Hungary to Dubai: Why More Companies Choose UAE Over the EU

By late 2024, the number of Hungarian participants in the Dubai Chamber of Commerce rose to 201, an impressive 48% growth in 12 months. This momentum echoes the broader trend of global business interest in Dubai, UAE, in pursuit of a more flexible, transparent, and pro-business climate.

Dubai continues to gain even more traction as a jurisdiction for business setup, with more than 120,000 new company formations recorded to date since the start of 2024. Not only do new businesses choose Dubai for company incorporation, however, but also many established firms are looking for a more business-friendly climate that fosters long-term growth.

Over recent years, businesses all over the world have been increasingly moving to the United Arab Emirates (UAE), reflecting the country’s growing appeal as a leading business-friendly hub. In this regard, Hungary is no exception, with Hungarian residents actively shifting their operations to Dubai over recent years.

Business relocation to the UAE has become a massive migration trend these days, expected to accelerate even further as firms seek a jurisdiction with a more favorable environment. While the EU still remains a major market, a growing number of founders choose the UAE, and Dubai in particular, as a more compelling long-term home base.

Why Is Dubai So Popular for Company Incorporation?

Dubai and the wider UAE have become a natural choice for global entrepreneurs for multiple reasons, one of them being a favorable tax framework designed to support business growth.

In Dubai, companies are generally subject to a 9% corporate tax on their taxable income, while certain eligible businesses that meet relevant conditions may benefit from a 0% rate of qualifying income for up to 50 years (activity-specific). With 0% personal income, capital gains, and inheritance taxes for individuals, Dubai becomes especially attractive for startup founders.

Equally attractive is the fast, streamlined incorporation process built around a few easy-to-follow steps, irrespective of the selected structure. Dubai has deliberately reduced the bureaucratic friction, transforming what is often a couple of months’ process in selected European countries into a matter of 14 days, on average. Nonetheless, businesses in industries requiring additional authorization should expect longer times to incorporate, sometimes reaching multiple months.

Highly competitive costs to set up a business in Dubai further strengthen the region’s position. While initial setup fees may sometimes seem higher compared to EU jurisdictions, ongoing operational costs are typically much lower. On average, registering a business in Dubai typically costs between AED 25,000 and AED 29,000 (around $6,800–$7,900), according to Inteliumlaw, industry-leading international business structuring consultants.

In many cases, what tips the scale for entrepreneurs in favor of relocating a business to Dubai from a “home place” is the country’s unmatched business networking. Dubai, with its strategic location, offers immediate access to high-growth markets within arm’s reach, backed by best-in-class logistics, robust infrastructure, and a stable political environment. At the same time, an ecosystem of venture investors, institutions, and multinational firms enables countless opportunities for meaningful partnerships that would otherwise require years to cultivate elsewhere.

Finally, what sets Dubai apart from many mature economies is its long-lasting commitment to pro-business policymaking. While others are tightening the screws, the UAE is making regulations more transparent and commercially viable, introducing residency options for investors and sector-specific incentives, among others.

Considering the above, a growing number of Hungarian and EU firms decide to move to Dubai, UAE, for its rare mix of strong advantages that is very hard to rival.

Why Not the EU: Challenges Driving Firms to Look Beyond Europe

The Dubai company incorporation and relocation boom isn’t solely a Hungarian phenomenon but a broader EU trend. More and more EU firms are moving toward jurisdictions that offer superior business conditions for sustainable long-term growth.

For many years, the European Union symbolized stability and great opportunities, yet this promise has begun to feel increasingly constrained. Across Europe, companies face an ever-expanding complex web of regulations that often translate into heavy administrative burdens, especially for small startups. Higher compliance demands, in turn, demand more resources that would otherwise be invested in companies’ growth.

At the same time, changes in tax policy and steadily rising operational costs increase the complexity, offering little to no incentives for small and medium-sized enterprises to remain competitive.

Access to banking has also become more complex for certain business categories. Stricter banking rules and widespread “debanking” made it harder to open accounts and secure venture funding. In the end, Europe is becoming harder to do business in, as new barriers arise.

Against this backdrop, Dubai appears more advantageous than the EU for established businesses. Dubai offers a combination of regulatory stability, low taxation, streamlined incorporation procedures, and an unmatched ecosystem – all designed to support growth. For many entrepreneurs, therefore, leaving the EU in favor of Dubai is all about finding a country offering more room to move forward.

Looking Ahead: Will the Trend Remain?

Should the current dynamic persist, the outflow of European companies is expected to accelerate. Hungary and other EU member states are expected to see more firms exploring Dubai, offshore hubs, and other more competitive destinations as part of a broad global shift. Yet, it would be unfair to mention Hungary no longer remains an attractive jurisdiction for company formation; it’s just Dubai that moved ahead for more business-friendly conditions.

What is emerging instead is somewhat of a hybrid model: an increasing number of Hungarian companies are choosing not to exit the EU market altogether but rather establish a holding, branch, or relocate some part of their business to Dubai. By doing this, companies can preserve the EU access while benefiting from Dubai’s fiscal benefits and regulatory clarity, among others.

As more Hungarian and EU companies consider partial or full relocation, however, many soon realize it is not simply a matter of selecting a free zone and filing paperwork. In this context, firms such as Inteliumlaw, specialized in international business structuring across Dubai, Hungary, and other leading global jurisdictions, become essential to help companies build compliant, efficient, and future-proof structures to best serve their long-term priorities. By guiding businesses through the legal and regulatory intricacies of registering a company in Dubai or Hungary, such consultants help relocate seamlessly and remain competitive over the long term.

As European companies rethink where and how they grow, those guided by qualified professionals are best positioned to fully leverage the advantages of their home base effectively and grow with confidence.