Companies Move Headquarters to Dubai

COMPANIES MOVE HEADQUARTERS TO DUBAI

July 2015

Investing in the UAE

The UAE has long maintained a policy of encouraging foreign investment.

From a financial perspective, the stable UAE dirham pegged to the US dollar, the absence of income and corporate taxes, exchange restrictions and the ability to repatriate capital and profits make it a very attractive proposition when considering setting up a business in the UAE. There are minimal trade barriers and tariffs within the region, allowing an investor the freedom to trade goods at competitive prices.

The development of free zones (FZs) in Dubai provides many locations within which a foreign investor can set up a 100 percent owned business with each FZ focusing on certain types of investment. An easily available skilled workforce, modern communication, sea and air transport network, excellent infrastructure and the geographical location of the UAE all serve to provide the foreign investor with a stable and reliable investment climate.

The UAE developed a reputation as a strong regional business hub and more and more business is attracted, creating healthy market competition and a wide choice for consumers in the UAE and the region whose spending habits are increasing year on year. The UAE is also experiencing a growing number of visitors and this contributes to the excellent quality of life enjoyed by local and expatriate residents alike.

UAE headquarters

Over the past years, many multinational businesses have chosen to locate their regional headquarters in the UAE, which has led to Dubai gaining a reputation as a regional centre.

The UAE is a white listed onshore jurisdiction that offers offshore jurisdiction services as well as opportunities that exist only in mature industrial and financial hubs. International businesses moving to the UAE find themselves in a thriving market with

HALLIBURTON TO MOVE HEADQUARTERS TO DUBAI“… Halliburton Co. surprised the energy world, members of US Congress and the city of Houston today by announcing it will open a new corporate headquarters in the UAE and relocate its CEO there. The world’s second-largest oilfield services company and biggest US contractors operating in Iraq, said the new office in Dubai will help strengthen its presence in the Middle East, Africa and the Far East, where its business is growing. Today, the company posted a press release on its website saying its chairman and CEO, Dave Lesar, had announced that he would be relocating to Dubai to open a “corporate headquarters office”. Lesar made the announcement at a regional energy conference being held in Bahrain. Halliburton said the move to Dubai is part of a previously-announced strategic plans that calls for expanded relations with state-owned oil companies and direct more resources and investments in growing the company’s business in the Eastern Hemisphere. More than 38 percent of Halliburton’s $13 billion oilfield services revenue last year came from sources in the eastern hemisphere, where the firm has 16,000 of its 45,000 employees…”

(Houston Chronicle, March 2007)

PFIZER TO SET UP NEW REGIONAL HQ IN DUBAI “…The world’s leading research-based pharmaceutical company, announced the establishment of its new medical and marketing headquarters in Dubai, licensed by Dubai Biotechnology and Research Park (DuBiotech) in TECOM Free Zone. Pfizer’s move comes as part of its strategy to establish Dubai as its regional hub for Middle East and Africa. The pharmaceutical major boasts over 1,300 employees in the Middle East with regional offices in Dubai and Cairo. Detailing DuBiotech’s advantages, Jeffrey B. Kindler, Chairman and CEO of Pfizer Inc, said: “DuBiotech has a holistic vision on how the biotechnology industry is required to operate for registering consistent growth. The biotechnology park has realized the need for top-tier talent to sustain this line of business. Dubai has a wonderful investor-friendly climate. The extraordinary vision of its leaders has ensured the emirate is our location of choice for setting up Pfizer’s Gulf regional headquarters…”

(Malta Media, April 2008)


excellent infrastructure between the west and the developing east, able to generate new business. A pro-business government encouraging foreign investment, has developed the country into a cosmopolitan centre welcoming a diverse specialist and competitive workforce.

Dubai is well established as the prime destination for multinational corporations to set up their regional base and serve the high growth markets in the Middle East, Africa and South Asia most efficiently. Its global reputation as a wealth generator and investment stronghold continues to drive the city’s growth. Dubai is also an ideal launch pad and complete growth ecosystem for large, medium and small enterprises across diverse sectors. Local authorities work alongside new ventures and existing companies to ensure their smooth journey towards solid and sustainable success. They assist and guide on all aspects of business decisions, from identifying opportunities across key sectors and determining the best legal structure to connecting investors to a vast network of government and private sector facilitators and clients.

In a nutshell, the UAE has excellent conditions for foreign investors, both regional and international have sought opportunities to place capital in the country as it earned a reputation as a safe haven. According to the office of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, a total of US$11bn of international investment flowed into the economy in 2013, US$9.2bn in 2012 and US$7.8bn in 2011.

Tax efficient double tax treaties

The UAE has concluded nearly 80 double tax treaties, many of them with OECD countries.

UAE’s extensive double tax treaty network enables investors to reap the tax benefits of using a UAE based entity to hold investments worldwide, while also increasing the attractiveness for foreign investors to set up business in the UAE.

UAE is a zero tax country. Although countries in the past were often reluctant to allow significant benefits in treaties with low or zero tax countries, many recent treaty partners have realized the advantages of making it attractive for inward investments. Some of the UAE’s recent treaties have been very favourable for the UAE investor despite UAE being a tax free country.

In many treaties which use the exemption method of taxation there are ample opportunities for UAE subsidiaries or headquarters of European American and Asian holding entities to set-up, meet substance criteria, become tax efficient and reduce substantially overall group taxation.

