By Azam Mahmood Butt
Dubai – If you were thinking that Dubai was a tourist haven where wealthy businessmen go merely to savour some sweet luxuries not found elsewhere, let me correct you a bit here. All those high net worth individuals aren’t just travelling to the Middle Eastern emirate just to have a holiday. Dubai’s strategic trading location, its duty free ports, high-end infrastructure, tax-free environment and economical office spaces make the perfect recipe for an excellent business venture or a trading bureau. What’s more, man power here is also affordable and a new study has revealed that employee accommodation costs in Dubai are actually half of that in London.
Global real estate services provider Savills PLC says that the cost of living and working in Dubai is almost half of that in New York, London and Hong Kong. Emirate’s tax-free environment, low real estate costs and duty-free sea ports allows businesses to make nearly 100% profits with almost no cuts going to the government. This leads them to offer good salary packages to their employees and hence we see people travelling to Dubai in great numbers in pursuit of good jobs and better lifestyles.
The report also referred to similar benefits. It claimed that owing to the unique tax-free environment and economic prosperity, the emirate had become more affordable than it was in 2008. Savills estimated the cost of hosting an employee in Dubai– including their residence and office rents – approximately AED 214,135 per annum ($58,300). Contrastingly, the cost of hosting an employee in London was found to be around AED 414,315 ($112,800) and that’s nearly double than that of Dubai’s. Interestingly, the costs were actually higher in 2008 – around AED 220,380 ($60,000) per annum – but have become more affordable in 2016.
The study considered cities for the index that were a combination of established global metropolises and their dynamic rivals. The report listed Rio de Janeiro as the most affordable city to host an employee at an annual cost of AED 60, 605. Although the costs of living do seem attractive enough there and one can definitely consider setting up a business, but one would be missing all the high-end contemporary perks Dubai has on offer, not to mention the business-boosting tax-free environment.
The report also revealed that across the world, real estate recovery hadn’t been universal and was rather concentrated in the cities which were favoured by investors and occupants looking for growing digital and creative economies. This brought some relatively small cities such as Dublin (1.7 million) and Berlin (population 4.3 million) to the spotlight, offering them a world-class city status and thrusting them into a competition the giants in a new digital age. Interestingly, Dubai is also such a city and as it develops, the day is not far when the emirate would become world’s best city in every aspect.
A prominent property company Allsopp & Allsopp recently reported that real estate demand was increasing in Dubai while the number of vacant properties were decreasing significantly. The company noticed that population was increasing at a rate of 7% in Dubai which meant that the emirate needs more than 25,000 units per year to accommodate the estimated expat influx.
UAE property portal Bayut had similar results to share, saying rising rental yields and stabilising prices were attracting investors to the city in great numbers.
Since most of the incoming expat influx actually comprises job seekers, talent hunting wouldn’t be difficult if you are setting up a business here. With affordable residential costs, no profit cuts going to the government in taxes and a perfect trading location, we believe Dubai to be the perfect business jumpstarting location in the world.