Germany, an EU country which lies in 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 choose 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 for why German companies are shifting from Germany to Dubai:
- Tax benefits: Germany has a corporate tax rate of 29%, 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 favorable 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.
- 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 robust healthcare system. This makes it an attractive place for German expats to live and work.
Final thoughts on this
German companies are attracted to Dubai due to its business-friendly environment and low-tax regime, including 0% corporate tax, 0% personal income tax, and 100% foreign ownership. Dubai’s strategic location as a global trade hub provides access to markets in the Middle East, Asia, Africa, and Europe, allowing German firms to expand their customer base. 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. These factors, combined with Dubai’s pro-business climate and quality of life, make it an appealing destination for German enterprises seeking international expansion. The UAE’s proactive policies have successfully drawn a significant German business presence to the emirate.
