Ras Al Khaimah Free Trade Zone Delegation Visits the USA to Present UAE Investment Opportunities

An assigned team from Ras Al Khaimah Free Trade Zone (RAK FTZ) ,the second largest Free Zone within the United Arab Emirate (UAE), is visiting the west and south of United States of America (USA) with the intention of tightening their already existing relations, create new grounds for relations and to present USA companies with new and innovative investment opportunities.

The RAK FTZ delegation team is led by the emirates CEO, Peter Fort who has his schedule booked throughout his visit to the USA. The delegation has arranged face-to-face meetings in Los Angeles where the team will meet and present investment opportunities to private companies, industry organizations and chambers of commerce in an throughout the regions of Dallas, Los Angeles and Houston. More than 500 USA-based companies have already set up operations in the free zone and thus, the delegation team aims to build on the already established foundation.

Ras Al Khaimah is amongst the seven emirate cities that make up the UAE, alongside with other great emirate cities like Abu Dhabi and Dubai. the UAE has developed into a international hub attracting foreing investment because of the country’s business-friendly environment, beneficial tax-regime, efficient economic policies and political constancy and stability.  Ras Al Khaimah’s free zone offers foreign investors a stable and safe haven-like environment where they can set up businesses and expand. Opportunities are available to all forms of companies ranging from SMEs to global mega-companies. Once more, RAK FTZ ideal geographical position offers prospective investors easy access to numerous countries across the MENA, South Asia and Europe of course.

For over a decade now RAK FTZ has developed into a lucrative and cost-efficient haven attracting rapidly expanding regional and international markets. At present, the free zone is the home to more than 8 thousand companies originating from more than 100 countries. The companies are engaged in more than 50 industries.

as the other emirate free zone, RAK FTZ offers a plethora of benefits to its clients such as 100% foreign ownership, top-notch and already established facilities. However, the RAK FTZ differs from the other emirates in the respect that its required costs are significantly lower, offering clients and investors to obtain the maximum return on their investment. RAK FTZ free zone allows clients to set up their businesses very easily within the UAE, offering quick and simple procedures in order to get a business license, register, worker and investor visa, freedom to hire employees locally and internationally and continuous business support services. Each business’ needs and requirements are met completely. RAK FTZ provides clients top-notch business facilities, office spaces, warehouse space as well as land for lease in any of the four free zone parks in the free zone.

The two parties, UAE and USA, have long formed a partnership and both benefit from their continuous trade and investment relations which have risen significantly the last few years. According to the delegation team, UAE has created one of the strongest economies in the world and thus offers USA businesses, companies, businesspeople related in the service, trading, manufacturing and educational sectors the opportunity to expand within the Middle East, Africa and South Asia.

Among the top ten USA states in terms of UAE exports are California and Texas. The UAE is confident that this fact will further highlight RAK FTZ strategic development and accentuate the free zone’s dedication towards the largest economy of the world-the USA. The overall international shift concerning typical trade patterns alongside with the increase of status marked by the southern region that links the MENA and China, has further strengthened the UAE’s geographical importance as well as highlighting Ras Al Khaimah as the best home to businesses and corporations that are presently leading the market and will do so in the future.

The delegation team intends to present potential USA investors with an efficient and detailed illustration of the benefits offered and set up business opportunities available and offered by the RAK

UAE Shines among Gulf Cooperation Council countries (GCC)

The United Arab Emirate stick out from all the countries included in the Gulf Cooperation Council as the country that is most capable to deal with troubles that may arise in the future due to the sharp drop of oil prices because of the economy’s diversity and strong buffers.

According to recent reports concerning the impact of oil prices, the UAE’s foreign and financial position will be manageable due to the country’s account surplus (12.3%) and high GDP (6.8%).

Due to the UAE’s diverse economy and resources, the country have managed to maintain its external oil price at approximately $64 per barrel-according to its 2.6 Million Barrels Per Day (mbpd) during 2014, although its financial oil price has decreased steadily during the last three years from $93/bbl to $79/bbl

The diversification of the economy and the composition of its resource base have allowed the UAE to keep its external breakeven oil price around $64 per barrel, based on exports of 2.6 mbpd in 2014, while its fiscal breakeven oil price has fallen from $93/bbl to $79/bbl over the past three years.

Therefore, on the basis that UAE’s oil exports remain steady over the next year or so, it is predicted that the UAE will maintain its large account surplus as long as the price of oil does not drop below $64/bbl.

Due to the UAE’s continuous efforts to broaden its economic sectors and structure as well as expand its non-hydrocarbon dependent sectors, its economy has grown considerably.

The GCC countries face challenges due to the drop of oil prices because their diversification of export and financial revenue sources are limited, thus their economies extremely depend of the price of oil. Nonetheless, the UAE is the exception, as it is the best equipped among the GCC to face the drop of oil prices and the most competent when it comes to adapting its economy to the changes occurring in the international oil market.

