Both the UK and the UAE are great places to start a new business. In order to make the best decision for the business you want to start, you need to look at certain aspects of both these countries. These aspects include work culture, taxes, cost of living, and more.
Work Culture
Businesses’ ability to develop roots in a new location is influenced by work culture, therefore it’s critical to think about how to blend in with other cultures.
The work culture in the UK and the UAE are similar in the sense that they both have a form of hierarchy in the business. Each employee has a specific and clear role in the business and the chain of command must be respected. Professionalism and punctuality are also both highly valued in the UK and UAE work culture.
The only difference, even though it’s not big, is the work-life balance. Work-life balance is considered important in the UK work culture. Employees prioritise personal time and leisure activities alongside work commitments. However, in the UAE long working hours and dedication are prominent features of the UAE work culture. Employees often display a strong work ethic, going above and beyond the standard hours to accomplish their tasks.
Corporate Compliance
Corporate compliance is a crucial aspect of successfully running a business in the UK or in the UAE as it involves following laws, regulations, and industry standards. Corporate compliance in the UAE is not easy. The UAE has a complex regulatory framework that can be difficult to understand and implement. In the UK, corporate compliance is a bit easier than it is in the UAE. However, there are still some challenges you can face.
Cost of Living
The cost of living is an important factor to consider when opening a business in the UK or UAE. The cost of living in the UK is more expensive than in the UAE. The UK ranks number 13 on the cost of living list and the UAE ranks number 19.
Economic Growth
The unemployment rate in the UK is 4% and in the UAE it’s 2.6%. This shows that there is more economic growth in the UAE. However, it is predicted that the UK will see economic growth of 1.1% in 2024, with the projection for 2025 remaining at 1.0%.
Incentives to Attract Your Business
Both the UK and the UAE offer various incentives to entice your business. In the UAE they offer tax incentives. The UAE is mostly tax-free, with no personal or corporate taxes. Investment interest is also not taxed, and real estate taxes are minimal. They also provide foreign ownership. Businesses can be 100% foreign-owned in free zones and in 122 economic activities across 13 sectors.
In the UK there are corporation tax relief which allows businesses to deduct the costs of running their business from their profits before tax. There is also Social Investment Tax Relief (SITR) which offers up to 30% tax relief on share purchases or new debt investment loans for startups.
Taxes
In the UK the corporation tax rate you are charged is determined by the size of your profits. For the 2024/25 tax year, corporation tax rates are as follows:
- Profits under £50,000: You are charged at the small profits rate of 19%.
- Profits over £250,000: You are charged at the main rate of 25%.
In the UAE a 9% effective tax rate is applied on income or profits of the participation. In the event, such a 9% effective tax rate is not applicable based on the relevant jurisdiction’s tax regime.
When looking at the above-mentioned, it is clear that the UK and the UAE are both attractive places to start a business. However, the decision is up to you and it must be based on your needs and what incentives you find attractive.
