Apr 21, 2023

Maksim Zagornov talks about business peculiarities in Emirates at a Business Forum in Chelyabinsk

The Business Ambassador of Business Russia to the UAE Maksim Zagornov talked about the peculiarities of running a business in the UAE, current difficulties, and ways to overcome them at a Business Forum in Chelyabinsk. The event held by Business Quarter publisher brought together representatives of the South Ural enterprises who are interested in entering the UAE market. At the invitation of the Business Ambassador, the Commercial Director of the Ras Al Khaimah Economic Zone (RAKEZ) Mustafa Shaker also took part in the forum.

According to Maksim Zagornov, the United Arab Emirates remains one of the most reliable jurisdictions for Russian business despite the Western pressure. "Political neutrality as a state policy, rapid economic growth, 100% security and a constant influx of foreign capital make the UAE today perhaps the only place enabling Russian business to be preserved and expanded and giving unlimited opportunities for growth," Maksim Zagornov said.

Last year alone, the trade turnover between Russia and the UAE increased by 68% and reached a record $9 billion. The number of Russian companies that opened their representative offices in the Middle Eastern country grew to 5,000. "Now a new stage of development of Russian business in the Emirates is beginning – setting up and launching real production facilities," the expert highlighted.

Meanwhile, the UAE banking environment is under pressure from the West – this complicates the process of incorporation of Russian business into the Middle Eastern country. The term of company opening has significantly increased, compliance requirements to be met by Russian clients have become stricter, there are problems with opening bank accounts, and bans on the work of Russian banks' branches in the UAE are being introduced. Thus, in March 2023, the UAE Central Bank revoked the license of the MTS-Bank branch in Abu Dhabi due to sanctions risks, and in April Emirates NBD started blocking investment accounts of Russians.

"However, even in such conditions we have solutions including with regard to opening bank accounts. One of them is to set up companies in large free economic zones, such as RAKEZ. This increases chances to get banks’ approval", told Maksim Zagornov.

The expert provided advice on the key stages of establishing and doing business in the UAE, talked about taxation peculiarities, business development prospects taking into account different industry niches, as well as shared the results of the work of Business Russia Trade House in the UAE. Over the past year alone, it has assisted more than 100 Russian companies in opening branches in the Emirates, carried out export deliveries, and established close cooperation with several free economic zones, including RAKEZ.

Following the invitation of the Business Ambassador, Commercial Director of the Ras Al Khaimah Free Economic Zone (RAKEZ) Mustafa Shaker delivered a speech at the forum. He noted that RAKEZ is one of the largest zones with a long history, uniting more than 40,000 residents on its territory today.

"Branches of Russian companies are being actively opened in RAKEZ today. In 2022 alone, the number of residents from Russia tripled to a record 1,700. Small and medium-sized companies as well as large Russian business players come to us," Mustafa Shaker said.

RAKEZ issues 5,000 types of licenses to ensure the activities of companies of various branches. Meanwhile, RAKEZ focuses on supporting industry, services, media, and private entrepreneurship (SMEs).

The key advantage of RAKEZ is a favorable price range: the cost of doing business is 30% lower than in other free economic zones, as Mustafa Shaker noted. In addition, RAKEZ is ready to offer options that guarantee the opening of current accounts in the Emirates. In 2023, RAKEZ enlisted the support of 25 partner organizations in Russia, among them the Business Russia Trading House in the UAE. The plans are to increase the number of partners by 2 times.

The Director of the Chelyabinsk branch of the international real estate agency "DDA Real Estate" Rustam Amashaev also spoke at the business forum. He noted that it was the Russians who broke all records for buying real estate abroad. The top five most popular destinations for investing in real estate are Turkey (30%), UAE (26%), Cyprus (14%), Portugal (7%), Greece (5%).

"Today, many people buy housing in the United Arab Emirates and rent it out. In addition, the country has a good attitude towards Russians. Therefore, the trend towards buying foreign real estate will only grow. Now Turkey is ahead of other countries, even in Dubai it is now possible to buy real estate cheaper than in Sochi. The infrastructure there is developing by leaps and bounds and active construction is underway," said Rustam Amashaev, director of the Chelyabinsk branch of the international real estate agency DDA Real Estate.

The markets of Turkey and the UAE are the most developing and promising. Buyers are attracted by very loyal conditions for the purchase of real estate. For example, property developers in Dubai provide installments of up to 7 years, as well as the absence of income tax and the opportunity to obtain a residence permit are also important.

Nikita Ivantsov (Chelyabinsk), Head of the Europe-America and Middle East division of MAKFA, and Nikolay Ermishin (Istanbul), co-founder of Phygital Signage, a platform for AI screens remote content management content generator, also shared practical business cases with Ural entrepreneurs.