Although the UAE’s bank sector liquidity may be influenced, the country’s Loan Deposit Ratio (LDR) remains well below 100%, its government support as well as the corporate sector’s deleverage schemes will further aid.

The non-hydrocarbon sector contribution to the UAE’s general GDP has increased immensely during 2000-2003, from 44.7% to 61.1%. The government’s efforts to diversify its economy and promote non-dependent hydrocarbon sectors has paid off and helped in increasing the UAE’s non-oil GDP. After a climatic rise in 2009, where non-oil GDP reaches 30.6%, the rate dropped by 2013 to 25.3%. Although the non-oil GDP remains high, when compared to the 56.6% non-oil GDP in Saudi Arabia, the public sector’s lessening efforts to enhance the UAE’s activity within the economy is highlighted.

The UAE’s decreases focus and dependency on oil is mirrored by the increase in the country’s exports and financial revenues not attributed to oil-related activity and sector. This fact is especially highlighted by the increased investment income generated from net foreign assets as well as the significant non-oil exports of both goods and services, especially evident in Dubai. 

On a financial note, it is anticipated that Abu Dhabi will restrict its spending by cutting subsidies and re-examining investment projects as well as reducing the amount of funds the city loans its neighboring countries. In this way, the UAE’s combined budget will be maintained at a surplus of 6.1% of GDP in 2014 and 5.4% of GDP in 2015.

It is evident that UAE’s financial competency has strengthened and its buffers have been boosted incredibly. The UAE’s gathering of great foreign and financial surpluses over the last 10 years as well as the government’s management of the country’s net foreign assets have aided to boost its foreign exchange reserves located in the Central Bank as well as enhance Abu Dhabi’s Sovereign Wealth Fund (ADIA) to approximately 120% of the country’s GDP.

The nation’s public debt is lower than 12% of its overall GDP, thus allowing the UAE to obtain further financial help if required. The UAE’s banking sector is in the position to help the UAE’s economy grow, regardless of the drop in oil prices. The bank sector’s improved performance reflects their strength and ability to help the UAE’s growth. 

Dubai is anticipated to grow at a faster rate than Global economy

It is anticipated that Dubai’s economy will experience an increase in growth during the following year, which percentage is higher than the international increase projected which stood at 3.5%. Dubai’s government and private sector will strengthen and generate more growing in the following years. 

Dubai is confident that its strong and efficient infrastructure will keep it competitive in the coming years. On that note, Dubai is also aware of the general instability evident in other international markets, but is ready to face any challenges that may occur. Dubai is convinced that it will avoid any budget shortage.

Additionally, it is anticipated that the United Arab Emirate (UAE) economy will also mark an increase in growth of 4.5% during the following year. The growth forecast is considered as a great sign when taking into consideration the instability and volatility present in other international markets.

During the next year, Dubai aims to restrict inflation in order to remain competitive as well as to maintain consumers’ spending on high levels. According to statistics, Dubai’s inflation rate climbed to 4.4% during October 2014, the highest inflation rate since May 2009, when the crisis hit Dubai. Fortunately, the rate dropped to 4.2% in November 2014, and Dubai is hopeful inflation will remain stable.

Dubai’s GDP rate also marked an impressive increase reaching 4.6% during the previous year. It is anticipated that Dubai’s GDP will increase by 4% during the following year mainly due to its diverse economy.

Dubai is confident all its sectors in general will experience growth-including its real estate, manufacturing, trade and services sectors. It is anticipated that Dubai’s economy will again increase by a higher rate than global growth because of Dubai’s economic diversification.  Although, international markets are facing instability and great unpredictability in their markets, Dubai is certain it will not be influenced negatively but is alert to face any challenges that may come up.

Furthermore, although the decline in the oil of prices will not affect the emirate on the short-run, if the prices continue to drop, Dubai’s economy will be affected in the long-run. According to projections, Dubai’s spending will remain stable throughout 2015 and changes to spending patterns may change during 2016.

It is also anticipated that households in Dubai will restrict their spending during 2015 as a result of the decrease of oil prices that may influence the amount of income they receive. 

Nevertheless, Due is confident that during 2015 the emirate will continue to grow due to its strong ability to adapt easily as well as being an international trade hub.  

UAE Ranked among the Most Developed Countries Internationally

The Most Recent World Economic Forum Report

According to the World Economic Forum’s World Competitiveness Report 2014-2015, issued during September, the United Arab Emirate (UAE) moved up seven places in the economic competitiveness ranking in comparison to the previous year. The most recent report shows that the 

UAE has been ranked in 12^th position, above countries like Canada, South Korea, Denmark and other leading economic markets, outranking them in several indicators.

