Pakistani, Indian Companies Turning To Dubai

Amidst the backdrop of strict monetary policies in India and escalating economic instability in Pakistan, a growing number of companies from both nations are turning to Dubai as their new business hub.

This strategic shift is fueled by Dubai’s business-friendly environment, prime location and robust infrastructure, making it an attractive destination for Indian and Pakistani entrepreneurs seeking stability and growth.

Interestingly, the number of Indian companies capitalizing on business opportunities in Dubai continues to rise, while Pakistani company registrations have decreased slightly over the past six months compared to the first half of last year.

According to new data from the Dubai Chamber of Commerce, business registration trends have shown notable changes. In the first half of 2024, 7,860 Indian companies registered with the Dubai Chamber, marking a 1.5 percent increase from the previous year. In contrast, Pakistani registrations fell by 1.2 percent, with 3,968 new Pakistani companies joining.

Last year, during the same period, 4,018 Pakistani companies were registered, while 7,740 new Indian companies were formed in Dubai.

The Dubai Chamber of Commerce regularly publishes data on company registration trends every three months. Despite the slight decrease in Pakistani companies’ registrations, Pakistan remains a significant contributor to Dubai’s diverse business landscape.

Economic analysts in the Middle East suggest that financial pressures in South Asia, particularly in India and Pakistan, are prompting business owners from both countries to relocate in search of better opportunities.

Conversely, Pakistani companies are grappling with economic instability in their country. Currency fluctuations, an energy crisis and challenges in securing foreign visas have created significant financial hurdles for Pakistani entrepreneurs, leading many to Dubai for business branding and establishment, where they also gain international credibility.

Asif Zaman, an expert in global financial audits, mentions that transferring foreign currency out of both India and Pakistan is a major challenge due to strict governmental regulations. This makes doing business with the international market cumbersome and lengthy. In contrast, Dubai offers seamless transactions with global markets, making it an increasingly attractive destination for businesses from both countries.

For Indian businesses, the Reserve Bank of India’s stringent monetary policies have made domestic operations increasingly challenging. Entrepreneurs are now looking to Dubai, drawn by its ease of doing business and strategic advantages.

Danish Kazi, a Middle East economic expert, points out that the Reserve Bank of India’s stringent financial policies have made doing business in India increasingly challenging. This, he believes, is driving Indian entrepreneurs to Dubai, where the business environment is not only more accessible but also offers strategic advantages.

Economists note several reasons why Indian businesses are flocking to Dubai, including the strict rules in India concerning the conversion of foreign currency accounts, and the significantly lower tax rates in Dubai. Opportunities in the jewelry and cryptocurrency sectors are also broader and more accessible in Dubai, attracting many Indian investors.

Dubai ranks among the top 16 countries globally on the Ease of Doing Business Index, while India ranks 63rd. Additionally, Indian citizens are increasingly purchasing property in Dubai, often through companies, to avoid legal complications in India.

Financial expert Asif Zaman adds that the recent Free Trade Agreement (FTA) between India and the UAE has further encouraged Indian companies to establish operations in Dubai, simplifying the trade process between the two nations.

Data from the Dubai Chamber of Commerce indicates a strong upward trend in company registrations. In the first half of 2024, Indian companies led with 7,860 new entities joining the Dubai Chamber. Pakistani companies followed closely, with 3,968 new registrations—a 1.2 percent decrease compared to the first half of 2023, when 4,018 companies were registered.

Faisal Niaz Tirmizi, Pakistan’s Ambassador to the UAE, emphasized that the growing registration of Pakistani companies is vital for trade relations between Pakistan and the UAE. He expressed hope that “the presence of more Pakistani companies in Dubai not only strengthens our bilateral relations but also has the potential to bring billions of dollars in foreign exchange to Pakistan.”

Sectoral data from the Dubai Chamber of Commerce reveals the diverse interests of these new companies. Among the Pakistani businesses, 41.5 percent are in the trade and repairing services sector, 33.6 percent in real estate, renting and business services, 9.4 percent in construction, and 8.4 percent in transport, storage, and communications.

To boost business activities in Pakistan and Pakistan trade with the UAE, Commercial Counsellor at the Pakistan Consulate, Ali Zeb Khan commented on the rising registration of Pakistani companies with the Dubai Chamber saying that Pakistani companies operating in Dubai would channel foreign exchange back to Pakistan, potentially contributing several billion dollars more to the Pakistani economy.

Highlighting the ease of business in Dubai as compared to other parts of the world, Innovative Industry Business Leader Shabbir Merchant of the Pakistan Business Council highlighted that Dubai offers significant business opportunities due to its efficient processes. Company licenses and bank accounts can be established quickly, often within a few hours, thanks to Dubai’s streamlined one-window operations.

“The growth in the construction and real estate sectors, in particular, is noteworthy,” said Innovative Industry Business Leader Shabbir Merchant of the Pakistan Business Council. “It shows that Pakistani entrepreneurs see Dubai not just as a place to escape economic woes but as a hub for growth and investment.”

The overall number of new companies joining the Dubai Chamber grew by 5 percent year-over-year, with 34,075 new companies registered in the first half of 2024. This growth highlights Dubai’s increasing appeal as a global business hub. Several businesspeople have revealed that, due to difficulties in obtaining regular visas to Dubai, many are establishing businesses there to secure UAE visas and sponsor their family members. It is important to note that under the new regulations, if two partners apply for a visa, only one will be granted a visa unless the partners are from different countries. In such cases, both partners will be eligible for visas. The surge in company registrations is not limited to India and Pakistan. The Dubai Chamber’s analysis reveals that 2,355 new companies from Egypt joined in H1 2024, reflecting the emirate’s broad economic appeal. Syrian companies secured fourth place on the list, with 1,358 new additions, while the United Kingdom ranked fifth with 1,245 new companies. Other notable nationalities include Bangladesh, with 1,119 new companies, Iraq with 799, and China with 742 new companies.