Business Migration; Egyptian Startups Seeking The Dubai Green Pasture

Humans are usually insatiable. For this species of living things, there is always a thought that there is a better version of what they have in possession somewhere else. This thought has often led to migration, change of life partners, change of jobs and many switches in lifestyles. Sometimes they are wrong and sometimes it becomes the best decision of their lives.

Africans are known migrants. Since the slave trade became a thing Africans have been forcefully shipped out of their lands. After the abolishment of the slave trade, leaving their own land willingly became a trend. According to Statista, about 40 million people emigrate from Africa annually. Both skilled and professional Africans would pack their bags and take the next flight leading to their “greener pasture’, along with them goes their businesses. This leads not only to human migration but business migration.

What is Business Migration

The reality of business migration is, every country welcomes international businesses. Business migration is often a line of international investment, as this guarantees investment in the migrated country’s economy. While Africans will migrate with their businesses or idea, they also have to bring capital into their new country to start the business up.

When a business migrates, the previous status is not often important. If the business existed before migration, then there are chances the business could navigate its activities within this new location due to the founder’s previous experience. If the business is a fresh startup, then business navigation might be rusty. Meanwhile, nations of business migration are not usually concerned about the previous status, as long as investment regulations are met. International businesses are welcome.

While nations would excitedly welcome businesses that meet their criteria, businesses could be sceptical about which nation they migrate to. There are several factors that could determine which country a business migrates to some of which could be required capital, tax fees, business regulations and policies, the country’s economic status and many more.

Egyptian Startups Migration To Dubai

Over the years, at least within the last 10 years, Egyptian startups have made the migration to Dubai a trend. Historically, there have been about 50 years of commercial relationships between the two countries. “The bilateral relations between the two countries date back to before the declaration of the union in 1971,” this is according to a report by Zawya.

While traditional commercial activities continue, modern business activities, especially in tech run ahead, leading to migration and acquisition. This would see some top Egyptian startups open branches in Dubai or even move their headquarters to the Emirates.

In 2019 one of the leading Egyptian transportation startups Swvl moved its startups moved its headquarters from Egypt to Dubai. The startup which links commuters with private cars or busses had raised more than $100 million in funding within the last 2 months before it announced its move to Dubai.

2021 saw Capitier expand its services as it opened a new branch in Dubai. The Egyptian e-commerce startup had experienced a funding round of $ 33 million before it announced its expansion plan to the UAE. According to the startup’s statement, “The new opening will positively impact the company’s position and presence in the startup ecosystem both regionally and globally, providing our employees with the opportunity to work and interact with different markets and attract strong investments and new financing.” This would imply that asides from the economic opportunities that most startups sort after in Dubai, startups are also after Dubai’s exposure feature.

In late 2022, Paymob announce it would be expanding its services into the UAE. The Egyptian digital payment service is one of the biggest fintech startups in Egypt. According to the startup, Dubai engenders entrepreneurship and innovation which should give it the opportunity to scale.

Dubai Business Policies and Regulations

Every nation is governed by laws and regulations. While a lawless society is up for disruption a society with regulation that has the potential to build its inhabitants, will see exponential growth, this is the case with Dubai.

In 2021, the UAE published its Federal Decree-Law no. 32 of 2021 on Commercial Companies.

Through this law, businesses are governed and protected within Dubai. This law is not limited to indigenous companies, but also to international companies with the intention to launch in Dubai.

Seeing Egyptian startups moving to the UAE will have many in the wonder of what benefits they tend to enjoy within the MENA space.

Here are a few highlights of the business regulation and opportunities:

• No capital repatriation restrictions.

An educated supply of human capital with diverse professional experience hailing from all corners of the globe.

Safe and robust governance.

• No share capital requirements
• Lower set-up costs compared to other onshore jurisdictions.
• A world-class financial hub.
• No physical office requirements
• A zero-tax regime, meaning no personal or corporate income taxes.

With these kinds of benefits which are also accessible to international startups, business migration to Dubai will be unavoidable.

Will we see more startups expanding to Dubai in the coming years? absolutely, as long as it continues to provide a conducive business environment for startups.