Investor confidence in Dubai remained strong despite several global and regional challenges. This was on the back of a string of investor-friendly reforms and regulations initiated by the authorities, according to various surveys, including the latest data provided by the Department of Economic Development (DED).
The competitive edge Dubai has been enjoying for years as a global hub for startups and new ventures received yet another acknowledgement with the DED data showing that the emirate clocked 24,489 transactions related to business licensing and registration in July alone.
While a total of 1,651 licences were issued during the month, 12,532 renewals and 2,175 initial approvals were recorded, showing sustained investor confidence in Dubai.
Among the game-changing initiatives that have improved business confidence and the long-term investment outlook of Dubai are the landmark residency and investment reforms announced in May, followed by a host of other stimulus measures, including new labour and immigration rules. However, the most anticipated game-changer will be the new investment law to be unveiled in the fourth quarter – which will authorise complete foreign ownership of firms in select sectors.
The decision of the UAE Cabinet to raise global investors’ ownership of companies to 100 per cent and the launch of an integrated system for UAE visas aimed at attracting talents are landmark steps that fast-track the country’s efforts towards achieving the objectives of the National Agenda 2021, according to Sultan bin Saeed Al Mansouri, UAE Minister of Economy.
“The new labour and visa reforms will have a far-reaching positive impact on the overall business climate of Dubai. Enhancing competitiveness – the hallmark of Dubai – will not only attract more international investors but also help infuse more confidence to existing businesses and investors,” said James Mathew, senior partner and Group CEO – UAE & Oman, Crowe Horwath, said.
M.A.K. Harid, managing director of Paradigm Financial Services, said the spate of announcements to reform business ownership laws and residency visa rules is making a positive impact across most key sectors. “These steps have already started to encourage the flow of more foreign direct investment while creating more stability in the market. The overall business confidence is fast improving with the non-oil private sector getting more upbeat,” said Harid.
Dubai has been scoring high on several other fronts. The emirate’s economic diversification drive has been paying rich dividends as its competitiveness ranking improves, reducing the gap with the world’s top competitive economies.
According to the recent Dubai Competitiveness Report 2018 issued by the Switzerland-based IMD World Competitiveness Centre in cooperation with the Dubai Competitiveness Office of the DED, the emirate ranks first in the Arab world and fourth worldwide in the ‘economic performance’ pillar, beating Canada, Japan, Singapore and Hong Kong and all EU countries excluding Luxembourg.
The Dubai Competitiveness Report shows the emirate leading the Arab world in direct inward investment flows and tourism receipts among others. The report showed that Dubai ranked first among Arab countries and ninth globally in inward investment with 6.42 per cent of GDP and with a stock of $73.8 billion, ahead of the US, Australia, Canada, Germany, France and China. The emirate also ranked second in the Arab world and 12th globally in ‘foreign direct investment abroad’ with 4.51 per cent of GDP and a total stock of $28.8 billion.
Economists at FocusEconomics said growth in the UAE’s non-oil economy should accelerate this year on the back of strong investment.
“Notably, the large infrastructure push underway as part of the country’s preparation to host the 2020 World Expo, recent business-friendly reforms and stimulus and a new investment law will likely buttress investor confidence and provide a large boost to FDI inflows. In addition, the country can count on the dynamism of its tourism sector, especially in Dubai,” said panelists at FocusEconomics.
Among the total transactions recorded in July, 3,128 were related to trade name reservation and 1,268 to commercial permits. Auto renewal transactions amounted to 5,918, instant licences to 101, and 102 transactions were related e-Trader licences.
BRL activity in July reflected momentum across all sectors as new licences covered the commercial (60.5 per cent), professional (36.8 per cent), tourism (1.4 per cent) and industrial (1.3 per cent) categories. The outsourced service centres of DED accounted for 67 per cent of the total transactions completed in July.
The region-wise distribution of new licences shows Bur Dubai accounted for the lion’s share with 798 of the licences, Deira had 712, New Dubai 133 and Hatta, eight. Among the top 10 sub-regions, Burj Khalifa had 14 per cent, New Dubai eight per cent, Al Marar 5.9 per cent, Port Saeed 5.8 per cent, Dubai World Trade Centre 1 had 4.6 per cent, Naif four per cent, Al Garhoud 3.3 per cent, Al Karama 2.8 per cent, Al Muraqabat 2.1 per cent and Hor Al Anz, 2.1 per cent.
The construction sector accounted for 17.3 per cent of the new licences and community & personal services for 13.6 per cent, followed by hotels group (seven per cent), transport, storage & communications (3.5 per cent), manufacturing, (2.9 per cent), financial brokerage (2.5 per cent), health, labour & education (0.9 per cent), agriculture (0.4 per cent), and mining (0.1 per cent).
Indians, Pakistanis, Egyptians, Chinese, British, Saudis, Jordanians, Syrians, and Kuwaitis were the top nine nationalities of BRL customers in that order during July, the DED said.