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How the UAE is promoting opportunities for investors to reach 3 billion consumers

MEDIA / Articles / 2021 / How the UAE is promoting opportunities for investors to reach 3 billion consumers
UAE has become one of the world most dynamic and rapid growing marketplace in the world. In 50 years since the formation of the emirates UAE has transitioned its economy from fishing, pearl and oil trading to tourism, real estate, financial services and logistics and transport.
The emirates have more than 50 free trade zones. These zones are subject to their own set of rules and regulations and are governed by their own authority. These free zones are were established to encourage foreign investors to set up their companies in the UAE by simplifying the startup process and immigration procedures. UAE as among the top performing nationals in 2020 for economic performance and entrepreneurship. Some exemption of free zones are:
  • 100% foreign ownership of the company
  • 100% import and export tax exemption
  • 100% repatriation of profits and capital
  • No corporate and income tax
  • Assistance with labour recruitment
 
Focus on the industrial sector
Given its strategic location, good transport and communication, and logistics infrastructure UAE has become a gateway that reaches almost 5 billion people across the world. More than 5 billion people can fly to UAE within 8 hours.  The country aim is now to promote growth across the industrial value chain. It wants to boost productivity in industries where it is originally well established such as energy, petrochemicals, plastics metals and manufacturing.
Moreover it will grow sectors such as agriculture, and healthcare in this way reducing its reliance and dependence other countries. It will also play a critical role in the growth of industries of the future such as aerospace engineering, hydrogen and medi-tech where 4IR technologies will play a key role. This vision is estimated to enhance the country’s global competitiveness and create more jobs for its citizens and expatriates. As per the ministry of industry and advanced technology comprehensive strategy, “Operation 300 Billion” the UAE is aiming to increase the GDP contribution of the industrial sector from 133 billion to AED 300 billion by 2031. The program is driven by a Unified Industrial Brand Identity under the theme ‘Make it in the Emirates’. The new strategy is in line with the new reality caused by the COVID-1 pandemic.
The strategy will focus on the below elements to achieve its targets:
  1. Updating the industrial laws which involves ownership and foreign investment
  2. Financing through the Emirates Development Bank
  3. Offer competitive gas and energy rates
 
 
 
 
Development of the requisites laws and legislation
UAE has ratified a federal law to regulate and safeguard industrial patents, copyrights and industrial designs. Resolutions and decrees were issued; these clarify the general guidelines for general assemblies, administrative structures and workflow mechanism. A bankruptcy law was adopted which ahieves equality between the claim of debtors and creditors while ensuring the rights of both sides. Under the law debtors are granted a time limit to pay their debts without causing damage to creditors. The development also includes a new amendment to the companies’ law issued in 2020 whereby foreign entrepreneurs are allowed 100% business ownership in mainland companies.
 
Global Competitiveness
As per the IMD World Competitiveness Yearbook 2020, issued by the World Competitiveness Centre of the World Institute for Management Development (IMD). UAE was ranked 9th in the world. It is ahead of countries such as USA, Ireland, Finland and Luxembourg, Germany and UK and the only Arab nation to maintain its rank among the top 10 countries for 4 years in a row.
The World Competitiveness Yearbook (WCY) evaluated 63 countries on 338 KPIs which are spread across 4 parts: economic performance, government efficiency, business efficiency and infrastructure. Each of these 4 factors are further sub-divided into 5 sub-factors. The UAE’s performance in the 4 main factors is as follows:
  • 3rd in government efficiency
  • 4th in economic performance
  • 7th in business efficiency
  • 28th in infrastructure.
The UAE was ranked 1st in 23 indicators. Some of the indicators are:
  • Bureaucracy Absence
  • Immigration Laws
  • Redundancy Costs
  • Low Central Government Foreign Debt
  • Tax Evasion
  • Collected Personal Income Tax (%)
  • Collected Indirect Tax Revenues (%)
  • Real Personal Taxes
  • The percentage of Females in Parliament
  • Labor Force out of the total population
  • Working Hours
  • Competent Senior Managers
  • Industrial Disputes and Foreign Labor Force
  • Dependency Ratio
  • Public-Private Partnership and Environmental Laws.
Another major factor was the contribution of SMEs in which contributed to 62% of the country’s non-oil GDP and employs about 85% of the workforce in the private sector. The UAE has given many incentives to support the setup of SMEs such as low interest rates on loans and low collateral requirements.
The country’s dynamic industrial and advanced technology ecosystem which can propel further growth to the economy gives the nation trust that it will keep on to be seen as an absolute country to invest in because of its attractive business environment, its status a world hub for trade and logistics and its world-class ICT and infrastructure.

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