In accordance to the report which examined an overall of 144 countries, the UAE’s has improved drastically in 78 out of the 114 indicators in only one year.

Ranked in Second Position-Attracting Investment

In line with the 2014 United Nations Conference on Trade and Development (UNCTAD) report, the UAE scored second position internationally in terms of attracting and receiving investments from foreign sources. The report outlined that for four consecutive years the UAE has marked continuous flows of investments. During 2013, the UAE overall received $10.5 billion dollars of foreign investments. This inflow in investments coincides with the UAE’s efforts to overcome its economic troubles since 2009. The UAE has been trying to overcome the crisis that hit it by developing both its oil and non-oil industries by expanding and maintaining development in the non-oil industry particularly in manufacturing of aluminium and petrochemicals but also the tourism and aviation industries.

The UNCTAD report positioned the UAE in first and 13^th position in the Middle East and international scope respectively, as the most attractive destination concerning investors during 2013-2015. The World Forum for Foreign Direct Investment 2013 report outlined that the UAE received a total of Dh36.7 billion direct foreign investments by the end of 2012 whereas it marked a total of to Dh28.14 billion in 2013 recording a percentage growth of 31.5% in total. According to the latter report, the UAE came 2^nd amongst the Arab world concerning attracting foreign direct investments as well as ranking 3^rd in West Asia where its total foreign investments amounted to $47bn.

According to the UNCTAD foreign investment report for 2013 the UAE collected approximately Dh202.1bn of foreign direct investments whereas UAE investments abroad amounted to about Dh146bn during 2007-2012 respectively.

What’s more the Kuwait-based Arab Investment and Export Credit Guarantee Corporation (DHAMAN), also established that the UAE was positioned 1^st throughout the Arab countries, regarding its attractiveness for foreign direct investments during the previous year.

UNCTAD statistics revealed that 92 in total foreign and Arab countries had received a flow of investments amounting to US$ 300 billion in total during the decade of 2002-2012 each year. Amongst the countries receiving the most inflow of investments were the USA, the UAE, the UK, Saudi Arabia, Japan, the Netherlands, Germany, Kuwait, France and China.

The UAE came 1^st amongst the Arab countries during the 2002-April 2014 with total investments reaching $217b.

The UAE has been ranked amongst the top countries in terms of attracting foreign direct investments mirroring the beneficial policies it has enforced and adopted since it was established many years ago. In regards to the International Institute for Management Development 2013 report, statistics rank the UAE 4^th and 1^st internationally and in the Middle East respectively, in the openness to the world index and positively benefiting from international globalisation. The specific report ranked Ireland in first place whereas the UAE came before many developed countries. In accordance to the World Index, Ireland was positioned first, acquiring 8.15 points, which was followed by Hong Kong, the UAE and Malaysia each obtaining 8.08, 7.82, 7.8 points respectively.

The UAE established a leading ranking on its economy

During 2014, international indicators and reports have revealed that the UAE has been ranked amongst leading countries in terms of its competitive economic capabilities.

In comparison to the previous year’s World Bank report regarding ease of doing business, the UAE moved three positions upwards, to 22^nd position internationally, while maintaining first position throughout the Arab world.

Likewise, in the Financial Stability report, issued by International Monetary fund in October 2014, outlined that the UAE would sustain a surplus concerning its state budget for the following 6 years (2014-2019). The estimated rates fluctuated between 6.9% to 10.5% regarding GDP. Similarly, IMF’s report regarding exports, ranked the UAE as one of the top 20 exporters in the world. the IMF report also claimed that the UAE’s exports, both services and goods, would amount to Dh1.47 trillion by the end of 2014 and that by 2015 the country’s exports would rise to Dh1.59 trillion. It was also predicted that by 2018 the UAE’s exports would soar to approximately Dh2trillion.

Furthermore, the Index of economic Freedom 2014, conducted by the credited Fraser institution, placed the UAE amongst the top ten countries. The index ranked the UAE first throughout the MENA region and in 6^th position internationally.

In accordance to the Global Enabling Report, the UAE came first throughout the MENA and was ranked 16^th on the international level, rising three positions when contrasted with the 2012 ranking. The Global Enabling Trade Report uses four features consisting of nine pillars, when categorising and ranking countries. These indicators include a county’s border management, accessibility to their market, infrastructure and communications. Out of the 135 countries which were examined, the UAE ranked 13^th internationally under the business environment category.

According to the International Institute for Management Development’s report in Switzerland, the UAE came ranked first and sixth among the Arab world and on the international scope respectively concerning the Economic Elasticity Index.

According to IIMD’s World Competitiveness Centre Lausanne-based report, the Global Competitiveness 2014, the UAE was placed first throughout the Arab and Middle Eastern nations for the secong consecutive year. The UAE also came fourth internationally concerning the image it projects as a business-friendly environment. The report especially highlighted the UAE’s economic flexibility, the opportunities it offers in the business sector and its overall development. 

