Tax benefits, opportunities: Why Indian companies love Dubai

Mumbai: Dubai was ranked the world’s top destination for foreign direct investments last year, with India being the top source country, accounting for the highest percentage of capital share at 21.5 per cent.

To date, more than 73,000 Indian companies have registered with the Dubai Chamber of Commerce. At the Dubai-India Business Forum in Mumbai, a top official revealed what’s attracting Indian companies.

Dubai-India Business Forum was held on Tuesday in Mumbai as part of the officials visit of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence.

“Last year, in the first three quarters, we had 3.1 per cent in GDP growth in Dubai. We offer 100 per cent [foreign] ownership [in most sectors],” Salem Al Shamsi, Vice President — International Relations Sector, Dubai Chambers, said during his presentation at the forum attended by more than 200 top officials and investors, including a delegation featuring 39 business leaders from Dubai.

Tax benefits

“Dubai ranked number three in international trade and 22nd in international investment based on the IMD [World Competitiveness Ranking 2024]. We have 27 specialised free zones, also establishment on the mainland where you can do your businesses.”

Al Shamsi highlighted the tax benefits enjoyed by both individuals, including about 3.8 million Indian expats, and businesses in Dubai.

“When it comes to taxation, which is really important, we have 0 per cent on personal income tax, 5 per cent on VAT and 9 per cent when it comes to corporate tax,” Al Shamsi said, noting the significance of the Comprehensive Economic Partnership Agreement, which reduces tariffs and promotes smoother trade.

Global connectivity hub

Dubai, with a four-hour flight radius reaching half the world’s population and more than 200 flights daily from airlines like Emirates and Flydubai, is a strategic location for global connectivity.

“We have 250 plus flights daily from Dubai International Airport and we have DP World, which operates and runs 74 ports worldwide, which can help in terms of moving goods around the globe,” he said, noting the city with robust infrastructure is among the most connected by sea and air routes.

India is a member of World Logistics Passport (WLP), a global freight loyalty programme launched under the directives of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

“This passport can help in fast tracking cargo movements, reducing administrative costs and advancing cargo [information], facilitating movement between ports and air.”

Mumbai’s international airport and the Nhava Sheva International Container Terminal are part of the WILP programme.

FDI into Dubai

In 2024, India was ranked number one in terms of FDI value into Dubai.

“While Dubai has more than 1,100 [FDI] projects, India had 276 in 2024, worth of $2.3 billion.”

Indian investments have been made into were software and IT services, business services and consumer products.

“In terms of trade analysis, there are eight potential products that Indian companies may increase their exports to Dubai, including medicine, car parts, vehicle and frozen beef.”

Further opportunities

Logistics sector: Mobility technologies (drones, autonomous transport, robotics, air traffic management system in new DWC Airport); digital technologies (Internet of Things, blockchain, supply chain solutions, tracking and security); sustainability solutions (electric vehicles, EV charging stations, and Dubai Green Mobility Strategy to have 42,000 EVs by 2030).

Financial sector: Banking (corporate and investment banking, banking infrastructure, green financing, financial research), FinTech and digital payments, insurance, cryptocurrency, digital remittances, and investment management.

Digital economy sector: Sovereign cloud and Al infrastructure, virtual and augmented reality, gaming industry, robotics and automation, 3D printing, digital marketing and e-commerce.