The UAE remained Malaysia’s leading destination in the MENA region, accounting for 33.3% of total exports and showing significant growth of 37.3% (RM773.2 million in 2024 from RM563.3 million in 2023). (source)

After all, Dubai has become a global hub for entrepreneurs in recent years, and Malaysian business owners are no exception. Due to its advantageous location, business-friendly atmosphere, and top-notch infrastructure, Dubai quickly emerges as a top choice for Malaysian entrepreneurs. 

But what is it about Dubai that is drawing such strong interest from Malaysia’s vibrant entrepreneurial community?

This article examines the main factors that influence Malaysian business owners’ decision to expand their operations in Dubai and how the city helps them realize their goals to become worldwide.

Keep reading to learn more. 

Top Reasons Why Dubai is a Good Place for Business Growth

Dubai has become a significant global trading hub and the best spot to invest in several economic areas, including commerce, import, export, logistics, tourism, hospitality, event management, financial services, construction, and more.  

Numerous businesses prefer UAE company registration for several reasons. 

Here are the ten best reasons to choose Dubai for business growth.

1. Strategic Location: Gateway to Global Markets

Dubai is ideally located to facilitate international trade because of its strategic location at the intersection of Europe, Asia, and Africa. Considering its closeness to important markets in South Asia, Africa, and the Middle East, Malaysian businessmen have unmatched access to a wide range of customer bases.  

This advantageous position makes it simple for companies to access profitable markets, thanks to the assistance of top-notch logistics facilities like Dubai International Airport and Jebel Ali Port.

Dubai is an entry point for Malaysian companies looking to expand internationally to connect with new markets. This advantage is further strengthened by the UAE’s expanding commercial links with Malaysia. 

Recent dan ta shows growing economic ties, with non-oil bilateral trade between the UAE and Malaysia exceeding US$ 2.226 billion during the first half of 2023. After all, the UAE is Malaysia’s second largest trading partner in the Middle East, accounting for 32 percent of its total trade with Arab countries.

2. Business-Friendly Policies and Environment

Investors can establish online businesses in the UAE within just 15 minutes, while conventional business setup follows a structured process involving identifying the nature of activity, selecting the appropriate legal form, and obtaining necessary approvals from the Department of Economic Development.

Such initiatives have been put in place by the UAE government to streamline business setup procedures, reduce bureaucracy, and establish an open legal environment. Effective government services that speed up company registration and licensing benefit entrepreneurs.

Furthermore, the UAE offers investors more than 40 multidisciplinary free zones across the country, with benefits including 100% foreign ownership, full repatriation of capital and profits, 100% exemption from corporate and income taxes, customs duty exemptions, and modern infrastructure 

These free zones especially appeal to Malaysian businesses looking for low-cost options to establish their presence in the area.

After all, the Commercial Companies Law of 2020 represents a significant step in enhancing the UAE’s open business environment, allowing Malaysian investors to establish companies with full ownership across most economic sectors, with exceptions only for activities with strategic impact.

3. Tax Advantages

Dubai’s advantageous tax structure is one of the primary reasons that Malaysians choose it. 

The UAE has implemented a competitive corporate tax regime with a standard statutory rate of 9% and a 0% tax rate for taxable profits up to AED 375,000 to support small businesses and startups, while continuing not to charge personal income tax.

Businesses should note that VAT registration is mandatory if taxable supplies and imports exceed AED 375,000, with voluntary registration possible for businesses with supplies or expenses exceeding AED 187,500. 

These tax benefits greatly lower operating expenses and increase profitability for Malaysian SMEs aiming to grow overseas.

4. Robust Infrastructure

Modern infrastructure in Dubai facilitates commercial activities in a number of industries. The city has all the infrastructure required for businesses to thrive in the connected world of today, including cutting-edge transportation and telecommunications networks.

When expanding your businesses or breaking into new markets, you can use Dubai’s sophisticated infrastructure.  

For example, Malaysian SMEs have teamed with Lulu Group International, a significant conglomerate based in the United Arab Emirates, to use its vast retail network to sell their products internationally. These partnerships demonstrate how Dubai’s infrastructure promotes the expansion of global commerce.

5. Cultural Diversity and Networking Opportunities

Dubai draws talent and investors from all over the world because it is a cultural melting pot. Its thriving business environment encourages networking, creativity, and teamwork—all of which are essential for successful entrepreneurship. 

Malaysian business owners can take advantage of this diversity to form partnerships with other companies and learn about international market trends.

Malaysian businesses can exhibit their goods at events like Gulfood, a premier food industry show, and network with possible distributors and customers in Dubai. These platforms assist companies in being more visible and building valuable connections.

6. Supportive Startup Ecosystem

The UAE government actively supports entrepreneurs through more than 10 national programs. They are designed to create a stimulating environment for small and medium enterprises to thrive and grow, making Dubai an ideal location for Malaysian startups looking to expand.

Initiatives like the Dubai Future District Fund, which seeks to provide significant investment money to technology businesses, are advantageous to Malaysian startups expanding to Dubai. These initiatives support innovation while allocating funds to expand operations.

In addition to it, Malaysian entrepreneurs can benefit from the UAE’s Golden Visa program, which offers long-term residency for real estate investors (owning property worth at least 2 million dirhams) and entrepreneurs (with projects valued at a minimum of 500,000 dirhams), providing stability for business growth. 

7. Growing Demand for Malaysian Products

Malaysian products, from culinary items to furnishings, have become increasingly popular in the United Arab Emirates. Programs such as the “Taste of Malaysia Programme @Dubai” feature products produced locally at stores all around the United Arab Emirates. In addition to promoting Malaysian goods, this initiative improves trade between the two nations.

