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What we do – Global Immigration
Today, the world faces a humanitarian crisis in migration issues. Migration has been a highly discussed topic in politics in recent years, where some leaders and candidates seek to eradicate it. But it is something that has always existed with the same objective: a better quality of life.
For several years, crises and wars in countries that we probably do not have on our radar, even European countries such as Germany and Spain, have had periods where their population is looking for a better place to live. Currently, the world scene speaks to us of social crises in Central America, the Middle East, and Africa, where people flee their countries as refugees or undocumented.
North America and Europe are the destinations of most people who pursue a better quality of life. The UAE is also one of the countries with the highest transit of migrants.
Immigration is seen as something bad, as an assault on the country and its jobs. But it is not, it is a natural process.
What benefits does migration bring to companies and the economy?
Migrants arrive at a position which they want to perform and fulfill correctly. Contributing to that economy and that company, helping them expand, and creating new jobs. Consequently, this helps improve wages and working conditions.
Also, immigration consultants in Dubai contribute to a balance in the labor force of places that are in demographic decline. Where the arrival of migrants would help stabilize a future decrease in the labor force.
The trend indicates that the UAE will continue to be a transit country, but will also start to be a destination country. Although there are current projects that seek the integrity of migrants and refugees, long-term projects and policies are necessary. The country needs a plan that benefits its economy and migrants.
Plans for education, art, culture, and sports are essential for migrants to have opportunities to establish themselves in what can be a new home. Hence, we also need to be more open to this issue and be more humane to those who have to run away from their homes in search of safety and better living conditions.
How do labor immigration services contribute to development?
Many times, you may hear about international labor immigration as a problem. In some media, only the most tragic face of immigration exists. While politicians of all ideologies use this issue as a missile to provoke confrontation or draw public attention. It is true that, if not managed correctly, labor migration can become a source of exploitation of workers, inequality, and poverty.
On the other hand, if immigration in Dubai is accompanied by measures to support migrants focused on their prospects in terms of employment and skills development, it can become a source of wealth generation for countries of origin and immigrants, workers themselves, and their families.
How to ensure labor migration with a win-win approach?
International labor mobility is an important driver of the economy in many advanced countries. Not only for migrants and their families but also for local development. Several countries of the Organization for Economic Cooperation and Development (OECD) already use international labor migration as a key factor for sustained economic growth.
In the UAE, one in five (22%) workers with talent are migrants. In the United States, for instance, they represent 12%, and in Germany, 9%. According to the International Organization of Employers (IOE), immigration services in Dubai will continue to play a vital role for economies due to the need for additional workers to sustain long-term growth and prosperity.
What is the role of talents?
In this sense, it is very important that the discussion on the management of the movement of workers between countries or regions of the world is not only to the prevention of irregular migration. The discussion must go further, with the aim of achieving the so-called “triple victory”. That is, maximizing the benefits of the countries of destination, the countries of origin, and of the migrants themselves.
This “triple victory” implies, first of all, that migrants develop their human capital (skills, competencies, attitudes, and behaviors). Thanks to the experience gained, and can build better work careers.
For destination countries, it means that they can attract talent. Also, receive labor with skills and competencies that do not exist in the local market. For countries of origin, it means benefiting from financial remittances sent by migrants while they are away. And from more experienced human capital when migrants return.
To guarantee this “triple victory”, the management of the workers’ movement must be guided by an understanding of immigration services in the UAE. This, as an integral process in which it is essential to have support measures for migrants focused on their prospects in terms of employment and skills development.
These measures must be in a continuous and sustained manner. Before the migrant leaves their country of origin, during the time they are in the countries of destination, and after their return home.
What is the role of public employment services?
In many advanced countries, public employment services (PES) play an important role in managing the international mobility of workers. PESs support migrants and employers in implementing bilateral or multilateral agreements that are facilitating the movement of workers.
The PES has developed instruments to help migrants and employers before, during, and after the mobility process. Thus, PES is an important partner in promoting an adequate, legal, and safe flow of workers between countries within and between the different regions of the world.
This has led both the public and private sectors in developed countries to become actively involved in the development and operation of PES in terms of managing the international mobility of workers.
What do we know about the role of managing the external mobility of workers by PES in the countries of the region?
Unfortunately, there is little information on the support measures for migrants in the PES of the region. Recent data from the book The World of Public Employment Services reveals whether the PES of the countries offers support measures to the migrant. Such as the registration of job offers abroad, information services and advice for a job search abroad, help foreign companies looking for migrant workers, etc.
