Despite being one of the younger nations in the World, UAE has quickly transformed from a colonized desert oasis, into a global economic powerhouse and a location of choice for international companies. Pro-business policies, world-class infrastructure, and tax-free benefits have established UAE as a leading investment frontier in the world.
A firm real estate market, healthy BOP, positively contributing oil sector, rising tourism and hospitality industry are prominent reasons why UAE is the perfect setting to invest in 2018. Here are 5 signs no investor can ignore.
With a constructive outlook for 2018, the UAE’s economic schemes have already kicked off. After recovering from the impact of oil prices, the UAE has hastened its efforts for economic diversification schemes, already contributing to almost 80% of GDP from the non-oil sector.
Following its vision 2021, the UAE is pursuing its national innovation strategy that focuses on key sectors of the economy. The strategy promotes its major industries such as trade, manufacturing, media, hospitality, tourism and financial services to expand and grow, building a sustainable future outside of the oil sector and neutralizing any volatility in the global crude oil market.
Another prominent theme of UAE’s economic diversification strategy is renewable and clean energy that will help to reduce consumption of fossil fuels, gradually decreasing UAE’s carbon footprint. Following the recent improvements in UAE’s economy, the banking sector will witness an annual credit growth, recovering from 1.7% at end-2017 to about 5% in 2018.
The non-oil sector growth is projected to rise from 1.9 percent this year to 2.8 percent next year, and to continue climbing to between 3.3 and 3.5 percent in 2020.
UAE’s trade sector contributes heavily to the employment generation, industrial output, and foreign exchange earnings.
This year, UAE will organize over 87 trade fairs and exhibitions surrounding various spheres of economic diversity as an impetus to encourage entrepreneurs, SMEs, and Large enterprises to invest. The government is also concentrating its efforts to promote Free zone incorporation in its various jurisdictions whether its Creative City, DMCC, SHAMS or RAK free zone company set up to encourage the private sector.
To improve logistical support, new airports will be inaugurated for greater capacity and exchange of air freight in convenient locations around the country. Through a spate of technological advancements and administrative enhancements such as the AI ministry launched in the 4th quarter of 2017, a brisk development in the services sector will be expected as digital self-aware systems get introduced for the first time.
UAE’s real estate market is still resilient as ever, declaring the most valued property in the Middle East region. Despite the recent years of economic slowdown, rising dollar, and regional uncertainty, the UAE property market has remained impervious to slumps, inviting more investors year by year to purchase real estate.
According to data obtained from Dubai Land Department, the first half of 2017 experienced a 13% increase in the sale of completed properties in Dubai, from 6,100 last to a record 6,900. This stemmed a marginal increase in residential sale prices for 2018, further augmenting the appeal of UAE’s real estate sector.
2018’s mega projects, featuring elegant office domains, luxury apartments, recreational facilities and entertainment centers have significantly boosted UAE’s property market above its project mark.
Through a robust pipeline of hotels, business centers, residential and luxury living construction projects, UAE’s tourism and hospitality KPIs are also expected to be an all-time high for 2018.
With the World Expo 2020 just around the corner, followed by FIFA World Cup 2022, the year 2018 will be highly eventful with no less than 83 new hotels set to open and cater UAE’s massive hotel room demand.
UAE’s hospitality industry forecast for 2018 reveals a 5.3% growth rate with revenues expected to reach $9.81 billion by the year 2020, ranking it on the 2nd spot on the most highly visited counties in the Middle East.
New tourist attractions, large-scale international events, and an expanding MICE market are anticipated to increase tourist arrivals in 2018 by two-fold. The emirate RAK alone is targeting over a million visitors by 2018.
UAE’s recent initiatives to boost the tourism sector include
With VAT finally implemented, businesses across GCC countries will be taxed at a fixed rate of 5%, helping UAE to bolster approximately AED 12 billion in state revenues by 2018. While giving consumers a robust incentive to earn, encouraging savings and prevent recklessly spending, the new tax reform will also help in boosting the transparency in the business world, especially in the SME sector.
VAT will establish a foolproof system to help law-abiding businesses benefit from credit facilities, increasing limits on bank financing, and maintaining a clean fiscal sheet. Businesses that fail to register or evade taxation will be penalized by the UAE government, thus helping seal financial leakages and enforcing government writ on rogue companies.
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