Key facts
- UK hospitality VAT rate is 20%, compared to a European average of 12%.
- UK corporation tax is 25% and dividend tax is over 40%.
- Human rights experts warn of exploitation and poor worker protections in the UAE.
- Migrant workers in the UAE are tied to employers via a sponsorship system.
- Migrant workers are denied the right to form trade unions in the UAE.
Some of London's most acclaimed restaurants are expanding into the Gulf states, driven by a "tax tsunami" in the UK and a perception of a better work ethic abroad, according to restaurateur James Robson. Robson, co-owner of the popular Fallow restaurant, cited high VAT, corporation, and dividend taxes in the UK as disincentives for business risk. He noted that the Gulf actively encourages and assists businesses, contrasting with the UK's "anti-growth taxations."
Several high-profile London establishments, including Scott's, Gymkhana, and Park Chinois, have already opened branches in Dubai, while Isabel's has launched in Abu Dhabi and Bread Ahead bakery has expanded in Dubai. Despite regional conflicts, the emirate continues to attract international culinary ventures.
However, human rights experts, such as Felix Jakens from Amnesty International UK, have raised concerns about potential labor exploitation and inadequate worker protections in the UAE. He highlighted the sponsorship system that ties migrant workers to employers and denies them the right to form trade unions, urging businesses to conduct thorough human rights due diligence.