GOVERNMENT INITIATIVES, EXPO 2020 AND EASE OF DOING BUSINESS WILL DRIVE INVESTMENTS IN DUBAI
- April 27, 2016
- Posted by: RKonnect
- Category: Business & Economy
Dubai economy is expected to sustain the growth momentum in 2016 with estimated GDP growth rate of 4 – 4.5 per cent. The economy will continue to progress at a reasonable rate, attracting foreign investments in the Emirate on the backdrop of rising local & tourist population, strong government initiatives and the development of EXPO 2020 site.
The business environment in Dubai (UAE) is very conducive for investment as the Emirate offers some of the most affluent consumers in the world along with business friendly regulations and zero income tax for businesses and individuals. Due to strong economic growth projected, Dubai could be considered as the most lucrative destination for future investments.
Dubai’s Major Sector
Dubai’s major sector comprises of Services (Hospitality, Logistics, Real Estate, IT & Business), Trade, Construction, Education and Healthcare. With diversification as a major strategy for the Dubai government to sustain economic growth, Dubai is now concentrating to strengthen all its major sectors. The major sectors expected to be a part of this growth story will be Infrastructure, Tourism & Hospitality, Education, Healthcare and Retail.
For 2016, Dubai government allocated AED 16.9 billion ($4.6 billion) of government expenditure towards education, health, housing and infrastructure development. Similarly, Dubai’s dedicated focus towards innovation is expected to open up business opportunities worth more than AED 300 million ($81.6 million) by 2021. Dubai also aims to become the most innovative (Smart) city in the world. This week, Dubai government launched a driverless car (experimentation mode) to rationalise the fuel consumption and encourage the use of smart vehicle in future. By 2030, Dubai government aims to switch 25 per cent of all transportation to smart and driverless cars.
Dubai’s bid to host EXPO 2020 coupled with a steady economic growth and diversifying its business opportunities has positioned itself as an attractive destination for foreign direct investments (FDIs). It is estimated that the mega event will attract FDIs around $150 billion across varied sectors of the economy. Dubai has already attracted FDI worth $7.79 billion in 2014 primarily in the infrastructure and the services industries.
Dubai EXPO 2020 expects to welcome more than 25 million visitors between October 2020 and April 2021 and has already initiated work to add 35,000 hotel rooms to its existing 65,000 hotel rooms. In addition, 96 new hotel projects are also under construction and expected to be ready by 2020. The EXPO 2020 is projected to increase the number of jobs by 275,000 between 2016 and 2021, as Government spending will stimulate economic growth.
Many mega projects like the Dubai South (site of World EXPO 2020), extension of Dubai Metro, Mall of the World (the biggest mall in the world) are already under construction and are expected to be completed before the opening of Dubai EXPO 2020. Thus it can be inferred that EXPO 2020 related construction projects will aid in accomplishing the Dubai’s vision in providing a world class lifestyle to its residents through successful completion of improved retail, transport and infrastructure projects.
Ease of doing business in Dubai
Dubai ranked 22nd in the World Bank’s Influential Doing Business 2015 Index. It moved from the 25th position in the year 2014 as a result of continued economic development apart from the new rules and regulations that improved business environment. The city promises more transparency and better communication within the public and private sectors and is considered as one of the best places to live and work.
The Alliance Business Centres Network for MENA region has ranked Dubai among the best centres for corporate expansion globally whereas PwC named Dubai as the Global ‘City of Opportunity’ as it ranked (5th) for global affordability, cost of living and purchasing power. The Economist Intelligence Unit ranked Dubai the (3rd) most improved cities to live over the past five years, as it has shown improvement in terms of offering better quality of life and advancement opportunities.
Favourable policies in Dubai free zones such as complete ownership and exemption of taxes have been crucial in making the process easier for setting up business in the region.
Why invest in Dubai?
Dubai’s strategic location-connecting east with the west coupled with a strong leadership, innovative and long-term strategy with a positive and diversified economy makes Dubai the ideal place for investment. The rise in Dubai population (2.49 Million in 2016 – expected 3.5 Million by 2020) and growth in tourism (4th popular global tourist destination) has made it all the more obvious for Dubai to take the center stage of foreign investments.
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