The survey shows great variability in terms of migrant support services. In general, most of them still have a limited set of measures. Due to the foregoing, it is important to develop and strengthen the PES of the countries of the region. This, in order to take better advantage of the opportunities that the international mobility of workers can bring both for the countries of origin. As well as for the countries of destination and the countries of origin.
Beyond the controversy it provokes at the political level, immigration makes sense in economic terms. In the longer term, both skilled and low-skilled immigrant workers bring benefits to host countries, increasing per capita income. Also, improving living standards.
Skilled immigration services in Dubai contribute talent and knowledge. While non-special immigrants fill essential occupations where native labor is in short supply, allowing the nation’s population to fill jobs that requires more talent. Furthermore, these benefits are widely distributed throughout the population. Hence, it may well be worth bearing the short-term costs of integrating these new workers.
Migration is nothing new
Opinions about immigration services in Dubai have taken on more positive overtones in recent years. However, immigration is not a new phenomenon. Although the recent surge in refugees has brought it to the fore, advanced economies already have a large and growing population of foreigners.
They constitute between 15 and 20% of the working-age population in many advanced economies and around 30% in some Anglo-Saxon countries. Such as Australia and New Zealand. Between 1990 and 2015, half of the growth generated by the working-age population in the city of advanced economies was due to immigration services. This will play an essential role in most advanced economies, whose working-age population will otherwise shrink.
Although the immigration of low-skilled workers has been the largest (and has remained more or less constant as a percentage of the adult population over time), skilled labor is increasingly migrating. Anglo-Saxon countries tend to have a higher proportion of skilled migrants than continental European and Nordic countries.
Because immigrants tend to be younger than the local population on average, they contribute to the working-age population. The best-known channel through which they improve per capita income. But as this new study shows, it is not by far the most important.
Migration can be of great help
According to this study’s findings, the most important channel through which immigration services in Dubai influence per capita income is labor productivity.
Immigration services in Dubai increase GDP per person and productivity. A 1 percentage point increase in the share of immigrants in the adult population pushes GDP per person in advanced economies up to 2% over time. This improvement is mainly attributable to an increase in labor productivity, not to an increase in the labor force/population ratio.
Both low-skilled and skilled migrants improve general productivity. The benefits of immigration services in Dubai are not limited to the contributions of high-skilled workers. With their specialized knowledge and diversity of skills. Low-skilled immigrants also have a significant impact on overall productivity as they complement the skills of the population:
- Low-skilled immigrants perform essential occupations for which the local population is in short supply and thus, contribute to more efficient functioning of the economy.
- When low-skilled immigrants turn to more manual routine tasks, the native population tends to move towards more complex occupations that require command of the language and communication skills in which they have a comparative advantage.
- In a prominent example of complementarity, low-skilled immigrants provide housekeeping and childcare. Allowing women from the host country to re-enter the workforce or work longer hours. In fact, in countries with a higher presence of low-skilled immigrants, there are more skilled women in the labor force.
- Prosperity spreads. An increase in the proportion of immigrants raises the average income per person of the bottom 90% of the population and the top 10% of the population. Although the most qualified immigrants benefit more from the average income of the population.
There is work to do
Immigration services in Dubai can bring substantial benefits to advanced economies, in terms of higher GDP per capita and better living standards. These benefits are more or less throughout the population. Nonetheless, the key to harvesting them lies in addressing the challenges posed by migration in the short term and, in particular, in ensuring that immigrants integrate into the labor market.
To achieve this, it is necessary to promote language learning, support job search, to better recognize the training and work experience of immigrants and facilitate entrepreneurship. Although the integration of immigrants may increase the pressure on the fiscal cost in the short term, these policies allow them to find and keep a job at a level commensurate with their skills and contribute increasingly to public finances.
At the same time, the native population also needs help to adapt. Among other things, by acquiring new skills. Authorities must be careful not to overburden public services such as health care and education so that social tensions do not escalate.
In less than 40 years, Dubai has grown from a local business community to one of the most inspiring, exciting, and successful cities in the world. With a diverse and multicultural population, Dubai offers its residents and businesses a unique environment, a bustling metropolis with cultures from over 190 nationalities. And a quality of life and work unrivaled in the Middle East.
With a native population of about 170,000, the number of immigrant residents in Dubai currently stands at over two million people, thanks to its attractive lifestyle and investment incentives.
Tax-free policies and penalty-free repatriation of profits carry enormous personal and business benefits. With prominent opportunities for private savings and professional benefits. As thousands of new businesses are discovered every year, Dubai has become the ideal bridge between East and West, as well as the central hub of the region’s import and export market, being one of the most lucrative in the world.
Competitive benefits – Regional headquarters
Dubai is the main destination in the Middle East for the establishment of regional headquarters of multinational companies. Its global reputation as a wealth generator and investment stronghold continue to fuel the city’s growth. Today, knowledge-based and service sectors dominate Dubai’s economy.
