Should You Start A Business In The UAE Or Egypt?

The Middle East has become a central location for business and innovation, with the United Arab Emirates (UAE) and Egypt leading the charge. It’s no surprise then that if you are considering starting a business in this part of the world that these two could be your top choices.

In just a few decades, the UAE has gone from a desert reliant on oil exports to one of the most powerful business economies particularly Dubai and Abu Dhabi. For entrepreneurs with their eye on international expansion, the UAE is the ideal place to start with its world-class infrastructure.

Similarly, Egypt has pushed through economic fluctuations over the years to cement itself as a startup hub, particularly its capital Cairo. The country has signed multiple trade agreements, offering opportunity to trade with neighbouring countries and beyond.

 

How Startup-Friendly Are The UAE And Egypt?

 

UAE: The UAE has always been incredibly startup-friendly, with the government actively supporting new startups through various initiatives. In designated free zones, foreign entrepreneurs can have 100% ownership over their businesses and there is no corporate tax in these areas for sometimes up to 50 years.

Egypt: The country has made great strides in becoming more startup-friendly in recent years especially with initiatives like Startup Egypt. It boasts a very tech-savvy population, resulting in robust fintech and healthtech sectors. It’s also more affordable to start a business there compared to the UAE which is attractive for budget-conscious entrepreneurs.

Overall, both countries are conducive to startups and welcome them with vast financial and networking opportunities. While Egypt’s startup ecosystem may not be as polished as the UAE’s, it is more cost-effective.

 

Tax Regulations In These Countries

 

UAE: In June 2023, 9% corporate tax rate was introduced to businesses whose profits exceeded AED 375,000 per year. However, if businesses in the free zones meet certain criteria, they could be exempt from this. One of the biggest draw cards for entrepreneurs is that there is no personal income tax and the UAE has double taxation agreements with more than 130 countries.

Egypt: The standard corporate tax rate is 22.5% while personal income tax will range from 0% to 25% depending on the individual’s income bracket.

In this case, the UAE has the most favourable tax system specifically for business owners.

 

The Cost Of Living In The UAE And Egypt

 

UAE: The UAE is known to be expensive to live in, with Dubai and Abu Dhabi being some of the most expensive cities in the world. A one bedroom apartment in these areas can start from £1100 per month and expenses like transport and healthcare can be costly. Office rentals are also much higher in premium business districts.

Egypt: Living there is much more affordable even in major cities. A one bedroom apartment in Cairo can range from £185 to £400 per month and utilities are also lower. Employee salaries are also significantly lower than the UAE’s for companies who need to hire large teams.

Egypt is the most cost-effective option for both living and office expenses for entrepreneurs who don’t have a lot of capital to waste while getting off the ground.

 

 

Visa Requirements For Foreign Entrepreneurs

 

UAE: There are multiple visa options to choose from for foreign business owners. An Investor Visa is ideal for company owners and is valid for up to 10 years. For remote workers, a Freelance Visa is available in some designated free zones. A Golden Visa is suited to entrepreneurs and investors who want the 10 year residency while a Green Visa is ideal for freelancers and small business owners.

Egypt: An Investor Visa is available for foreign owners who have registered a business in Egypt. On the other hand, a Temporary Residency is for those who are in the process of setting up a business there. In order to get a Work Visa, applicants need to be sponsored by a local company.

UAE’s visa process is quick and efficient while Egypt’s may take a bit longer. However, it is more expensive to get a visa in the UAE compared to Egypt.

 

Potential Challenges You Could Encounter In These Countries

 

UAE: In addition to costly living and working expenses, the UAE’s market is becoming quite saturated and full of competition. Foreign business owners would need to adjust to the cultural differences as well. Fortunately, English is widely spoken despite Arabic being the official language so foreigners won’t struggle with language barriers.

Egypt: The main issue in Egypt is the infrastructure differences between urban cities and outlying areas which can affect trading. There is also a fair amount of corruption in some industries and business processes tend to be on the slower side which can be time-consuming.

 

How To Start A Business In The UAE Or Egypt

 

UAE: The first step is to decide on your jurisdiction, this could be mainland, free zone or offshore. After this, you can choose your legal entity whether it be a sole proprietorship, limited liability company or free zone company. You can then reserve your trade name and apply for any relevant licenses. All relevant documentation including your business plan and passport copies can be submitted to receive your visa. For free zone companies, the process typically takes between 1-3 weeks.

Egypt: Similarly, you can choose between a limited liability company, joint stock company or sole proprietorship for your business structure. After this, you can reserve your trade name with the General Authority for Investment and Free Zones and register with GAFI. You will then receive your commercial register and tax card, and you can apply for relevant licenses. The process can take anywhere from 3-6 weeks.

 

Should You Start A Business In The UAE Or Egypt?

 

Both the UAE and Egypt offer exciting opportunities for the right entrepreneur and business idea. But when it comes to choosing between the two countries, this will depend largely on you as the business owner, your desired industry and your long-term goals.

The UAE offers a stable market with no personal income tax and the opportunity to expand internationally quickly. This is especially true for sectors like real estate, tech and finance. However, it is more expensive and those who are on a budget may struggle.

On the other hand, Egypt offers affordability and access to a diverse population. There, industries like agriculture, education and fintech have proven to be highly successful.

Either way, a venture in either of these countries could certainly be rewarding in the long run.