What business you should launch in the UAE if you want to succeed

Written by Vitaliy Chiryassov, CEO of UPPERCASE

When starting a business in the Emirates, certain industries offer more significant benefits, including a larger market size, higher demand, better profit potential, and stronger government support.

But, as a businessperson setting up here, it’s important to choose the vertical carefully. This means looking beyond just numbers — it’s essential to understand the field and have experience in the vertical you choose.

Venturing into an unfamiliar vertical in a country as culturally and legislatively unique as the UAE is a surefire way to rapidly deplete your funds. Keep this in mind as we explore the top 7 most profitable industries for starting a business in the Emirates.

What industries are the best types of business to open in the emirates?

Today, a growing number of both new and established businesses are expanding into the Emirates to tap into the lucrative UAE markets. In fact, thousands of businesses are setting up in the UAE. To illustrate the scale of this impact, consider that Dubai’s free zones aim to significantly boost their contribution to the emirate’s GDP, targeting $68 billion by 2030. With the market not yet oversaturated, now is an ideal time to start a business in the Emirates.  But what industry should you choose? If you’re entering this market now, here’s a shortlist of options to consider.

1. Construction

The Emirates, especially Dubai, is among the fastest-growing mega-cities, famous for colossal projects like Burj Khalifa or the Palm Jumeirah. But beyond these landmarks, a significant influx of international businesses and expats has fueled a boom in constructing residential real estate, office buildings, and commercial facilities throughout the Emirates. Today, the country’s construction industry is estimated at USD 38.99 billion in 2023.

What’s more, the sector enjoys a strong development agenda, like the “Projects of the 50” initiative. The government is aiming to attract nearly $150 billion in foreign direct investment by 2030, offering lots of support for new construction businesses.

In this rapidly developing vertical, there’s a huge demand for construction companies, design and architectural firms. businesses producing or trading building materials, and companies offering construction equipment rental.

 

2. Agriculture

When you picture Dubai, you probably imagine a futuristic city of steel-and-glass skyscrapers rising from the desert sands. Surprisingly, the UAE is striving to become a powerhouse in produce. The Emirates are working to reduce their reliance on imported foods, which currently account for 85% of consumption, by increasing home-grown food production. The UAE’s agriculture market, valued at USD 3.31 billion in 2024, is expected to grow further, reaching USD 4.09 billion by 2029, at a compound annual growth rate (CAGR) of 4.30%.

In Ras-al-Khaimah, there’s already a successful traditional agricultural sector focused on fruits and vegetables like tomatoes, cabbage, eggplant, squash, and cauliflower. These crops meet the country’s needs during the growing season.

But the harsh climate and intense summers have led the government to bank on innovative farming methods. Vertical and hydroponic farms, which are ideal for growing leafy greens and salads, are rapidly developing in the KEZAD special zone of Abu Dhabi. This presents a fantastic opportunity for new startups focused on sustainable farming.

 

3. Tourism

Tourism is now the largest contributor to the UAE’s GDP outside the oil and gas sector. In 2022, the travel and tourism sector contributed nearly 167 billion AED to the Emirate’s GDP — that’s a growth of 60.2% over the previous year. The trend doesn’t  stop there.

The World Travel and Tourism Council (WTTC) forecasts that the sector will contribute around $49.18 billion to the UAE’s economy in 2023, which is nearly 10% of the total GDP. This remarkable growth stems from the country’s recent efforts to diversify its economy.

Tourism in the Emirates, particularly in Dubai, is synonymous with luxury. Known as the glamorous “Venice of the Gulf,” Dubai draws high-rollers from around the world. This constant influx creates a steady demand for travel agencies, apartment and villa rentals, and organizations that manage various events – including exhibitions, concerts, seminars, conferences, and festivals.

 

4. Logistics

Remember that the UAE’s food consumption is 85% imports? Yes, Dubai’s import-export sector is highly profitable. The United Arab Emirates freight and logistics market is estimated at 18.63 billion USD in 2023 and is expected to grow to 27.51 billion USD by 2029, expanding at a CAGR of 6.71% during the forecast period​​.

The emirate’s strategic central location and diverse economy make it an ideal place for an international trading business, or a logistics center. Establishing such a business in Dubai offers significant opportunities for expansion.

 

5. Education

The UAE’s education market is projected to grow at a CAGR of 5.55% from 2022 to 2027, with an expected increase of USD 817.5 million in market size. This growth is driven by a rising prioritization of education. Wealthy locals and expatriates alike tend to prefer private institutions over government ones due to noticeable gaps in the latter’s curriculum compared to international standards. As a result, there’s a high demand for quality education in the Emirates.

The UAE government also backs the private education sector through various policies. For example, the National Strategy for Higher Education 2030 aims to achieve superior scientific and professional education standards.

This environment is ripe for both traditional and digital educational projects. Language schools, art schools, private institutions catering to affluent families, and educational marketplaces are all likely to find a receptive market in the Emirates.

