Dubai is trying to accelerate into the future. Ammar Al Malik, MD of Dubai Internet City and Dubai Outsource City, recalls that not very long ago, tech companies would build their products in San Francisco or Bengaluru and have their sales office in Dubai to sell to Europe, Africa and Middle east. In the last few years, Malik says, Dubai has emerged as the destination for tech professionals and entrepreneurs to establish firms and develop cutting edge technology for the world.
The biggest attractions are the ease of setting up business, access to world-class infrastructure, lots of investors, no income tax, minimal VAT (value added tax), and proximity to India. Ajinkya Tanpure, whose Dubai-based venture Crossval provides financial modeling software to speed up fund raises by startups and valuations by investors, says he was able to set up his firm in DIFC (Dubai International Financial Centre) within seven days, as there was complete clarity on paperwork needed. And he got his first paying client within a week of setting up the office. “The cost to set up your firm is also low, the legal framework is well defined, laws are simple and in English,” he says.
Ajith Nayar, co-founder of Cam-Com, which has developed an AIpowered platform for visual inspection, was to be in Dubai for a fortnight to showcase his venture, but now has been there for almost nine months. The former Wipro and Oracle professional says Dubai has managed to wean some top talent from India, US, Singapore and Germany. “The heterogenous pool of talent brings significant value. The second generation of expats who have come out of local universities are an excellent pool to choose from – they can work anywhere in the world. IT salaries here are more or less comparable with anywhere else in the world. The major advantage is there’s no tax, and the living standards are great,” Nayar says.
Dubai’s Startup Hub has more than 10,000 small and medium firms, and Dubai Internet City has over 1,600 companies and is home to over 24,000 professionals. DIFC has almost 27,000 professionals working in more than 2,900 firms – some 350 of them are new fintech startups that have emerged in the past few months. There are also academies to train techies, incubator and accelerator programmes.
Pranav Ajgaonkar, whose Indiabased venture Ganymedes helps companies build apps and products and provides services, says the In5 incubator is among the best in the world. “In5 not only selected our project as a startup idea to incubate, but also made the process of trade license and opening bank accounts easy,” he says. And then, they were “handheld at every step,” through mentoring sessions, meetings with decision makers in companies, investor meets and more.
Madan Kumar, co-founder of D Feminine Collections, an e-commerce platform for ethnic Indian fashion, is another beneficiary of the In5 programme. Kumar says he was given access to mentors who taught him pricing strategy, and the city infrastructure ticked all the right boxes.
These centres also proactively connect startups to infra providers, government agencies, universities.
Dubai is also a great launchpad for forays into the Middle East, North Africa and Europe. And given that it’s home to nationalities from across the globe, selling into distant places like Australia, New Zealand and Latin America are also relatively easy.
However, be cautious of agents that offer help with registering companies, setting up of offices in partnership with local partners, opening bank accounts. They may not deliver anything. Dubai is also a place that sees many companies going bust overnight. It is best to go through official channels.
Raising capital is easy, with a thriving VC scene, but do due diligence on the investor, as there have been cases where promised investments did not come even after shares were allotted.
You should also know clearly which businesses can be set up without local partnership.
(The author was in Dubai at the invitation of Dubai Tourism)