How to move an African business to the UAE?

For a long time, the main business cities for African businesses were in Europe, like London, Paris, Berlin, and Lisbon. However, the Middle East region has a great potential for the African investors due to its corporate potential and proximity. Entrepreneurs can move an African business to the UAE to make the most of the opportunities there.

Even, after African countries became independent, the impacts of the European colonization remain in tact. In the last 10 years, numerous African businesses are looking toward Dubai, a modern city in the United Arab Emirates. Dubai feels familiar, easy to do business in, and is close by for many African nations.

Today, many investors are opting to relocate their businesses to the UAE, instead of Europe and Americas. Dubai has become home to 45 headquarters for companies that work across the Middle East and Africa. Actually, it is a big number when you compare it to only 26 headquarters which are solely in Africa.

In case, you are thinking about shifting your African business to the UAE. Now is the right time to register a business in the UAE to expand your African corporate operations there. Accordingly, it will enable you to avail better prospects, smart business rules, and greater access to the global markets.

Key takeaways of African business relocation to the UAE

These are the notable insights of the African corporate relocation to the UAE.

• Main growth sectors for African businesses in the UAE include trade, fintech, logistics, renewables, real estate, food, and tourism.
• By 2022, Dubai was home to 26,420 African companies, increasing from 24,820 in October 2021 at a 6.5% growth rate.
• Dubai hosts the Africa-UAE summits and forums to strengthen relations, enhance market insights, and attract African headquarters.
• The UAE ranks as Africa’s second-largest foreign investor, with $110B invested, and another $97B pledged.
• Chief investment verticals for the UAE in Africa are ports, mining, renewables, construction, and agriculture.
• Emirati giants like DP World and AD Ports run key African ports, positioning Dubai as a major logistics hub.

Process to relocate an African business to the UAE

This is the step-by-step procedure of relocating an African company to the UAE.

• Choose business activity
• Reserve company and trade name
• Pick corporate jurisdiction
• Decide entity type
• Get initial approval
• Secure physical premises
• Prepare legal documents
• Acquire business license
• Register bank account
• Go for UAE residency

Now, we briefly look upon these steps of moving a business from South Africa to the UAE.

Choose business activity

Before you transfer an African business to the UAE, you need to determine what kind of work it will do. It helps the concerning regulatory authority to properly categorize your company. Also, it let’s you know what corporate rules apply on your firm in the UAE.

Reserve company and trade name

Select a unique business name following the UAE corporate naming guidelines. Also, single out an accompanying trade name aligning with your brand. Make sure to reserve both with the DED or a free zone authority.

Pick corporate jurisdiction

You can transfer an African firm to the UAE in any of these legal jurisdictions.

• Mainland: Going for a mainland setup enables your African business to operate anywhere in the UAE. Foreigners get full ownership of the company in the Dubai mainland. However, they may need to appoint a nominal shareholder or a local service agent in mainland jurisdictions of other Emirates.
• Free Zone: With 100% foreign ownership, the UAE free zones are special business areas having fewer rules, and no/little tax requirement. However, they can only operate inside the free zone or outside the UAE, unless they appoint partner company in mainland. Beginning from 2025, the Dubai free zones can run the business operations in the UAE mainland as well.
• Offshore: It is for foreign businesses that only want the UAE as the staging post to operate outside the country. With an offshore setup, you can trade around the world, and pay zero taxes. But, you can not have an office or staff inside the UAE.

Decide entity type

Finalize the kind of corporate entity in the UAE that you will setup. You can go for a sole proprietorship (with you as the single owner). Or, you can opt for a joint partnership, or a company with multiple owners (like an LLC).

Get initial approval

Receive the preliminary approval for relocating your South African firm to the UAE. Regulators issue you a no-objection certificate (NOC), stating they are okay with your business proposition. You can get this early go ahead with an NOC in this way.

• For mainland businesses, seek initial approval from the Department of Economic Development (DED) in the chosen Emirate.
• Whereas, for free zone businesses, take preliminary approval from the authority of the chosen free trade zone.
• For special businesses like hospitals or banks, you may need initial permission from other regulators.

Secure physical premises

You need to rent or lease a space for your office, shop, or warehouse in the UAE. It will serve as the official address of your relocating African business in the UAE. However, you may get a virtual office for official correspondence only, if you just run business operate online only.

Prepare legal documents

Arrange all essential legal paperwork for the licensing of your African company in the UAE.

• Business plan
• Copies of the passports of the business owner(s)
• Photocopies of the UAE visa
• Company name reservation certificate
• NOC from DED or the free zone
• Memorandum of Association (MoA)
• Articles of Association (AoA), if necessary
• Rental or lease agreement with tenant

Acquire business license

Submitting application with legal documentation, pay fee, and receive suitable business license from these categories.