MoF holds a Tax Treaty Workshop

MoF holds a Tax Treaty Workshop about Base Erosion and Profit Shifting (BEPS)

The Ministry of Finance (MoF) in collaboration with the Organization for Economic Cooperation and Development (OECD) organized the Tax Treaty Workshop.

On December 8, 2014, a Tax Treaty Workshop was held in Dubai, which was hosted by the MoF. The workshop intended to reconfirm the MoF’s commitment in cooperating closely with both regional and international partners. The workshop was co-hosted by the OECD and was named ‘Taking tax treaty work related to BEPS forward.’

The workshop covered a range of important issues. Some of these topics included a legal and logistic study of the process linked with creating introducing new tax treaties, the challenges entailed in e-commerce, BEPS discussions, the crediting of profits to establishments, manners in which to improve exchanging information amongst countries as well as OECD models concerning tax treaties and modifications and explanations about memorandums. The workshop that was held is the eighth in total that has been co-organized by the MoF and OECD.

Besides MoF employees, representatives around the world including Bahrain, Kuwait, Bermuda, Romania, Kosovo, Sri Lanka, Saudi Arabia, Oman, Nigeria, Malta, Cameroon and Sudan attended the workshop. Additionally, local UAE entities also were present at the workshop including representatives from the UAE Central Bank, UAE Free Zones, UAE Ministry of Foreign Affairs, and various finance departments, the Emirates and the Abu Dhabi National Energy Company (TAQA) and Etihad Airways.

Since 1987, the UAE has created a large tax treaty network with multiple trading partners throughout the world. At present, it has established 78 tax treaty agreements. Its immense experience in the field has helped the MoF to obtain logistical and legal expertise concerning closing agreements and conforming to all the necessary requirements. 

Dubai World aims to reorganize Debt

During the following week Dubai has scheduled restructure its loan repayments. Dubai World, the emirate’s largest state-owned company, made the loan. Dubai intends to extend the repayment period by taking advantage of the fact its economy is constantly growing.

In 2011, state-owned Dubai World agreed on a $25 billion restructuring agreement. The company now aims to the repayment of $10.5 billion, which was initially due for 2018 due to the fact Dubai is planning to invest in its aviation sector in order to accommodate and prepare for the World Expo 2020. The mega-company will present its proposals to creditors during the first ten days of December 2014 in London and Dubai.

Dubai World intends to repay a $4.5 billion installment, initially due in 2015 while negotiating the possibility to extend the 2018 installment to 2022. In order to assure creditors apprehensions, Dubai World will propose better or higher interest rates and extra fees.

The main lenders, including HSBC, Standard Chartered, Abu Dhabi Commercial Bank and NBD have all agreed to the new proposal and the main terms outlined in the agreement.  Nonetheless, Dubai World is still required to convince many more creditors to agree on restructuring the 2018 deadline agreement. The majority of banks (creditors) asked for higher fees and interest rates in order to agree on the extension.

Bankers believe the majority of lenders will respond positively to the new proposal due to Dubai’s economic prosperity and prospects for the future. They also argue that the finalized agreement is both fair and reasonable. On the other hand, some may not agree, influenced by Dubai’s debt crisis a few years ago. They may view Dubai is attempting to avoid repaying the amount due in 2018.

However, DP World purchased Jebel Ali Free Zone Logistics Park, which as all know, is Dubai’s port operator. The amount Dubai World received from the sale is more than enough the emirate needs to repay the 2015 installment in advance.

Dubai World needs the consent of creditors obtaining three-quarters of the loan value in order for its proposal to comply with UK legislation. However, Dubai is able to pressure for their proposal to be approved by securing the approval of two-thirds of the creditors at the Dubai World Tribunal. Dubai World Tribunal is a legal committee that was founded after the debt crisis in 2006.

Dubai’s services sector has grown excessively due to increased trade, tourism and transportation. Dubai is still in debt, owing approximately $120 billion, but experts are optimistic the emirate will repay the debt without any trouble.

Due to the fact Dubai plans to invest excessively in its domestic infrastructure and mega-projects, it will have to ask for more funds from banks and other capital markets. Dubai intends to invest in its aviation sector, by enlarging its second airport AI Maktoum and estimates the project will amount to approximately $32 billion. 

World Economic Forum on the Global Agenda meet begins in Dubai

The seventh consecutive World Economic Forum (WEF) meeting concerning Global Agenda is being held in Dubai. Its purpose is to reproduce the triumphant innovations implemented in the United Arab Emirates (UAE) on an international scope.