 

6. Trading and retail

In the Emirates, trading stands out as a highly profitable venture. Low, 5% duty on trade within the UAE opens wide opportunities for local and international trade and also Ecommerce.

But there’s a nuance to consider. To sell retail goods across the entire country, beyond just your Free Zone, you must register a local company in the MainLand (we’ll cover the differences between registering a business in a Free Zone vs. the MainLand later in the article). As it stands, a UAE citizen co-founder isn’t required to complete the registration. But if your company is registered in a free zone, to trade outside that zone, you’ll need a distributor.

 

The hottest imports in the Emirates include:

• Fresh vegetables and fruits.
• Meat and meat products.
• Flour and pasta.
• Car spare parts.
• Mineral fertilizers.
• Textiles and ready-to-wear clothing.
• Household chemicals.
• Electrical appliances.
• Luxury cars.
• Exclusive gadgets and jewelry.

 

7. Bonus industry: opening an IT business in the Emirates

IT is undeniably the future, and Dubai is a key player in this arena. The emirate’s booming economy makes it an attractive hub for businesses focused on innovation.

To foster growth in the IT sector, Dubai established hubs like Dubai Internet City (DIC), Dubai Silicon Oasis and DIFC Innovation Hub.

With digitalization becoming increasingly essential, there’s a growing need for digital solutions. For instance, starting an AI-focused startup in Dubai could be highly rewarding.

Dubai might seem like a digital utopia, but it’s a mixed bag. While it’s an excellent location for launching an IT business, it doesn’t necessarily hold a competitive edge over other countries in this sector. Nations like the UK, Canada, Singapore, and the US also offer impressive programs for IT enterprises, making the decision less straightforward.

However, if you do choose Dubai as your IT company’s base, you’ll be in good company. Digital entrepreneurs from around the globe are drawn here, not just for the dynamic IT community, but also for the high quality of life that cities like Dubai and Abu Dhabi offer.

Key factors to consider when choosing your field

Choosing a business sector in the UAE requires an understanding of local nuances and legislation, and careful planning, much like anywhere else in the world.

Free zones vs the mainland

The UAE is segmented into Free Zones and the Mainland, each with its own set of rules and business permissions.

Free Zones are designated economic areas within the Emirates where foreign entrepreneurs can operate businesses, acquire or rent properties, and hire staff. There are about 50 Free Zones in the UAE, with 20 in Dubai alone. Each zone is autonomous with its own corporate regulations.

These zones cater to businesses targeting foreign markets, with a focus on sectors like IT, consulting, industry, education, logistics, real estate, trade, and telecommunications.

Entrepreneurs choose a Free Zone based on their business focus. Popular choices include DMCC, DAFZA, JAFZA, Dubai Internet City, Dubai Media City, Dubai Knowledge Park, Dubai Silicon Oasis, KIZAD, and RAKEZ.

 

The Mainland, in contrast, is the broader territory of the United Arab Emirates. Businesses registered here can operate across the entire country, making it ideal for investors and entrepreneurs planning a long-term presence in the UAE market.

Costs involved in starting a business in the Emirates

The expenses for launching a business in the Emirates vary depending on whether you choose a Free Zone or the Mainland.

 

In a Free Zone, the average cost for a business license ranges between 6000 to 7000 USD, though this can vary depending on the specific zone. Additionally, each Free Zone has its own visa costs for business owners and employees, typically around 2300 USD per person, including insurance.

 

In the Mainland, business costs depend on the business type, the number of visa quotas, and the premises’ type and size. Employee costs include a two-year residency and insurance, around 2300 USD, similar to free zones. Renting business space is required, with a minimum of 19 square meters. On average, establishing a company on the Mainland can cost anywhere from 8,000 to 25,000 USD. Therefore, the starting budget should be at least 10,000 USD, and often significantly higher.

These cost estimates don’t include the capital necessary for growing your business in the Emirates, which is a notably expensive country. Expect to invest in higher salaries, costly raw materials, and other significant expenses.

 

Before starting your business, it’s crucial to conduct extensive research. We advise spending at least 2-3 months living in the Emirates to get a feel for the culture and determine if it’s the right fit for you. During this period, you should:

 

• Precisely calculate the required startup capital and develop a detailed business plan.
• Perform a thorough market analysis to understand the current landscape and realistically assess competition. Remember, you’re likely not the only entrepreneur eyeing this market, after all.
• Prepare meticulously for your company’s launch. This includes getting all documents in order to avoid complications during registration or further down the line.

 

Wrapping up

The Emirates is an excellent destination for setting up companies in construction, agriculture, tourism, retail, education, and IT industries. The government, keen on continuing economic diversification, actively supports international investment through initiatives like the “Projects of the 50.” Remember, a well-crafted business plan and attention to detail are key to making your venture in the Emirates a shining success.

If you find yourself feeling overwhelmed, don’t hesitate to seek assistance from an expert specializing in UAE business setups. They can help you navigate the entire process, from choosing the right industry to preparing and registering your business, and even provide ongoing support post-establishment. After all, sometimes, even a camel needs a guide through the desert.