For many years, the United Arab Emirates (UAE) was considered the leading business hub in the Middle East, attracting entrepreneurs with its low taxes, advanced infrastructure, and financial opportunities. However, recent changes, including the introduction of corporate tax, stricter banking regulations, and rising living costs, have made doing business in Dubai more challenging.
As a result, Oman is emerging as an attractive alternative, offering favorable tax conditions, a stable regulatory environment, and a flexible banking system.
1. Why Has Doing Business in Dubai Become More Difficult?
1.1 Introduction of Corporate Tax
Previously, businesses in the UAE enjoyed near-total tax exemptions, attracting companies from around the world. However, as of June 1, 2023, a 9% corporate tax was introduced for companies earning over 375,000 AED (~$102,000).
While free zones still offer some incentives, their businesses must now comply with new tax regulations. This change has particularly affected small and medium-sized enterprises (SMEs), which previously benefited from full tax exemptions.
1.2 Stricter Banking Regulations
The UAE banking system has tightened compliance requirements, especially for foreign entrepreneurs from Russia, Belarus, and other CIS countries.
Key issues include:
Key issues include:
- Account freezes without explanation – UAE banks have implemented stricter Know Your Customer (KYC) procedures, causing even successful businesses to face account restrictions.
- Restrictions on international transactions – Russian entrepreneurs report difficulties in processing transactions, especially in USD and EUR.
- Proof of funds requirements – Enhanced Anti-Money Laundering (AML) measures make business operations more complex.
1.3 Rising Costs of Business Operations
Over the past two years, Dubai has seen a significant increase in:
- Office rent (+30–50%)
- Commercial real estate prices
- Housing costs for employees
These rising expenses have reduced profitability, pushing many businesses to explore more affordable alternatives.
2. Why Are Entrepreneurs Choosing Oman?
Oman is becoming increasingly popular among entrepreneurs due to its favorable tax policies, business-friendly banking system, and flexible regulations.
2.1 Full Tax Exemptions
Unlike the UAE, Oman remains one of the few countries with zero taxes:
- No corporate tax for most businesses
- No tax on dividends
- No VAT for international transactions
This allows companies to significantly reduce costs and maximize profits.
2.2 Easy Company Registration
Oman offers a simplified company formation process:
- Company registration takes up to 2 weeks
- Bank accounts can be opened in just 1 day
- 100% foreign ownership is allowed
Unlike Dubai, where business owners must find local sponsors or comply with complex bureaucratic procedures, setting up a business in Oman is much easier.
2.3 Business-Friendly Banking System
Omani banks do not freeze accounts without valid reasons and are more open to working with international clients, making business operations more predictable and secure. Additionally, Omani banks:
- Support international transactions without restrictions
- Ensure stable account services
2.4 Strategic Location and Economic Growth
Oman is strategically located between Europe, Asia, and Africa, making it a strong hub for trade and investment. The country is actively investing in logistics and industrial sectors, offering excellent opportunities in:
- International trade
- Logistics and export
- Manufacturing and industry
- IT and consulting
2.5 Political and Economic Stability
Oman is a politically stable country with a predictable economic policy. Unlike the UAE, which frequently introduces new laws and tax reforms, Oman focuses on attracting investors by maintaining a stable business environment.
Oman offers low taxes, a supportive banking system, and a stable business environment.
If you’re considering an alternative to the UAE, Oman could be the ideal destination for your business.
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