CONTINENTAL MOVES REGIONAL HQ FROM GERMANY TO DUBAI Continental has relocated its regional head office to Dubai, UAE. Prior to 2015, the tyre manufacturer’s sales, marketing, and customer services departments for the region were based in Hanover, Germany. The firm claims that the relocation will help drive expansion in its passenger and light truck tyre (PLT), and commercial vehicle tyre (CVT) segments across the Gulf and wider Levant. “Our motto is “in the market for the market”, and by basing our team in the region, we are now better placed than ever to understand local requirements for the benefit of the region’s customers and drivers”, CEO Andreas Beitram added.

(Construction Week, February 2015)

STARWOOD MOVES GLOBAL HEAD OFFICE FROM US TO DUBAI “.… Starwood Hotels and Resorts Worldwide has relocated its global headquarters from Stamford, CT to Dubai for a month-long period. The move follows Starwood’s first temporary relocation of its headquarters to China in June 2011. “With 80 percent of Starwood’s pipeline coming from rapidly growing markets, it is simply not possible to lead a truly global business from a boardroom in Connecticut”, said CEO Fritts van Paasschen. Dubai epitomizes this changing face of travel, and we expect this relocation will deepen our relationships with partners, associates and customers. Just as with our one-month relocation to China in 2011, our time in-market will spark new ideas that will fortify our position as the most global highend hotel company…”

(Hotelier, March 2013)

Common tax exemptions in many treaty countries are exemptions for profits derived from a so called permanent establishment (“foreign branch exemption”) and exemptions for profits derived from a qualifying subsidiary (“participation exemption”). For an investment in a tax free country like the UAE, the application of an exemption in the country of residence is clearly beneficial, as the company will effectively benefit from the fact that there is no domestic taxation of its business.

Brazil knocking

“Although almost 12.000 kilometres away, the South American nation is now expanding its presence in Dubai”, according to Sidney Alves Costa, Middle East director of ApexBrasil, the Brazilian Trade and Investment Promotion Agency.

“In recent years, the Brazilian presence here has increased a lot. We have 34 companies present here in different sectors such as food, we have regional operations of Embrear, the world’s third largest manufacturer of airplanes, we have two Brazilian banks present here, we have companies in sectors of cosmetics, spare parts and medical devices” he said.

Last year, Brasil Foods (BRF), the world’s largest poultry exporter, also announced plans to set up a US$120 million factory in Abu Dhabi’s Khalifa Industrial Zone (Kizad).

“This shows that the UAE is one of the most important markets for our production for chicken – it makes sense to process it here and export to regional markets” said Costa.

The main concern for investors from Brazil is that they do not know much about the region, he says, but that is changing.

“We have around 9 or 10 companies that are debating whether to come here and we hope to enter 2014 with at least 40 companies”.

According to Costa, although Brazil has established its reputation in the UAE’s food sector, the country has much more to offer.

“We have extremely qualified construction companies that have solutions for some needs that even US and European firms do not have and people are not aware of this”.

(Gulf Business, July 2013)

Dubai sees potential with South Korea

“South Korea is one of the leading Asian partners for Dubai and the UAE, visible across critical sectors ranging from energy and infrastructure to automobiles and consumers electronics”, Fahad Al Gergawi, CEO of Dubai FDI says.

GLOBAL HOTEL ALLIANCE RELOCATES HEAD OFFICE TO DUBAI “… Global Hotel Alliance (GHA), the world’s largest alliance of independent hotel brands, has relocated its head office from Geneva to Dubai. While the move is partly believed to be motivated by tax benefits, it is another sign of the growing magnetism of Dubai and its geographical suitability as a base to target emerging markets. Last month Starwood relocated its head office to Dubai. The relocation of Global Hotel Alliance from Geneva to Dubai is one more affirmation that Dubai is now seen as a centre of global tourism and a strategic location from which to access key growth markets…”

(Gulf Business, April 2014)

SWISS BELHOTEL TO MOVE HQ TO DUBAI AMID EXPANSION PLANS “… Noel Massoud, who joined the hotel operator Swiss Belhotel in August 2014, said the group recorded strong performance in the region in 2014 and expected growth to continue through 2015 as a result of expansions. He said Swiss Belhotel has decided to move its headquarters from Hong Kong to Dubai to follow up its regional expansion plans that include the opening of at least 20 hotels in the Gulf and other parts of the Middle East…”

(Arabian Business, January 2015)

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South Korean investments in the UAE has been steadily growing over the past few decades and hit UAE dirhams 826 million in 2011 when Korea’s state power company was entrusted with building the UAE’s first nuclear reactor. Major investment outcomes are also expected in the near future.

With Dubai getting ready to host the World Expo 2020, South Korean construction and engineering expertise has an unrivalled opportunity. On another note, South Korea is known to promote its small and medium enterprises to compete on a global stage, much like Dubai.

“Preparations for the World Expo 2020 along with the expanding free zone network and the integrated multimodal logistics hub at Dubai World Central are elevating domestic demand and supply chains in Dubai’s growth to a new level. We will invite South Korean investors to explore this new and exciting business landscape and offer them Dubai FDI’s expertise in facilitating foreign investment”, Mr Al Gergawi added.

(Gulf Times, June 2015)