So, now you can capitalize on this need by launching distinctive products that satisfy a range of customer tastes in Dubai’s multicultural community.

8. Opportunities Across Diverse Sectors

Dubai offers profitable prospects in a number of sectors, including technology, e-commerce, real estate investment, tourism, hospitality, and food and beverage (F&B). For instance:

• E-commerce: Because of Dubai’s high internet penetration rates, Malaysian business owners can enter the rapidly expanding online retail sector by starting their e-commerce platforms or collaborating with well-known companies like Amazon.
• Food & Beverage: In Dubai, the international populace is open to Malaysia’s rich culinary legacy. Businesses that focus on halal-certified products have a lot of room to develop in this sector.
• Technology: Free zones such as Dubai Internet City offer the perfect setting for Malaysian tech businesses seeking worldwide recognition.

9. Access to a Growing Economy

The United Arab Emirates (UAE), of which Dubai is a part, has one of the world’s most vibrant economies. A stable and encouraging climate for commercial endeavors is provided by the UAE’s steady GDP development, which is fueled by diversification away from reliance on oil. 

This economic stability lowers risks and creates an environment that is conducive to growth for Malaysian business owners.

10. Expo 2020 Legacy and Global Exposure

The legacy of Expo 2020 Dubai continues to benefit the city. The event demonstrated Dubai’s capability to host top-tier events, and the development of Expo City Dubai as a dedicated free zone has created additional opportunities for international businesses.

Since Dubai continues to draw tourists and businesses from around the world, Malaysian entrepreneurs profit from the enhanced international exposure it has had since the Expo.

11. Advanced Financial Ecosystem

Dubai has an advanced banking system and is home to some of the top financial institutions in the world. Venture capital, private equity, and Islamic banking solutions are just a few of the many financial services available to entrepreneurs. 

The city’s financial ecosystem is very beneficial for Malaysian companies, particularly those that adhere to Islamic finance standards.

12. Focus on Sustainability and Green Business

This city is making significant investments in green infrastructure and renewable energy projects, among other sustainability programs. 

There are many chances for Malaysian business owners in industries like eco-friendly products, sustainable building, or renewable energy to support its ambition for a sustainable future.

13. Innovation-Friendly Policies

Dubai has established itself as a center for innovation by implementing programs such as Dubai 10X and Smart Dubai. 

These initiatives promote companies’ use of cutting-edge technology, including blockchain, artificial intelligence (AI), and the Internet of Things (IoT). These regulations can help Malaysian IT companies create groundbreaking products and expand internationally.

14. World-Class Healthcare and Education Systems

Dubai provides top-notch medical and educational resources for business owners relocating with families. Business owners can concentrate on their endeavors without sacrificing their personal or family well-being because of the city’s excellent quality of life.

Challenges and Strategic Solutions for Malaysian Entrepreneurs Expanding to Dubai

1. Navigating Legal and Regulatory Differences

Understanding and complying with local rules, such as those related to ownership structures, visa requirements, trade permits, and taxation, is essential when starting a business in Dubai. 

In contrast to Malaysia, Dubai has free zones, each of which has its own set of regulations but allows foreign investors to keep 100% control.

Solution:

Talk to a business expert like JSB Incorporation on assisting international business owners. In addition to helping entrepreneurs select the best business structure, services like PRO (Public Relations Officer) support and company formation professionals may expedite the establishment process and guarantee compliance with all legal requirements.

2. Cultural and Language Barriers

Despite Dubai’s high level of globalization, corporate etiquette and cultural sensitivity are still crucial. Differences in communication style or a lack of knowledge about Islamic traditions might lead to misunderstandings.

Solution:

Businesses need to spend some time learning about the area’s habits and culture. The cultural divide can be closed by participating in courses on cultural sensitivity, attending corporate networking events, or collaborating with regional Emirati stakeholders. 

Although many people speak English, business connections are healthier and more polite when one follows Arabic traditions.

3. Competition and Market Saturation

Due to Dubai’s attraction for entrepreneurs, several industries, such as retail, food and beverage, and real estate, may see intense competition. It could be challenging for newcomers to make an impression or gain market share.

Solution:

When you enter the Dubai market, do a complete market analysis. To set your company apart, look for underserved requirements, unique markets, or creative strategies. To increase credibility and loyalty, prioritize branding, online presence, and high-quality customer support.

4. High Operating Costs

Office rentals, license fees, and staff expenses might be substantially higher in Dubai compared to Malaysia. For new companies or small enterprises with little funding, this can be too much to handle.

Solution:

Start in a free zone that provides shared office space and flexible startup packages to control expenses. Additionally, specific regions provide incentives like lowered license fees or help with business setting and visas. The initial financial strain might be lessened by beginning to learn and practice effective money management.

5. Building Local Connections

In the Middle East, connections and networking are essential. Entrepreneurs risk missing out on collaborations, capital, or commercial prospects if they don’t have a strong local network.

Solution:

Join chambers of commerce or business councils in the United Arab Emirates, such as the Malaysian Business Council Dubai. These networks can offer helpful introductions to possible customers or investors, as well as mentorship and assistance.

Wrapping up

Dubai is attracting more and more Malaysians due to its strategic benefits, which include strong infrastructure, advantageous tax laws, and access to international markets. Thanks to the city’s vibrant economic environment, there are countless chances for innovation and growth in a variety of industries.

Book your free consultation call today with the experts of JSB Incorporation to learn more about setting up your business.