In a recent interview with Ofer Sachs from a cybersecurity consulting firm, he stated that “In recent months we have led rigorous conversations with UAE government departments and private institutions via endless calls, with flights back and forth to help companies relocate. This conflict [Ukrainian-Russia], whether over sooner or than later will have a lasting impact, and it’s time to act, in support of the employed civilians in eastern Europe, and to maintain business for customers worldwide”
In light of this, here are some insights to help others in their decision-making process, looking to relocate their teams; it is imperative to ensure Israeli companies make cost-effective decisions, maintain profitability, and leverage this crisis to build strong sustainable foundations for all stakeholders.
Some companies did encourage employees to live in remote locations and become digital nomads, however, employees with children are not so privileged and must consider their family's safety and future. So, if you’re a company considering relocating your employees, maybe the UAE is a good option for you?
Aside from the UAE’s sunny weather and beautiful beaches, here are some main factors of consideration from a corporate perspective or for an ex-pat considering relocation.
Macro Analysis of the UAE
Located in Asia, the UAE is one of the top trade locations in the eastern world, divided into seven Emirates – Dubai, Ajman, Raz Al Khaimah (RAK), Sharjah, Umm Al-Quwain, and Fujairah, and the capital city - Abu Dhabi. The country has over 200 nationalities and a population of 10.08 million people, with 8.92 million people being ex-pats!
The main languages used are English, Arabic, Urdu, Malayalam, and Hindi, with Islam as the official religion; however, the practice of other religions is allowed. And what is most appealing is that workers in the UAE (within a very generous tax bracket) pay no income tax!
Moreover, the country has a very high quality of life, with literacy rates close to 95%, a life expectancy of 77.8 years, a high-ranked healthcare system, low crime rates, high standards of international education, and thriving social opportunities and extracurricular activities.
Working in the UAE
For ex-pats it is considered one of the best places to live, work and settle, with people working 40–48-hour weeks; a Forbes report declared that 75% of people stated that achieving a good work-life balance was important to them, boasting modern offices, fast internet speeds, and convenient travel to work via modern public transportation.
Setting Up Business - Which Zone is Best for You?
First, to relocate employees and set up an office in the UAE, you must obtain a business license; this will open all the doors of opportunity. However, you must choose which emirate to set up in, and within each of these are ‘mainland zones’, and ‘freezones’, each adhering to different cost structures, ability to provide foreign working permits/licenses, associated corporate costs, and specified business advantages.
These licenses can cost anything from AED 500 – 2,000+ (USD 136-545+), with a further cost per visa application accounting for around AED 6,000-7,000 (USD 1,634-1,905) per employee.
Also, when setting up your business you will need a local partner, though not all zones require this. From here, the application itself is straightforward, requiring information such as company name, passports, list of business activities, email, mobile number, and photo of the founders.
To transition new employees, you must have office space; Dubai is the most expensive option, with Abu Dhabi, Sharjah and RAK following this respectively. But in areas such as Ajman, you can get cheaper rates of around AED 10,000 - 40,000 (USD 2723–10,890) p/a per 5-7 employees. And the more visas or employees you wish to relocate, the more desks/office space you must pay for.
In terms of living situations, the UAE has very good facilities, again with Dubai having luxurious yet expensive options, but places like RAK can be more cost-efficient, where your employees can find themselves living in a 3-bedroom apartment with access to a pool and gym for around AED 30,000 (USD 8,167) p/a.
For families with children, it’s highly important to ensure the kids are getting a formidable education. Emirates attend school for free and do not study with ex-pats, so for internationals, it will cost money to send children to English-speaking institutions, prices ranging from AED 14,000 – 40,000+ (USD 3,811- 10,890+) p/a, making it one of the more expensive considerations.
To put it simply, you must be ready to visit the UAE to acquire your business license, secure visas for employees, set up a business bank account, and secure office space. From here it will involve helping employees relocate by securing an apartment, importing their goods, setting them up with HMRC/payroll, and attaining a medical license, car, and other essentials.
All in all, the full process can take between 4-6 weeks, but it will be important to consider the full combination of where and what license you have, office location and size, salary, and economic cost differences, how far employees live from the office, amenities, and ensuring to have a trustworthy local partner for a successful transition.
Written by Ben Woolf, Technology Strategy Consultant, Herzog Strategic