Inspiring and innovative companies establishing their operations in Dubai are supported by the emirate’s ambition to advance technology, and pioneer innovation. Also, promote knowledge leadership. World leaders in the business, logistics, financial services, hospitality and tourism, real estate, construction, and manufacturing sectors today make up more than 90% of the emirate’s business activities.
This diversification, coupled with its strategic location, world-class infrastructure, and simplicity of business philosophy make Dubai a natural choice for local and international organizations. Whether starting operations or expanding to the Middle East.
Although its meteoric rise may have been swift, Dubai has earned a place as the top destination in the Middle East for the establishment of regional headquarters for multinational companies. Its global reputation as a wealth generator and investment stronghold continues to fuel the city’s growth. Attracting both multinational corporations and international SMEs.
The city’s commercial infrastructure is unrivaled, boasting state-of-the-art telecommunications systems and unprecedented connectivity. All serving a wide variety of clients ranging from the most established international companies to start-up SMEs.
Dubai’s location and transportation and travel network, as a link between Europe and Asia, make it easier to meet in-person.
Dubai is the third largest re-export center in the world and is home to the Jebel Ali Port, one of the ten busiest ports in the world. Dubai World Central Airport will be the largest in the world and during 2011, its first year of full functionality, it registered a volume of 90,000 tons of air transport.
Events and samples
Dubai offers industry-leading events and displays for millions of visiting professionals in search of local products and services each year. The meetings, incentives, conventions, and exhibitions (MICE) industry alone generates millions of dollars in revenue for service providers, hotel owners, and merchants, among many others.
Taxes in the United Arab Emirates
The federal government does not collect income or corporate income taxes on individuals and businesses. In addition, there are no withholdings on remittances abroad, whether in the form of dividends, interest, royalties, or fees for technical services, etc. Coming from the other companies operating within the United Arab Emirates.
However, under Emirati tax regulations, corporate income tax (including branches and permanent headquarters) may be levied at a rate of 55%. However, in practice, corporate income tax today is only levied on oil and gas companies. In some Emirates, municipal taxes are charged. Likewise, customs duties (import) are generally marked at a value of 5%. But, there are many items exempt from taxes. Such as medicines, most food products, capital goods, and raw materials for industries, etc.
Entities accredited in the territory of the UAE
Accredited entities located in the territory are permitted to conduct business within the territory in the form of a sole proprietorship, partnership, or limited liability company (LLC). They must have a local sponsor directing the business activities.
An LLC can be formed with a minimum of two and a maximum of 50 people. The minimum capital required varies by emirate (for example, Dubai requires a minimum of AED 300,000, while Abu Dhabi requires AED 150,000).
The UAE Business Company Law states that foreign participation in an LLC cannot exceed 49% of the capital and the remaining 51% must be held by a UAE citizen. However, the foreign investor may include in the constitutive instruments the following protective clauses:
The UAE’s free trade zones have proven attractive to foreign investors. As they allow 100% foreign ownership of the company’s capital. In the UAE, there are about 36 different free zones.
Each free trade zone in the UAE is designed around one or more business sector categories and only licenses are offered to companies falling within those categories. Each independent free trade zone in the UAE is regulated by a Free Zone Authority (FZA). Which is the administration in charge of issuing operating licenses in the FTZ and assisting businesses in establishing their business in the FTZs.
Investors in the United Arab Emirates can register a new company as a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing parent company, and located in the UAE or abroad. Free trade zone entities, which are treated differently from foreign onshore entities, have their own rules and regulations. These entities are offered tax holidays for a period of 15 to 20 years, which is also renewable.
Advantages and features
- Companies in free trade zones provide the option of residence in the UAE.
- They have the right to request tax residence certificates. In this way, customers will be able to enjoy the benefits of the treaty to avoid double taxation.
- The least number of stockholders and managers is one.
- All shares must be fully paid up at the time of allotment. Bearer shares or differential classes of shares are not permitted. Some free trade zone authorities do not require the company to deposit capital in a bank.
- Full foreign ownership is allowed and free zone authorities do not set direct taxes or VAT.
- It is possible to open a corporate bank account in a bank in Dubai, UAE.
- A comprehensive solution to address all the formalities required by the government, which makes them easy to create.
Offshore companies can be registered through registered agents licensed and approved by the relevant free trade zone authority. UAE offshore companies are offered in the following jurisdictions:
- Offshore companies in the Jebel Ali Free Trade Zone (EZFJA Offshore)
- International Businesses in the Ras Al Khaimah Free Employment Zone (EIZFRAK)
- Ras Al Khaimah Investment Authority Offshore Companies (EAIRAK Offshore)
- Provides business confidentiality regarding financial matters and allows the growth of resources without interference.