The WEF praised the prime minister and vice president of the UAE who is also Dubai’s ruler, Sheikh Mohammad bin Rashid Al Maktoum for understanding that the most important factor contributing to transformation is innovation. The WEF explained that innovation today would be achieved by running efficient institutions, implementing important policies, acquiring expert and specialized skills and an effective economy where all parts collaborate to explore new ways to do business. A creative and open economy, which is based on cultural innovation, is the most rapid and prolonged way to enhance the UAE’s competitiveness on an international level.

The three-day meeting was attended by more than one thousand people, which amongst them were country leaders and pioneering business executives from all corners of the world.

Discussions will address more than eighty issues concerning the world and possible solutions to these issues will be suggested. The theme of the meet has been named UAE Brainstorms for the World.

The WEF stated that has successfully created a developed and growing economy due to the approaches and policies it has implemented in the country. The approaches adopted by the UAE posed as effective when trying to battle with challenges faced internationally, and successful in redefining the globe’s development plans.

The meeting was held at a significant period of time, when the entire world needs to battle and solve issues that arise like humanitarian, health, unemployment, food, poverty and extremism, lack of recourses and energy problems.

As a result, of growth and development projects within the Gulf region, the Middle Eastern countries have also benefited by attracting attention by potential investors and generally, the world. The WEF outlined that by cooperating with the UAE and adopting approaches to grow, would be crucial in finding solutions to important issues and redefining development throughout all economies of the world.

The fact that the summit was held in Dubai further accentuates the fact that the city supports and is committed to solving international challenges and issues. Dubai, like most of the emirates, has vigorously embraced and introduced different ways to enhance innovation within the city. One of its best decisions Dubai has taken is to hold the Dubai Government 2012 Initiative. The Dubai Government 2012 was organized to implement technology in people’s daily lives.

Through the Dubai Government 2012 Initiative, the state has successfully created a new link between customers and the government, supplying customer relations using a corporate manner as well as establishing Dubai as the most technologically advanced city in the world through adopting one hundred initiatives and more than one thousand tech-related services.

The meeting lasted till the 11 November, and it focused on multiple topics that are presently relevant like renewable energy, climate change, energy security, entertainment, media, infrastructure, internet security, innovation approaches and property. During the meeting the participants also addressed other critical matters like health, humanitarian issues, refugee issues, extremities and other such significant topics that the world is facing currently.

The solutions and results that have been decided upon will be brought forward in Davos at the World Economic Forum. 

Source: http://www.lowtax.net/blogs/World-Economic-Forum-on-the-Global-Agenda-meet-begins-in-Dubai-572332.html

Aviation Sector contributes largely to Dubai’s economy

Aviation Sector contributes largely to Dubai’s economy: 37.5 percent to its GDP and will support over 750,000 work positions by 2020

The United Arab Emirates (UAE) aviation sector, including Emirates Airline and Dubai Airports, contributed a total of $26.7 billion to Dubai’s economy during the previous year. The contribution amounted to 27% of Dubai’s GDP as a whole. Additionally the aviation sector offered 416,500 jobs equal to the 21% of total employment in Dubai.

These records were based on a report conducted by Oxford Economics, an international research company, which publicized the figures in its most recent report, Quantifying the Economic Impact of Aviation in Dubai. The same company conducted the same research in 2011.

The purpose of the report was to measure and calculate the extent in which the aviation sector influences the economy and Dubai-based related companies. The report outlines the beneficial influences Dubai’s economy has enjoyed during 2013 concerning Gross Value Added (GVA) and employment rate. The report also examines how the aviation sector will influence the emirate’s economy in the future (2020, 2030)

The report asserts the extent the aviation sector contributes to the economic growth as well as contributing towards other industries, posing as a means for a range of activities and fields within the economy.

The reason Dubai has developed incredibly during through the years is due to the goals and visions set by its government as well as strategic planning and cooperative work. It comes as no surprise that Dubai is an international aviation hub at present. Dubai has worked hard through the years to become more competent and create an infrastructure, in order to further develop and grow. Dubai will continue investing in its infrastructure, welcome international competition amongst other aviation sectors and aim to open new efficient markets while conducting effective activities and implementing efficient policies. Finally, Dubai’s aim is to become the number one destination amongst international travelers as well as traders, who will consider the emirate as a great destination and transport centre.

Aviation Sector Contribution to Economy

The entire aviation sector, including Dubai Airports, Emirates Airline and other related aviation businesses like airlines flying in and out of Dubai, Dubai Duty Free and other authorities, contributed a total of US$16.5 billion to Dubai’s GVA during 2013. The amount also takes into consideration direct, indirect as well as other contributions. The amount contributed by the aviation sector attributed to 16.5% of the emirate’s GDP, and it is estimated the sector offered 259 thousand jobs in Dubai alone.

Additionally, every $100 generated from the aviation field, an additional $72 is spent in other fields within the emirate’s economy. Likewise, for every 100-work positions created within the aviation field a further 116 work positions are opened in the emirate.

