and renewable energy, particularly, are thriving in Dubai because of high demand and infrastructure.
