Why more startup founders are moving to the Gulf

TL;DR: Founders of startups are increasingly moving away from Europe, Asia, Africa, and North America to the Gulf . The major draw factors are tax-free salaries, complete foreign ownership, and long-term residency

Government-facilitated accelerators, incubators, and sovereign funding provide a speedy route to expansion. Infrastructure, security, and family-friendly settings render the area attractive for founders and staff. Drawbacks are the cost of living, quotas for hiring, and changing regulatory landscapes but the push goes on.


A Shift in Entrepreneurial Gravity

Historically, would-be entrepreneurs flocked to the comfort of well-known centres such as Silicon Valley or London. But more and more, they're flocking to Gulf cities instead, including Dubai, Abu Dhabi, Riyadh, Manama, and Doha. It's no coincidence that this is happening, it's the result of a deliberately crafted makeover of the Gulf as a global startup corridor.


What's Drawing Founders There?

• Business‑Friendly Tax and Regulatory Environment: The Gulf has no personal income tax, good corporate tax regimes, and complete foreign ownership across most sectors. Free zones and accelerator zones make setup, banking, and licensing easy.

• Long‑Term Residency Without Employer Ties: Initiatives such as the UAE Golden Visa and Saudi Premium Residency enable founders to remain for years, even decades without typical sponsorships.

• Access to Capital and Sovereign Support: VC firms such as BECO Capital, STV, and Shorooq, along with sovereign initiatives like Saudi’s SVC and ADGM’s innovation hub, are powering a rising investment wave. Founders now have direct access to capital and launchpad grants, especially in deep tech and climate tech.

• Regional Launchpads and Scale-Up Potential: With strong infrastructure, Gulf-based startups can easily expand into Africa, South Asia, and Europe via nearby flights. This proximity and market access are hard to replicate elsewhere.

• Hands-On Government Engagement: Gulf governments are not mere regulators; they are ecosystem enablers. Hub71 in Abu Dhabi, Monsha’at in Saudi Arabia, Qatar’s Digital Valley, and Bahrain’s incubators offer subsidised housing, workspaces, mentoring, and funding assistance.

• Secure, High‑Standard Lifestyle for Founders and Families: Most founders point to robust infrastructure, security, education, and multi-cultural society. According to one founder, it took only weeks to establish in Dubai with minimal red tape and great quality of life conditions.

Who's Moving and Why Does It Matter?

Founder migration is in waves. Asians, Africans, and Middle Easterners are moving in large numbers to grow regionally. Western tech entrepreneurs, particularly in climate tech or AI, view the Gulf's mega-projects (such as NEOM) as fertile ground to pilot and apply their solutions.

To illustrate, many Indian startup groups have relocated to Dubai, attracted by ease of establishment, closeness to market, and facilitative policy environment. Dubai Chambers consequently registered more than 12,000 new non-Emirati businesses in 2024 alone.

Egyptian startups faced with internal economic challenges such as a currency crash and legal ambiguity are also migrating to Saudi Arabia, attracted to stability and certainty of the Gulf's frameworks.

Fintech, healthtech, AI, logistics, climate-tech, and edtech founders get the most spotlight and favor. Gulf governments are coordinating startup targeting with national development plans and giga-projects.


Real Challenges Ahead
The benefits bring realities:

• High cost of living, particularly in high-end regions
• Hiring quotas and nationalisation policies (e.g., Saudization) that may impact team makeup
• Regulatory complexity in areas such as healthcare, crypto, or fintech, simplified but not necessarily straightforward
• Investor restraint in initial phases beyond UAE and KSA

Founders have to balance these considerations, but most tolerate the compromises for access to capital, residence, and scale.

Scaling Through Coherence
The startup ecosystem in the Gulf is transforming through ordered specialisation:

• Dubai and Abu Dhabi are emerging as fintech and AI hubs
• Riyadh is backing industrial, digital infrastructure and deep tech entrepreneurs
• Qatar is leveraging its FIFA and Expo legacies in sport-tech and mobility solutions
• Bahrain is sowing fintech and regtech innovation, frequently piloting from its less burdensome regulatory regime

This collaborative strategy forms a cohesive regional corridor and provides founders with multiple points of entry tied to sector strength.


A Region in the Middle of a Transformation

Even with global investment slowdowns, the Gulf's startup economy is on the rise. The region's entrepreneurial pace is supported by sovereign capital, strategic intent, and a coherent ecosystem blueprint according to the 2025 Global Startup Ecosystem Report.
Whether you're an emerging founder, tech investor, or policy nerd, it is evident that the Gulf is no longer a fringe participant, it's at the centre of the global startup narrative.


FAQs

Q. What is driving startup founders to move to the Gulf?
They are attracted by low or zero taxes, quick and agile company formation, venture funding access, long-term residency opportunities, and strategic access to growth markets in Africa, South Asia, and Central Asia.

Q. Which nations are driving this movement?
The UAE and Saudi Arabia are currently leading in securing founders. Bahrain and Qatar also have active startup hubs through less regulation and focused sectoral approach.

Q. What type of assistance do governments provide to startups?
From subsidised office space to founder grants and innovation hubs like Hub71 (UAE) and Monsha'at (Saudi), governments actively assist founders in scaling up their businesses at pace.

Q. Which are some of the priority areas being targeted by Gulf countries?
Fintech, AI, healthtech, climate-tech, logistics, and edtech are some of the priority areas. Startups linked to sustainability objectives and smart infrastructure are being supported the most.