Tourism-Based Benefits

it is not surprising that the aviation sector has positively influenced and enhanced the tourism industry in Dubai. in 2013 total tourism and other travel related activities contributed $10.2 billion GVA, which in turn opened an additional 157,100 employment positions. During 2013, almost 10 million non-UAE travelers visited Dubai. Their total expenditure amounted to $13 billion.

Both the public and private aviation sectors worked towards establishing and developing Dubai’s aviation and tourism infrastructure, aiming to further support and enhance inflow of tourists. Dubai’s efforts have paid off since at present the emirate holds a 0.4% share of business and tourism inflow, two times more than in 2000.

Connecting Flights from Dubai

One of Dubai’s most significant attributes is the connecting flights it offers to other destinations.  According to the report, visitors could connect to 25 cities internationally from Dubai, equal to lightly over 80% of international cities. In general, during the previous year, Dubai offered travelers connections to about 150 cities, populated with more than one million people, thus establishing possible export markets in 13% of the world’s overall population. Likewise, cargo tonnage has also developed and grown significantly since 1990, showing a 13.5% growth annually. Average international trade has also experienced a 5.6% growth rate annually.

Both Dubai’s passenger and cargo connecting flights have positively influenced trade and Foreign Direct Investment (FDI) as well as opening doors to new foreign, enhancing exports and rising the amount of competition within Dubai’s local economy.

Predictions of Economic Benefits in 2020 and 2030

During the next six years, Dubai’s aviation sector is presumed to grow due to its International passenger and cargo inflow. The aviation sector’s airline as well as airport capacity is constantly expanding in order to cater to the increasing demand. 

In accordance to the estimated growth the aviation sector will experience and Dubai’s plans to expand both its airports, Dubai International (DXB) and Al Maktoum International at Dubai World Central (DWC), it is presumed that the sector will contribute a total of $53.1 billion by 2020, including both tourism and aviation activities.

According to forecasts made, by 2020, the UAE will have the capacity to fly as much as 70 million travelers. The UAE’s airline and all its associates are already establishing plans to create the efficient infrastructure required to support the increase in the number of travelers. During 2020, Dubai will host the Expo 2020, which will attract more than 20 million visitors. Nonetheless, Dubai is hopeful all will run smoothly, as it has already began projects required to accommodate all the visitors.

The plan is to expand the size of the airports, which entails increasing airspace, stands areas, terminal areas and airfield. The aim is to be able to accommodate as much as 60% more airplanes by the end of 2015, and have the capacity to cater services to 90 million travelers by 2018. By 2020, it is forecasted that Dubai International will cater to 126.5 million travelers, 30% more than what was initially estimated in 2010.

By 2013, the aviation sector is estimated to contribute $88.1 billion to the emirates economy, supporting 1,194,700 positions in total. 

Dubai Trade Greets 'Doing Business 2015' Report

The Doing Business 2015 report, published by the World Bank and International Finance Corporation (IFC) was greeted warmly by Dubai Trade, the leading cross-border trade launcher.

According to the report, the United Arab Emirate (UAE) moved up three positions, in contrast to its last year ranking. The UAE is now amongst the top ten economies that have showed the most improvement since last year. 

The UAE was delighted by the Doing Business 2015 report and viewed it as an honor because the World Bank and IFC annual reports are internationally considered as the best business index. The yearly report motivates and inspires changes and the introduction of new policies. Thus, being amongst the top ten most improved economies will attract more investments, motivating investors to launch new projects and further enhance the region.

Another report, the Ease of Doing Business, names the best and worst economies for conducting business ventures by taking into account ten diverse features of an economy like trading across borders, new business launches and property that has been registered. According to the report, the UAE is trading with the 189 countries included in the report, and as such has been marked in the top ten countries. The UAE has also been positioned for the eighth successive year, as the first country in the MENA region under the Trading across Borders category.

The UAE contributed its success to its innovative business spirit, computerization and simple procedure the nation has adopted at their ports, including e-payments, e-gate passes and simplistic clearance procedure. The report shows the UAE is on its way to accomplish its aim of being one of the best countries on the globe by 2021.

The Doing Business Report 2015 evaluated the UAE as the only economy in the Middle East to be ranked in the top 25 countries listed in the report.
 

Since the previous report, the UAE has improved in three of the ten features the World Bank and IFC evaluate. The UAE showed improvement in acquiring credit, registering of property and protecting small investors. The UAE preserved its previous position, holding its first place under the paying taxes in ease category, while upholding its fourth position under acquiring electricity, obtaining permits for construction and registration of property. On an international level, the UAE came eighth under the trading across borders category.