• Commercial license: If you are selling or trading products 
• Industrial license: If you are making products in a factory or workshop
• Professional license: If you offer services like teaching, consulting, or designing 

Register bank account

You must open a business banking account in the UAE to handle financial transactions like issuing payments and managing expenses.

Go for UAE residency

If you do not already live in the UAE, then apply for a residency visa. You can get one easily as a business investor or a partner. Once, you have it, you can live in the UAE, and run your business freely.

Advantages of relocating African companies to the UAE

More and more African firms are choosing to relocate their business operations to the UAE. After-all, moving an African business to the UAE to openly trade internationally is a dream of many. These are the big benefits which indicate African company relocation to UAE is a smart move.

• Close to Africa but open to world
• Perfect location for business
• Infrastructure for corporate growth
• Fewer business rules and less taxes
• Community of African companies in UAE

Let us discuss these rewards here.

Close to Africa but open to world

When you relocate an African business to the UAE, you are still close to Africa. This makes it simple to ship goods home and stay in touch with African customers. Also, you get to explore other corporate markets and meet new prospective clients.

Perfect location for business

When you relocate an African business to the UAE, you are picking an excellent business location. Especially, its capital Abu Dhabi, and the largest and most populous city Dubai, are in hot demand in this regard. Internal connection of Dubai means African companies can send products to customers in Asia, Europe, and Americas.

Infrastructure for corporate growth

Foreign businesses can grow faster in Dubai, and across the UAE. This money capital of the MENA region provides strong business laws that can protect your African company. Top-notch corporate infrastructure like offices, warehouses, shops, and business centers deliver better tools to run your business smoothly and safely.

Fewer business rules and less taxes

A significant reason to move an African business to the UAE is that the UAE has simple business rules. The UAE is known across the world due to its open and inclusive business environment. Its various free trade zones provide complete foreign ownership, and full repatriation of the profits.

There is no personal income tax, and foreign investors often pay less in other business taxes too. Companies from a number of African countries can save on taxes, thanks to the double-taxation treaties with the UAE. You are liable to less corporate tax, with 0% rate applicable under AED 375,000, whereas, 9% rate applies over it.

Community of African companies in UAE

Another great thing is that many African firms have already come to UAE for availing better opportunities. You can connect with other African business owners, share corporate ideas, and even team up to do bigger things. So, your prospective African company relocation to UAE means joining a community of successful entrepreneurs from your native continent.

Challenges while moving the African firms to the UAE

Investors and entrepreneurs face these challenges while relocating the African businesses to the UAE.

• Multiple jurisdictions and regulators: The UAE has several different regulatory bodies in the mainland and free zones. Whereas, some industrial, special-purpose, and financial free zones (like DIFC and ADGM) have their own business rules. Also, some sectors are subject to the supervision of some national or industry/business specific regulators.
• Evolving business rules: Regularly evolving legal corporate laws for business ownership regulations, and financial operations make observance challenging in the UAE.
• Local partnership and sponsorship: Some business sectors require foreigners to partner with local sponsors in the mainland jurisdictions in Emirates other than Dubai.
• Accounting and taxation compliance: Several foreign businesses miss the taxation registration deadlines or make incorrect tax filings. Remember, a 5% VAT, 9% corporate tax, and a new 15% global minimum tax is applicable in the UAE. African companies in the UAE must follow the tax reporting timelines to stay compliant with the obligations.

Corporate migration to the UAE from African countries

This is the series of posts on the African business relocation to the UAE for different nations.

• Relocating a South African business to the UAE
• Moving an Egyptian business to the UAE
• Shifting a Moroccan business to the UAE
• Migrating a Nigerian business to the UAE
• Transferring a Kenyan business to the UAE

Conclusion

Relocating to the UAE from Africa is a smart and exciting move for your business. With helpful business regulations, it allows greater trade links, and simpler access to international markets. As a result, Dubai gives African companies a chance to grow faster and reach more customers worldwide.

Just in case, you want to grow your African firm in a safe, and well-connected place. Many African business owners have already done it, and are now working with better tools, strong networks, and more opportunities. Then, transferring your African business to the UAE is the right thing to do.

Even though there are a few challenges, like learning new rules, or finding a sponsor in mainland. Nonetheless, the benefits of the African company relocation to the UAE outweigh the challenges. With clever planning, you can put your entrepreneurial foot in Dubai, to become part of a growing African business community.

Do you want to move your African business to the UAE? Now is a good time for your corporate relocation to the UAE from Africa. Our professional business consultants at KWS Middle East are available to assist you in this transition.

FAQs about the African corporate relocation to the UAE

These are the answers to the common questions about the relocation of African companies to the UAE.

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