A growing wave of UK startup founders is relocating to Dubai, driven by mounting frustrations over rising taxes and what many perceive as a diminishing incentive to build businesses in Britain. According to startup lawyers and tax advisors, the exodus from London to the UAE has accelerated over the past six months.
Tom Bohills, founder of dual-location startup law firm Founders Law, says his firm now sees Dubai relocation inquiries in 15–20% of all new business conversations. “We’ve seen an enormous uptick in UK-based tech founders and investors enquiring about moving to Dubai recently,” he said
The surge comes as the UK government, led by the Labour Party since July 2024, attempts to reset relations with the tech sector. Despite promising billions in new funding and visa reforms to ease access to global tech talent, many in the industry say the damage may already be done.
Tax Changes Trigger Move to Lower-Tax Markets
Late last year, UK Chancellor Rachel Reeves introduced sweeping changes to tax policy. The effective tax rate on founder exits rose following cuts to Entrepreneurs’ Relief, with capital gains tax increasing and employer national insurance contributions jumping from 13.8% to 15%.
While some view these tax hikes as necessary to address the UK’s £40bn fiscal gap, many in the startup space argue they stifle ambition. Barney Hussey-Yeo, founder and CEO of fintech startup Cleo, believes the UK is no longer fertile ground for world-class tech ventures. “There is now a ceiling on what the most ambitious founders can achieve here,” he said.
For many, Dubai’s zero income tax and low corporate tax rates (9–15%) offer a more attractive environment to scale their businesses — or at least enjoy greater personal flexibility.
A London-based founder, who requested anonymity, confirmed their family plans to relocate to Dubai soon. “We pay 50% tax and get very little in return. NHS care is poor, private insurance is expensive, and nursery fees make having more than one child financially unreasonable for entrepreneurs.”
They added that friends who have already made the move are thriving, citing a better lifestyle and the ability to build companies from a low-tax base.
The trend extends beyond Dubai. Alex Nicholls of AstroLabs, a firm helping UK businesses expand in the Gulf, noted rising interest in Saudi Arabia, which offers a 30-year corporate tax exemption to firms that set up regional HQs.
Still, Dubai remains the primary destination for now. The city offers a mix of modern infrastructure, business-friendly regulation, and a growing international founder community. Yet, it’s not without its downsides.
Challenges in Dubai’s Startup Ecosystem
Despite Dubai’s appeal, several founders flagged the immaturity of its startup ecosystem, especially when compared to London. “The problem with Dubai is that the VC scene is tiny,” one founder said. Early-stage capital is harder to come by, and network density is thinner, which can slow down growth.
Others continue to run their UK businesses remotely after relocating for personal or tax reasons. Bhavika Nesbitt, tax advisor at Wilson Partners, says most founders “aren’t moving their companies, just themselves.”
In some cases, time zone challenges also arise. Dubai is 11 hours ahead of San Francisco, which poses issues for founders targeting the US market or managing global teams.
The UK government is trying to regain momentum. Prime Minister Keir Starmer has publicly identified the AI sector as a priority, launched a new AI innovation plan, and renewed engagement with tech stakeholders. But sentiment has clearly shifted.
UK startup investment hit just €7.3bn ($7.9bn) in H2 2024, the lowest figure since the start of the pandemic, according to Dealroom data. IPOs are rare, and the London Stock Exchange remains unattractive for high-growth tech firms.
Hussey-Yeo says the government’s direction is “broadly correct,” but its pace is lacking. “It needs to be bolder and move much faster to reverse the managed decline.”
