| Business friendly: Dubai is wooing foreign enterprise
Is your next job going to be in Dubai' For a long time now, the Gulf has attracted Indians, both knowledge workers and labourers. There are around 5 million Indian workers in the Gulf. The United Arab Emirates has 1.8 million, Saudi Arabia 1.4 million and Bahrain 0.4 million.
So what’s new' Indians have so far gone to West Asia to work for local companies or MNCs. Now, Indian companies will be setting up shop there, courtesy the Dubai Outsourcing Zone (DOZ).
“It’s an idea whose time has come,” says the CEO of a large Indian software and services company. “We are definitely going to go there to set up a disaster management centre.”
Dubai is offering a host of incentives for companies signing up (see box). According to DOZ director Esmail Al Naqi, more than 70 international and regional companies have already registered. The DOZ is targeting the business process outsourcing (BPO) space. The key sectors are banking and financial services, information technology, insurance and healthcare. Among the companies that have signed up, 40 per cent is from Europe. Some 20 per cent are from the US. The rest are local companies.
“Indians don’t want to rock the boat at home,” says the CEO quoted earlier. “They will have to face problems from an avaricious government, which will assume this is a tax-evasion device. They have registered too, but through their US or UK subsidiaries.”
Lower taxes (actually nil) and a minimum of redtape are reasons for Indian companies to go there. One add-on they will definitely like is the restrictions on employee mobility. Attrition is a huge problem back home in India. In the DOZ, if you jump ship, your work permit will be withdrawn. All employees will have to work for at least one year in a new job.
The numbers don’t sound threatening. The DOZ is talking about 7,000 people working in the zone at the end of the first year with around 5,000 being added annually. That’s less than what Infosys adds every year.
Does it make sense for an Indian to take up an offer at the DOZ' If it’s his own company going there, the answer is yes. You need to look a little closer if you are planning to take up a new job. First, the salary hike is not likely to be that much —around $1,000 a month at the bottom end of the scale. Secondly, there are the restrictions on movement, particularly movement out of the DOZ. Dubai is business friendly, not employee friendly.
Thirdly, all the talk about a better lifestyle fades away when you actually experience it. The quality of life in Indian BPO environments is improving in leaps and bounds. You need to think it out now because, if you are a BPO employee, an offer is bound to come your way. The DOZ has already tied up with three Indian recruiting majors and expects 60 per cent of the employees in the zone to come from India. You have to decide now. Will it be a smart career move or indentured labour'
Government incentives at the Dubai Outsourcing Free Zone
• 100 per cent tax-free environment for 50 years
• No corporate tax
• No income tax
• No customs duty
• 100 per cent foreign ownership
• Full currency convertibility
• No restriction on profit or capital repatriation
• Stringent attrition law
• Reduced real estate cost
Source: Dubai Outsource Zone