Dmitrii Basalkin is the CEO and Founder of Bright Al, which facilitates the mastery of languages through generative AI breakthroughs.
Looking to further develop as a global leader in online education, my company analyzed various countries that best fit our plans for business development and AI deployment where we could establish our headquarters. For a number of reasons, we chose the United Arab Emirates (UAE).
First, the UAE’s influence in the global arena is increasing in many industries. In fact, I am finding it to be one of the best places in the world for tech businesses to settle down and grow.
Specifically, I’ve found that the tech ecosystem of the UAE has room for projects at every stage of development. Early stages are welcomed at startup ecosystems like Hub71 (an Abu-Dhabi entity that welcomes startups looking for pre-seed to series A funding) and Faster Capital (an accelerator that has invested $375 million in 97 startups and also helps by providing technical or business development work for equity).
More mature businesses may list on the UAE exchanges to raise more capital and provide liquidity for their shareholders. In 2023, major exchanges from the UAE, DFM and ADX welcomed eight new IPOs and raised $6 billion. Combined with NASDAQ Dubai, they have around $1 trillion in capitalization across 174 listed companies.
All that to say, I see the UAE quickly becoming an alternative to old financial centers like Hong Kong and London. Based on this shift, here are some ways for tech businesses to take advantage of this country’s offerings.
Government
I see the UAE as an example of how strategic efforts can turn a desert landscape into a global metropolis. I see UAE regulations as at the forefront in many fields including AI, self-driving and flying transportation, blockchain and fintech.
Foundationally, the established ecosystem of free zones allows leaders to incorporate and operate new companies easily and tax efficiently. Moreover, UAE has a robust system of electronic services and uncomplicated regulations for most business activities. Based on my personal experience, I find the banking system to be accessible, well-automated and less expensive compared to the European ones.
As an early adopter of AI, it was the first country in the world to get a dedicated Minister of State for Artificial Intelligence. There are now more than 130 active AI initiatives in Dubai along with a wealth of businesses applying AI in a wide range of sectors—from healthcare to media.
Abu Dhabi plays a central role in developing and financing AI initiatives in the UAE and worldwide. For example, Mubadala is an Emirati state-owned holding company with a number of initiatives including the earlier mentioned Hub71 for startups.
The latest initiative of Mubadala, in partnership with G42, is MGX, a new $100 billion fund to invest in AI. The organization Mubadala is working with is G42, the biggest AI company in a region with more than 20,000 employees and a specter of developments from Jais LLM to geospatial AI-powered data analytics.
Taxes
As mentioned earlier, the UAE offers startups an advantageous tax regime. Salary and individual taxes are absent, and there is 0% VAT on sales outside the Gulf Cooperation Council. The recently introduced 9% corporate tax rate is one of the lowest globally, and the first $100,000 of annual profits is exempt from taxation.
The UAE’s tax policy offers additional incentives for holding companies. Subject to meeting specific criteria, some profits can be excluded from taxation. This flexibility may be worth having for businesses looking to diversify and strengthen their investment portfolios within the region.
To get more details about free zones in UAE, I recommend you start with the various online guides like UAE’s Free Zones Gateway or Latham & Watkins’ Free Zone Navigator (created in partnership with VentureSouq).
Funding
I find the government in Dubai incredibly supportive of tech entrepreneurs, and past the billions UAE companies have raised in venture funding and with IPOs, the Dubai Future District Fund has set a $1 billion target for assets under management by the end of 2024.
Dubai also provides resources like incubators and accelerators such as FinTech Hive and the Dubai Technology Entrepreneur Campus. The latter is a co-working space and the largest tech startup coworking campus in the Middle East, offering office facilities to startups, SME and entrepreneurs, so they could easily start their business ventures.
UAE also invests massively abroad. For example, bringing in Mubadala again, the holding company invests in many USA-based fintech startups and “maintains a median check size of $200 million across sectors.” Meanwhile, according to the same source, the Dubai-based venture capital fund, VentureSouq, “has made 141 investments since its inception in 2013 and has a median check size of $4 million.”
There are a lot of opportunities out there. To better understand the ecosystem, I’ve found it helpful to reach out to local experts and advisors at one of many UAE tech events or anytime online via places like LinkedIn.
Community
Related to my other points, and perhaps most importantly, I find the community supportive. Dubai has thousands of startups with at least 306 considered to be “fast-growing.” This accounts for 45% of 749 total scaleups in the MENA region, which I believe clearly shows the leading role of UAE companies in developing new venture capital and technological clusters here.
On top of this, many programs have been started to train coders from both local and international backgrounds. Among these are the National Program for Coders, CodersHQ and One Million Arab Coders, as well as various AI programs at universities.
Another resource to take advantage of is UAE’s 100,000 golden visas for long-term residency, which are reserved for coders and tech experts. Companies can use this to attract and retain exceptional tech talent; this type of visa can support stability, providing long-term residency for up to five or 10 years. I believe it can help with your retention rates and create a more committed workforce.
So, whether you’re looking to fund your project, grow your team, go global or find liquidity, I urge you to explore what UAE has to offer.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
