Investors have posed their full confidence in the Dubai economy and have responded positively to the economic initiatives l...
Investors have posed their full confidence in the Dubai economy and have responded positively to the economic initiatives launched by the Dubai government this year to reduce the cost of doing business and facilitate inward investment in the emirate.
The latest data shows that the government measures to facilitate investors and ease the business community yielded positive results as over 25,246 companies benefitted from the initiatives launched by the Department of Economic Development (DED) in Dubai during the past six months, Khaleej Times has learnt.
As per details, 88 new foreign companies were attracted to Dubai; 1,200 firms were exempted from delayed licence renewal fines; and 3,400 companies were exempted from delayed 4,192 fines and violations between April and September 30 this year.
The DED introduced four initiatives on the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai to stimulate competitiveness and achieve sustainable economic development in Dubai.
"These initiatives have established Dubai as a global business destination, opening new and attractive opportunities for sustainable economic growth, supporting productivity and improving the quality of public services," Sami Al Qamzi, director-general of the DED in Dubai, quoted in a local media report.
The government has launched various initiatives to support economic development and facilitate the business community to offset the impact of the global trade war and reduce the cost of doing business in the emirate. The initiatives and benefits are related to exempting businesses from fines and trade violations, reducing operational cost in the retail sector, supporting local production and procurement, as well as attracting the best startups to Dubai and promoting them.
Vikas Papriwal, partner and head of Advisory at KPMG in the Lower Gulf, said that the UAE appears to have made tremendous progress in equipping itself to successfully operate in a post-oil economy.
"This year alone, the government has undertaken several measures to bolster economic stimulus plans by providing relief from corporate fines and fees, thus winning the confidence of the local business community," he said.
He also said that the UAE government's efforts have even been acknowledged by the World Bank in its annual ranking of the ease of doing business, where the UAE ranked 11th. The government has also been lauded for efforts benefiting sectors such as energy, real estate and banking.
"The reforms are strategic steps to make the business environment attractive for local as well as foreign investors and will further boost the competitiveness of the emirates among other regional global economies," he said.
International investments
Dubai Investment Development Agency (Dubai FDI), an agency of the DED, has succeeded in attracting 61 global companies to set up operations in Dubai, as well as in supporting the expansion of 27 startups operating in Dubai, bringing the total number of companies benefiting from the initiative to 88 from 35 countries, according to a report in the local media.
These companies operate in diverse sectors such as digital payment services, manufacturing, design, engineering, renewable energy and ICT. It includes 12 Chinese companies specialising in retail, hospitality and investment; nine Japanese firms engaged in the general trade, food, wholesale, renewable energy, electrical industries and entertainment; and eight US companies in the fields of hospitality, advertising, tourism, education and marble industry.
The DED's services also included the exemption of fines for non-renewal of business licences for more than one year, with 12,600 companies benefiting from this with a value of Dh17.4 million. However, the total exemption value of violations was amounted to Dh39 million by September 30.
Free zones companies
The DED represented by the Business Registration & Licensing sector has also permitted 163 free zone companies to operate in mainland Dubai to enable free zone entities to expand their operations across the emirate, and strengthen Dubai's reputation for attracting investments, promoting entrepreneurship and facilitating business development.
Nearly 34,780 free zone companies in Dubai are expected to benefit from the agreement between DED and the Dubai Free Zones Council, according to the report.
Thaddeus Best, analyst at Moody's Severing Risk Group, said business reforms may aid a turnaround in 2019. He said the UAE is the only GCC country that has a score of 'Very High (+)' for its fiscal strength.
"At the federal level, the UAE announced a number of major reforms including the liberalisation of foreign investment laws which will allow for 100 per cent foreign ownership in certain sectors outside of free-zones, as well as further reforms to the visa system such as new 10-year visas for various classes of investors in addition to selected professions," he said.
"Although full details of the investor visa have yet to be announced, the changes could be supportive to foreign investment in real estate if property is included in the criteria," he added.
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