Dubai Trade has contributed greatly to the UAE’s overall improvement, by gathering important and relevant information from customers and assembling the information collected through to its state authorities, like the Committee of the Executive Council, the Prime Minister’s office and staff, the Emirates Competitiveness Council and the Dubai Competitiveness Council. The results of the annual Doing Business report, aids the UAE to further improve by introducing new trade modifications and alterations, while also enhancing other sectors by attracting more investments and businesses within the region.

The UAE view their success to their leadership and their motivation to develop and launch projects similar to those developed in the majority of OECD countries like Denmark, New Zealand, Norway, Korea, the UK, Finland, the USA and Australia. The UAE is proud to be ranked amongst the leading economies of the world as being a business-friendly environment. In addition, it is noteworthy to mention that the UAE’s position improves every year.

Dubai Trade is attentively cooperating with its trade partners and logistics, such as the Dubai Customs, DP World and Economic Zones World. Dubai Trade intends to further improve the procedures of conducting business in Dubai in order to maintain its high-ranked position within the MENA region as well as in the international scope. It aims to decrease export and import fees, paper work and time. Presently three documents are required to be submitted concerning exports and five are needed for imports. In addition, in comparison to OECD, which takes about ten days to export and seven days to import, the UAE only takes seven days for both.

During the last three years, the UAE has managed to maintain a high ranking both regionally and internationally. The World Bank and IFC support the UAE’s improvement and state that the nation has created the best business-friendly regulatory environment throughout the MENA region. 

Dubai Banks

In spite of decrease loan growth and global crisis, it is generally believed that banks within the United Arab Emirates (UAE) will record an increase amount of profits in the third financial quarter of 2014.

The UAE banks have shown an increase in profitability and troubles concerning liquidity of funds seem to have alleviated. The Non-Performing Loans (NPL) has marked a noticeable decline from 8.7% in 2012. In 2013 the NPL was recorded at 8.1% thus decreasing 0.6% and is expected to fall to 7.4 in 2014.

The UAE banks are presumed to show increased profits made by lower provisions and a strengthened loan growth reference to the consumer banking business. In accordance to SICO, an investment bank based in Bahrain, due to the obvious increased confidence within the corporate sector, UAE banks are presumed to record higher asset growth rates and profits because of the increased business the real estate sector is generating and higher levels of state spending.

Credit growth increased by approximately 4% in UAE’s banking sector in the first half of 2014. Expert analysts anticipate the growth will reach 7% by the end of 2014, and is anticipated the growth rate will increase even further in the following year. Standard & Poor’s, a credit rating agency, anticipate credit growth will increase by 8-9% in 2014-2015. This credit growth is anticipated based on the state’s spending and diversified business sectors that are growing, apart from oil dependant sectors.

In accordance to the Purchasing Managers Index (PMI), the UAE’s economic sectors, without taking into consideration oil companies, strengthened tremendously in August-September. Additionally, the pace in which non-oil companies expanded was rapid within the previous three months.

Experts believe UAE banks will remain healthy in 2014, and will be enhanced further by its diversified sectors (non-oil companies), increase in real estate and low interest rates. The rise in quality real estate together with the growth in credit demand in the corporate sector will inevitably lead to a rise in profits.

Standard & Poor’s anticipates that banks based in Dubai will grow at a faster pace compared to other banks in the emirates, like Abu Dhabi for instance. This is due to the fact that Dubai-based banks were cautious with approving loans from 2009 to 2012. In 2013, Dubai-based banks started lending since the majority of banks advanced and developed their funding profiles and quality of assets.

During the previous month, Dubai’s Islamic Bank announced its loan forecasts for 2014. Previously, the bank presumed it would lend 10%-15%, whereas now it anticipates lending 15%-20% in 2014.

Expert financial advisors and professional bankers state that margin compression is an issue that all UAE banks will need to deal with. Nonetheless, they remain confident that the banks will remain healthy and retain their high profitability rates although the increased competition they will face, and consequently lead the UAE banks to higher levels of liquidity and lower margin compression rates.   

In September 2014, analysts announced that UAE banks are expected to increase their profitability, improve their liquidity and remain capitalised. 

Financial Centres: Dubai’s Increasing Competition

Over the last ten years many financial centres have risen and fallen throughout the Middle Eastern countries. Formerly, Beirut was considered the area’s banking centre and also Manama was once viewed as the most reliable financial hub throughout the Gulf region. However, due to political instability they experienced during the years both hubs have suffered tremendously. Problems of credibility have surfaced due to their unstable infrastructure leaving investors, bankers and business people with no choice than moving on.

At present, Dubai InternationalFinancial Centre (DIFC) is considered as the top financial hub. The DIFC opened in 2004 and is now the home to hundreds of registered companies that focus on services. The DIFC’s success is attributed to its stable regulatory structure, which consists of a court system founded on international common legislation, Dubai’s stable and strong infrastructure and its strategic position as a regional centre of trade, tourism and other business orientated sectors.

