A combination of political and economic stability, diverse opportunities, and a business-friendly tax regime has made the UK an intriguing prospect for businesses worldwide. At the heart of the British economy is London, which represents approximately a quarter of Britain’s GDP, far exceeding any other region. For some international businesses, it is worth making the bold leap from Dubai to London.
If you decide to move your business to London, you will need to arrange visas for yourself and any workers who will be joining you. To order global visa services for enterprises and businesses, contact Immigration Advice Service, or visit our website to learn more about the UK visas we offer services for.
Why Move Away From Dubai
For years, Dubai has been the promised land for those wanting to establish and run an international business. It is known for its exceedingly low taxes on corporations and its complete absence of personal income and capital gains taxes. Businesses and workers can therefore keep more of their earnings.
Yet, this has created a challenging environment, particularly for new startups. Dubai is an incredibly crowded market, creating a high barrier to entry. Businesses without a strong pre-existing brand will struggle to attract customers and investors.
Dubai has made moves away from oil in recent years, but extraction of the fossil fuel still represents 30% of the United Arab Emirates’ GDP. That yields a highly volatile economy that still fluctuates according to the highly changeable global oil prices. As such, the support the government can offer to new businesses cannot be guaranteed.
Why Move to London
One reason that London is ideal for businesses is the immense pool of talented workers to draw from. Most of the world’s greatest businesses already have a workforce in the city, which you may be able to pull talent from. Such expertise is essential in a global environment in which the majority of startups fail, as these workers can bring new ideas to the table and help you to differentiate yourself from your competitors.
Another of the UK business relocation benefits is that London is also better placed than Dubai if you are aiming to target markets in Europe and the Americas. Britain still has close ties with both markets despite the changes made since the country left the European Union.
Conversely, Dubai may still be a better market if your business mostly deals with clients in Asia and the Middle East.
Why Shouldn’t Your Business Move to London
The main reason that Dubai-based business people will be sceptical about moving to London is the UK’s higher income, corporate, value-added, and capital gains taxes. Corporation tax is 25% on profits above £250,000. Value-added tax is 20%, with some goods and services receiving a lower tax rate of 5%. Capital gains tax ranges from 10% to 28%.
Finally, income tax is 20% for earnings over £12,571, 40% for earnings over £50,271, and 45% for income over £125,140. The income tax bands have been frozen in the government’s most recent budget, meaning that they will not increase alongside inflation.
Another reason to consider avoiding London is its notoriously expensive cost of living, which has been driven by an out-of-control housing market. Overall, the cost of living in London is 30.8% higher than in Dubai, with rent prices being 20% higher. Purchasing power is also lower in London at 12.1%.
As a result, it could be challenging to convince those already working with you in Dubai to come to the UK unless you can offer them a significant pay rise that will swallow the higher costs and taxes. You will also find that your own take-home pay is lower in London if you are not able to increase your revenues and earnings.
Differences in Regulatory Frameworks
Businesses in London have to deal with incredibly strict regulations from institutions such as the Financial Conduct Authority (FCA). This isn’t always a bad thing for business. It is part of the reason that London has such dominance in the financial services industry, as stakeholders can trust that regulations are ensuring due process is followed.
However, these regulations can make life difficult for new and agile businesses, which may struggle as regulations slow them down. Dubai is the exact opposite. Regulating bodies like the Dubai International Financial Centre (DIFC) give businesses a great degree of flexibility.
Should Your Business Move to Dubai
There is no single answer for whether your business is better off moving to London. You will find a better talent pool and more stability in the UK, but also higher taxes and cost of living. Meanwhile, Dubai has a long-standing reputation as a low-tax haven for the wealthy and those who want to become wealthy.
Yet, Dubai still sits within an oil-reliant economy, which yields instability that can kill new businesses, especially startups.
Each business needs to make its own calculation. If a move to London will yield significant growth, that will likely offset the higher taxes and cost of living. Yet, if you can’t forecast for this based on the move, it will usually be better to stay in Dubai.
How Can Immigration Advice Service Help?
The UK also has a strict immigration system, which you must consider if you are moving business from Dubai to London. You and the workers you are bringing with you will need to jump through multiple hoops to get the documentation needed to come to the UK.
Working with immigration lawyers and advisers can make this process far easier, as they will guide you through the entire visa application process, and can then help with indefinite leave to remain (ILR) and citizenship applications.
One of the UK’s leading immigration law firms is Immigration Advice Service, which has helped countless clients secure many types of British visas. Give us a call or visit our website to be connected with one of our expert immigration lawyers today.