- Asset protection.
- Limited Liability.
- Elimination or reduction of capital gains.
- No accounting or audits are required.
These offshore companies can continue their business activities, act as a parent company, and offer investment and advisory services abroad. Offshore companies in the Jebel Ali Free Trade Zone are the only foreign entities that can have full ownership of the real estate in designated areas of the UAE.
Companies cannot do business with persons/companies residing in the UAE. Or carry out operations related to banking, finance, or insurance activities. Offshore corporations can have a bank account in the United Arab Emirates.
Double tax treaties
The UAE has signed advantageous treaties to avoid double taxation with nearly 100 countries. Making it one of the most efficient jurisdictions to establish participation structures. They have not implemented rules on controlled foreign companies, thin capitalization, or transfer pricing.
The UAE is a signatory to the Global Standard for Automatic Exchange of Information (CRS). Also, it has started to collect relevant information through financial institutions. The UAE begun the automatic exchange of information in 2018.
Many clients choose to establish their residence in the UAE in order to benefit from the automatic exchange of information. This is a relatively simple and affordable process. Those wishing to obtain residence in the UAE can establish a simple entity in a free trade zone. Also, they can maintain an address, submit a utility bill and travel to the UAE at least once every six months. They will then be able to open an account at a local bank and use their UAE residence to obtain UAE tax resident status in the relevant financial institution systems.
Why the United Arab Emirates?
With seven emirates and more than 40 Free Zones within individual emirates established to conduct general or industry-specific activities throughout the UAE, doing business in this region can be challenging. Only in Dubai, there are more than 20 open sectors. Each with its own laws and regulations, making the ease of doing business in the country a complex journey. Our teams in the UAE can help you get through this process.
In 2019, there were 169 million migrant workers in the world. They made up 4.9% of the global workforce in destination countries. These migrant workers constituted approximately 69% of the global population of international migrants of working age (over 15 years of age) in 2019.
In addition to this, we find the effects of economic, political and environmental crises and changes in demographic characteristics. With an aging population in some parts of the world and a high proportion of young people in others. This contributes to increasing labor migration.
Now, despite the rigor that could be evidenced in the development of migration processes in the coming months, this may be a key moment for the negotiation and signing of treaties and cooperation agreements between States. This, as a measure to encourage trade between countries. It will result in beneficial measures and prerogatives for the parties. Among which could be found the migration and mobility of business personnel or for labor purposes.
It is precisely here where globalization is clearly an opportunity. It is consolidated as an essential axis of the global economy. This is because the joint work of governments, with local and international companies, will be essential to restore and reactivate the global economic fabric.
Our main areas of expertise
PEO Middle East provides a service for all of your compliance needs in the Emirates. From recommending the most appropriate entity type and jurisdictions for establishing a company, to the ongoing management of accounting, corporate governance, and even payroll. We address everything from the most complex to the most basic compliance issues For example, license renewals and assisting your team with visa and immigration services in the UAE issues.
From setting up a company to day-to-day business, PEO Middle East helps you through the entire cycle of your company. Our local team with local knowledge has the support of a group with global reach. This, to help you do business seamlessly across borders.
Large and persistent wage gaps around the world are the main drivers of economic migration. From low-income to high-income countries, migrants often triple their wages after moving to another country. Therefore, helping millions of them and their families in their home countries escape poverty. Destination countries often benefit from migrants filling essential roles ranging from advancing the technological frontier in Silicon Valley to building skyscrapers in the Middle East.
Despite the allure of higher wages, for more than five decades the share of migrants in the global population has remained virtually unchanged. Meanwhile, global trade and investment flows have increased exponentially. Between 1960 and 2015, the percentage of migrants within the world population has fluctuated slightly between 2.5% and 3.5%. This is a consequence of the strong dissuasive effect of national borders, distance, culture, and language.
The outsourcing of the working class
With particularities, the conditions of migrant workers in the UAE do not differ excessively from those of their peers. The migration of the countries of the Gulf Cooperation Council has based on the relative wealth of the countries. Thanks to the income derived from hydrocarbons and the enormous demand for employment in the countries of emigration.
This allows governments to play with temporary work visas. And companies to establish relatively low salaries that allow them wide profit margins. Given the wage disparity between the Gulf economies and the countries on their periphery, immigrants earn incomes that enable them to support their families and save for retirement.
The citizens of UAE and other Arab countries, meanwhile, will continue to enjoy the easy incomes allowed by the kafala system and excellent public services.