UAE GOVERNMENT INITIATIVES TO BOOST INVESTOR CONFIDENCE STIMULATE BUSINESS GROWTH
UAE’s decision to offer 100% ownership to foreign companies, 10 years Visa Rule to investors / knowledge specialists, unveiling of $13.6 billion economic package and slashing of government fees aims to improve ease of doing business, stimulate business growth and boost foreign direct investment in the country.
In one of the most spectacular decision, UAE has decided to offer 10 years Visa Rule to investors and knowledge specialist and 100 per cent ownership to foreign companies. The ten years VISA rule for investors and knowledge specialists will play a major role in pulling high caliber talents from the world attracting engineers, doctors, innovators, scientists, and other knowledge specialists in the times to come. In the times ahead, UAE plans to become a knowledge economy with high focus on higher education, innovation, and dissemination of quality knowledge.
Abu Dhabi $13.6 Billion Economic Stimulus Package
Abu Dhabi government announced a massive Dh 50 billion (USD $13.6 bn) package to boost the economy while Dubai announced series of new initiatives to boost investor confidence and ease pressures both on businessmen and Dubai residents. As a part of the plan, Abu Dhabi intends to create near around 10,000 jobs in public and private sector in next five years while exempting all new licenses from the need of physical office or workspace for two years.
Dubai Slashes Government Fees, Exempts Administrative Fines to Boost Economic Growth
Dubai government approved a stimulus plan by slashing aviation, real estate and hotel fees in order to enhance emirate’s competitiveness and its status as a major international tourist destination. As many as 19 fees related to aviation industry will be scrapped apart from reduction in market fees imposed by Dubai Municipality (from 5% to 2.5%) and waiving of 4% fee on property owners who fail to register real estate transactions within 60 days. On similar lines, hotel fees on sale value or hotel facilities / restaurants will be reduced from 10% to 7%.
In another initiative, both Abu Dhabi and Dubai government announced exemptions on administrative fines for at least the rest of the year to provide relief to existing businesses in UAE and stimulate business growth in the country.
UAE Key Economic Initiatives – 2018
- 10 Year Visa Rule Announcement for Investors & Knowledge Experts
- 100% Ownership for Foreign Companies (Business Owners, Entrepreneurs & Investors)
- US $50 Bn Economic Stimulus Package by Abu Dhabi Government
- Reducing Government Fees related to Aviation, Real Estate & Hotel Industry
- Exempting Administrative Fines for existing Businesses in UAE (Dubai & Abu Dhabi)
Impact of Key Government Initiatives on UAE Economy
The new decisions by the government are heralded as a revolutionary one, as it has the potential to attract unprecedented amount of investment and talent into UAE’s burgeoning economy. Numerous international trade consuls such as German, British, China, and others have welcomed the decision and said it can be a major game changer in the times ahead. There has also been a spurt in social media activities, as netizens have also welcomed the landmark decision with open arms.
Overview on Foreign Direct Investment in UAE
UAE is currently standing at an interesting junction of its economic trajectory with the World Bank ranking UAE 20th out of 190 countries in the 2018 Doing Business. The country has received over USD $11 billion in FDI in 2017 and is making strong progress towards building a robust and sustainable economy underpinned by larger investments into non-oil sectors.
Currently the non-oil GDP of the country is growing at the rate of around 3 per cent with sectors including but not limited to education, e-Commerce, healthcare, medical tourism, wellness, sustainable energy and IT & innovation emerging as high growth and potential sectors. As investment inflow will accelerate after the new VISA rule and series of other initiatives, it will be a major force in bridging the gap towards helping UAE realizes its long-term economic vision.
UAE – An Attractive Investment Destination
UAE has always been an investment friendly destination, even after the introduction of Value Added Tax (VAT), which compared other countries, is still minimal. Likewise, its attractive investment environment has been instrumental in its economic diversification. Today over 200 nationalities live in the country. It is the most preferred destination for international companies that are looking to tap into the MENA economy and wider regional economy that includes Africa and South Asia.
UAE has also developed world-class infrastructure in the form top quality airports, hotels, public facilities, and economic zones, which furthers its evolution as an international business destination. A robust existing framework in conjunction with such attractive rules can add a lot of value to the economic growth of the country.
The country is well positioned to become a knowledge hub in the Middle East and North Africa (MENA) region. It has strategically invested in world-class universities and innovation institutes. It has also developed dedicated economic zones for knowledge economy, design, creativity, innovative start-ups, and technological research. An attractive scheme to bring talent will be a shot in arm in its endeavors to become the epicenter of knowledge in the region. Following the rule, it is expected that more international entrepreneurs will come to UAE to leverage its upcoming infrastructure and favorable business environment to do business.
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