Nonetheless, it is safe to say that generally the financial industry is known to be inconsistent, and companies are always in search of anything that may offer even the slightest advantage. Today, there are many emerging hubs trying to attract banks, investors and other business companies away from Dubai.

One of Dubai’s most promising competitors is the Qatar Financial Centre (QFC). QFC is not totally considered as a free trade zone, but it offers the majority of benefits Dubai’s free zone offers. Licensed firms are at liberty to conduct business both inside and outside of Qatar, and they are not limited to a specific location in Doha. QFC also offers low tax rates and its legal system, as DIFC, is founded on English common legislation.

Previously, the QFC concentrated on just a few principal sectors like asset management, reinsurance and captive insurance. Today, the QFC’s focus seems to be changing, and is attempting to explore new sectors, especially non-financial service companies that do not need the QFC Regulatory Authority’s approval and  permission to operate, nor does it have to regulate the companies. A representative of QFC recently stated that over the past year the QFC has registered an increased amount of non-regulated firms which consist of business and professional services, management offices, company headquarters, trust and holding companies.

Abu Dhabi’s new financial hub will be a foil to Dubai. It is a fact the two leading emirates are Abu Dhabi and Dubai, which generate most of the UAE’s economy. Consequently if one of the two emirates thrives, the other will follow and vice versa of course.

Naturally, there will be economic sectors that both Abu Dhabi and Dubai will offer since both financial hubs aim to cover a diverse variety of services. However, differentiation between the two hubs will also exist. For instance Abu Dhabi will specialise and focus on oil, gas, commodity trade and currency, which are the sectors it knows best. Its financial influence and affluent wealth may also appeal to leading financial companies especially in the fields of asset management, private banking and brokerage.

These results should offer a real enhancement to the new region and Riyadh’s financial industry. Conversely speaking, the region has a thriving regional financial hub that can sustain itself. This is the reason the Saudi authorities have not shown great eagerness concerning the creation of a new regional financial hub. 

Group Recognizes DMCC Free Zone as Best for Small and Medium Enterprises

The financial magazine FDI has named DMCC, Dubai’s new free trade zone as, "Global Free Zone of the Year for SMEs" through their ranking awards of 2014. The DMCC was created with the intention of marking Dubai as the best international hub for commodity trade and enterprise.

The FDI’s award has proven even further that Dubai is in fact the most prominent and suitable destination and home for SMEs.

Dubai’s DMCC was selected by the FDI after its judges examined its overall performance during the previous year. They reviewed features like the increase of tenants, its growth percentage and how it introduced new motives and incentives so as to make the free zone competitive.

The award indicates that the DMCC is not only considered the best financial hub within the MENA, for SMEs but also across the globe. Although DMCC offers services to all sized-corporation, the FDI judging committee regarded that the free zone is especially strong and attractive for SMEs. The rate in which new companies are registering in DMCC only goes to prove that it is the most attractive free zone internationally.

it is a known fact that the free zone market is especially competitive throughout the globe, even more in the Middle Eastern countries and Dubai. Thus, it is a great honour that DMCC was awarded as the most elite and attractive free zone trade for SMEs, as it proves its position and strength on an international spectrum.

The FDI reviewed forty-five free zones across the globe, including seventeen free zones that also participated in the FDI Middle East and North Africa Free Zones of the Year 2014 in the beginning of the year.

At present, DMCC’s registered SME companies amount to 70% of its member companies. These SMEs are involved in many sectors like trading, shipping and recruitment, advertising, fashion and technology. DMCC is home to an abundant of diverse companies. The free zone is also home to a plethora of leading and large corporations like Alcatel Lucent Middle East and North Africa, 7-Eleven, Nutricia Danone, LVMH and Carrera Y Carrera.

DMCC:

the DMCC free zone, was set up in 2002 by the government of Dubai. The main aim was to create the required physical, market and financial infrastructure so as to establish a commodities market in Dubai. DMCC is home to many leading companies within the commodities sector, but also supports industries that are linked to finance, insurance and logistics. DMCC is viewed as a strong and vigorous free zone, with a strong infrastructure which includes free zone benefits and status, trade networking platforms, built storage facilities and secure vaults. Registered and resident companies enjoy the attractive benefits offered by the free zone, which comprises amongst other, 0% corporate and income tax for 50 years, 100% foreign business ownership, complete possession of business premises and a secure controlled environment. DMCC has also introduced a compliance policy, which is based on the compliance legislation and regulations of the UAE Federal Government and proficient international entities. The free zone is the owner of three completely operational towers that offers most of the physical, market and financial infrastructure. The towers include the facilities of Jewellery & Gemplex, the expert diamond and pearl traders and gold vault.