Over recent years, dynamic and multi-dimensional growth in the UAE has been supported by continuous efforts to boost the business climate, promote investment, while fostering the emergence of an oil-independent and a far diverse private sector.
UAE’s liberal trade regime has helped foreign investment drive growth for many of its industrial sectors, strengthening its hospitality industry, sustaining a resilient tourism sector and further improving its banking provisions across the world. With the dawn of 2018 UAE’s fiscal soundness has been well documented with various economic accomplishments.
2018 – Year of Zayed
2018 for UAE is a special year due to many reasons. One most significantly is because it marks 100 years since the birth of UAE’s founding father, late Shaikh Zayed bin Sultan Al Nahyan. As a symbol of respect, unity, and progress, the year of the Zayed will see historic changes in UAE economy, infrastructure, and tax reforms. The most recent of its changes came from the first day of the year, as VAT (Value Added Tax) officially made its way into UAE at a fixed rate of 5%.
Increased Business Transparency Due to VAT Implementation
The implementation of VAT in UAE represents a major shift in tax reforms, fundamentally changing the way businesses operate in the GCC countries. However, the important aspect of VAT implementation is government warranted transparency that every VAT administered business will exhibit from 1st January onwards. VAT fulfillment will help the financial sector distinguish law-abiding entities from tax evasive companies. As SMEs maintain their financial records, the UAE government will assist companies with easy access to credit facilities from banks and increased the limit to obtain finance, since the turn over is cleanly taxed. According to IMF, the landmark tax law will generate AED 12 billion per annum in state revenues, boosting UAE’s GDP by 1.5 to 2 percent.
UAE to Witness Accelerated Growth
UAE’s accelerated growth over the next 5 years through economic diversification policies will establish it as an important economic and commercial hub in the middle east. The idea is to target key sectors, promoting business innovation, research, advanced practices, environmental awareness and AI technology. UAE’s latest move to create a dedicated AI Ministry is another example of its far-sight plans for the future.
UAE’s fast-track economic diversification schemes have further helped reduce its dependency on crude oil-reserves, thus shielding it from instability in global oil prices. The expansion will strengthen UAE’s tourism, hospitality, and financial services, mitigating any negative impact its oil trade may inflict on the economy in future. The banking sector will also experience an annual credit growth of around 5 percent by the mid of 2018.
To achieve a state of united prosperity, the UAE government is concentrating its efforts to harness the full potential of sustainable energy sources such as solar and wind and retire itself from fossil fuels consumption. The government will oversee eco-friendly projects which will include restoration of clean water sources, promoting the use of green energy and implantation of trees around various locations in UAE.
Dubai on Track to Achieve Vision 2021 Goals
Most importantly, UAE’s ascent in economic stability and public welfare is bringing it closer to its Vision 2021, reinforcing key themes for socio-economic developments and a knowledge-based economy as predicted in 2010.
The program was launched and supervised by Ministry of Cabinet Affairs, focusing on six national indicators in the field of education, health, economy, police and security, housing & infrastructure and government services.
IBGME Consulting in 2018
As a 360° business solution provider in UAE, IBG Middle East has helped countless businesses establish company set-ups across different districts in UAE through complete and affordable packages. Our experience in company incorporation has given us first-hand insight in the business sector, supplying top-tier services in hospitality, financial, legal and immigration sector. With UAE’s new year resolution, IBGME is proactively helping companies register for VAT and prevent unnecessary fines and penalties that could entail. To learn more about our services, visit our website ibgme.ae.