The shifting global economic landscape is creating new winners and losers in international trade. With the United States rolling out a fresh wave of tariffs, businesses that are affected by the new tariff are feeling the pressure of rising costs and shrinking profit margins. For many, this has triggered a “great tariff migration,” a strategic relocation of operations to countries that still enjoy normal tariff and tax environment.

At the center of this movement is the United Arab Emirates (UAE), a nation that has positioned itself as one of the most attractive global hubs for manufacturing, logistics, and corporate headquarters. With its low tariffs, competitive corporate tax regime, and unmatched geographic location, the UAE is fast becoming the destination of choice for companies seeking stability, growth, and cost efficiency.

Why Tariffs Matter: The Growing Cost of Doing Business in the U.S.

The new U.S. tariffs, often exceeding 10% on imported goods, are reshaping supply chains and forcing companies to rethink where they manufacture, source, and distribute. These higher duties add immediate costs, reducing competitiveness in global markets. For manufacturers and exporters, the search is on for jurisdictions that can deliver tariff relief, tax efficiency, and seamless access to global trade networks.

The UAE provides exactly that.

Low Tariffs: A Competitive Edge for Global Trade

One of the UAE’s biggest advantages is its low import duty of just 5% on most goods. Compared to double-digit U.S. tariffs, this represents a direct and significant cost saving for businesses dependent on imports.

In addition, the UAE leverages its free trade agreements (FTAs) through the Gulf Cooperation Council (GCC) and its own Comprehensive Economic Partnership Agreements (CEPAs) with countries such as India, Israel, and Turkey. These agreements often reduce tariffs on goods traded between partners to 0%, unlocking enormous advantages for companies in manufacturing, re-export, and global supply chain management.

For businesses navigating rising U.S. trade barriers, this translates into greater flexibility, higher margins, and a long-term competitive edge.

The UAE’s Pro-Business Tax Environment

While the UAE introduced a corporate tax regime in 2023, it remains among the most competitive in the world:

• 9% corporate tax on profits exceeding AED 375,000 (approx. USD 102,000)
• 0% corporate tax for Qualifying Free Zone Persons (QFZPs), provided certain conditions are met

For businesses engaged in manufacturing, logistics, or international trade, establishing operations in a UAE free zone offers unparalleled benefits. Free zones such as Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), and Ras Al Khaimah Economic Zone (RAKEZ) provide:

• 100% foreign ownership
• Full profit repatriation
• Simplified compliance and licensing

By leveraging these incentives, businesses relocating to the UAE can legally achieve near-zero corporate tax exposure while aligning with international tax transparency standards.

Strategic Location, The Heart of Global Trade

The UAE’s location is more than symbolic, it’s logistical gold. Sitting at the crossroads of Europe, Asia, and Africa, the UAE connects companies to over 2 billion consumers within a 4-hour flight.

• Ports & Airports: Jebel Ali Port (the largest in the Middle East) and Dubai International Airport (one of the busiest cargo hubs in the world) ensure smooth import and export flows
• Industrial Free Zones: JAFZA, KIZAD, and RAKEZ specialize in manufacturing and warehousing solutions, offering pre-built facilities, customizable plots, and integrated logistics services
• Infrastructure: From advanced highways to state-of-the-art digital connectivity, the UAE has built an ecosystem designed for global scale operations

This makes the UAE uniquely positioned for companies relocating from high-tariff environments to expand regional reach while cutting operational costs.

Understanding Startup Costs in the UAE

While the benefits are compelling, it’s essential for businesses to plan carefully for the initial investment required when relocating operations to the UAE. Typical startup costs include:

• License Fees: AED 5,500 to AED 30,000 annually, depending on activity and free zone
• Warehousing or Land Lease: From AED 60,000 annually for basic facilities, higher for custom-built plants
• Visas & Documentation: AED 4,000 to AED 6,000 per visa
• Share Capital: Ranges from AED 10,000 to AED 1,000,000 depending on free zone requirements (though some zones have no deposit requirement)
• Administrative Fees: One-time costs of AED 10,000 to AED 20,000 for company registration, name approval, and setup

Initial costs are not extraordinary, however, the long-term tax savings, reduced tariffs, and streamlined business environment more than offset the investment.

Why Businesses are Choosing the UAE

The UAE is not simply a tax haven, it is a strategic relocation hub that aligns profitability with compliance. For businesses grappling with rising tariffs in the U.S. and elsewhere, the UAE offers:

• Lower trade costs through reduced tariffs and FTAs
• Tax efficiency with free zone incentives and low corporate tax
• Global connectivity via world-class infrastructure
• Ease of doing business with streamlined regulations and pro-business policies

This unique combination positions the UAE as a global leader in attracting manufacturing, logistics, and multinational headquarters, making it the top choice for companies participating in the great tax migration.

Final Thoughts

The new era of U.S. tariffs is reshaping global trade. Businesses that fail to adapt risk rising costs and reduced competitiveness. By contrast, companies that relocate to the UAE can leverage its low tariffs, favorable tax regime, and unmatched geographic advantages to future-proof their operations.

At DP Taxation Consultancy, we specialize in guiding businesses through the complexities of UAE corporate tax filing, Transfer Pricing Documentation and free zone company formation. Whether you’re considering relocating your supply chain, establishing a new manufacturing base, or optimizing your tax structure, our Tax experts provide the insights and strategies you need to thrive in today’s global economy.

Get in touch with us today to explore how the UAE can become your next business growth hub.

Contact us by booking a consultation at CygalAttorneys.com  or dptc.ae

Or call us at +971 050 943 4155 for tailored solutions!

For further inquiries, email us at bd@dptc.ae.