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Dubai the unexpected start-up hub

Via Virgin : At first glance Dubai might not look like a start-up friendly city. But all those glass and steel towers can be deceptive. If you scratch away at the surface you’ll find a city with the potential to dominate the MENA (Middle East and North Africa) region as a start-up hub.

One of the important factors in Dubai becoming a major player for start-ups is its airport. Dubai International Airport has more than 2,000 flights in and out of the city each day. This gives it the necessary links with other parts of the MENA region and also routes to Europe and (most importantly) to Silicon Valley, bringing in both talent and investors.

While some start-ups might be put off by Dubai’s strict laws, it’s worth being aware that the rulers will turn a blind eye to some start-up developments. For example, Uber is not strictly legal based on the country’s statues but operates unchecked. This is probably down to the fact that Uber offers a luxurious and convenient service – something that Dubai cannot resist.

Tinder, on the other hand, isn’t quite as lucky. With its associations to sex and cohabitation it doesn’t fit well with a lot of the state’s laws and although the app will work, you can’t see other users’ images, which kind of defeats the point. So it seems that Dubai remains hardline on issues regarding morality, but is open to letting the rules slide for other ventures.

For start-ups, Dubai’s location can be a major pull as although there are many differences between Middle Eastern states, they also provide a huge common market. Over 200 million people live across the Middle East, sharing a language and values, providing a huge opportunity to start-ups with great ideas.

In fact, Dubai is attracting entrepreneurs from other Middle Eastern territories, such as Abdullah Alshalabi, who moved his start-up Fishfishme from Kuwait to Dubai two years ago.

Shortly after the move, he wrote on Wamda: “Our team can already feel the benefits of moving here. It changes the way you think about your start-up, pushes you to think bigger and really prepares you to become a more global start-up. Each day we get to meet interesting people that open our eyes to new opportunities and we continue to get new exposure from media and are already working with new partners to grow the business.”

But before you make the big move, there are a few things that it’s worth considering:

1. Dubai has its benefits

Dubai was the first emirate to establish the economic free zone model to incentivise foreign businesses to set up shop there. It means that non-native founders don’t require a local business partner who would hold a 51 per cent stake in the company and instead they get to retain 100 per cent of the company ownership.

Start-ups in free zones also benefit from a 50 year exemption from corporate and income taxes.

2. Dubai is competitive

Dubai attracts entrepreneurs who can’t get a visa for Europe or the USA, so you’ll find some of the best entrepreneurial talent in the city. But of course that means that it’s going to be competitive. But don’t let a bit of competition put you off, like they say, if you can make it there, you can make it anywhere.

3. Dubai is expensive

If you’re planning a move to Dubai, make sure you’ve got some funds behind you. The city has one of the highest costs of living for non-natives, currently rated 67th out of 211 cities by Mercer’s 2014 cost of living ranking – that’s a 23-spot jump on the year before due to increases in accommodation costs and demand.

Additionally there’s the cost of visa to consider. Founders require a $2,000 visa that will cost $5,000 to renew every two to three years. That, combined with high costs of living, and free zone fees mean that starting up in Dubai could cost as much as $15,000, according to Sameer Sortur, founder of market intelligence company SquareCircle Tech.

4. Dubai’s local support is excellent

Fortunately, the city has more support for businesses than you could ask for. As a start-up you’ll need all the help you can get and being surrounded by the well-educated workforce can only be beneficial. Plus, there’s been a boom in accelerators and co-working spaces that are helping some foreign entrepreneurs to survive.

One such start-up facilitator is Dubai Internet City’s In5, which helps start-ups keep their costs down by offering affordable office space and discounts on registration and visa fees.

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