UAE’s vision of 2020 has been calling for all types of objectives, from decision pattern to building investment. However, only recently measures have been taken aimed at improving Dubai’s economy even more than before.
These 9 strategic actions are primarily focused on enhancing business opportunities for investors, easing the way for already established businesses and attracting human capital for a further development of a competitive knowledge-based economy.
1 – Government fees put on freeze
The federal government of the UAE declared a freeze on any increase in government fees for the next 3 years. This effort aims to attract further foreign investments, promote economic stability and competitiveness, as well as assist the industrial and commercial sectors.
2 – Vat subtracted on gold and diamond products
Due to the decline in sales by nearly 50% in January, the recently commenced 5% Vat that was placed on goods and services was rescinded in regards to the gold and diamond sector, at a wholesale level. The Vat will however still be imposed, although only on the transactions that take place in retail outlets. This move is expected to set off a revival in consumers attitudes towards the sector.
3 – Lenient company ownership rules and visa provision for professionals
Company ownership rules now allow 100% foreign ownership, in hopes of attracting international investment into the economy. Moreover, 10 – year visas are now provided for all investors and professionals in the fields of medicine, scientific research and technology, that also extend to their families.
4 – Stabilization of school fees
The Dubai Executive Council has issued a decree to contain school fees for all private establishments, in the aim of preventing any possible fluctuations and attempting to reduce the financial burden that have been felt by parents due to an overall increase in the costs of living.
5 – Economic incentive packages announced in Dubai and Abu Dhabi
A package of policies aimed at boosting the economy of both Emirates were revealed earlier this month. These packages include and are not limited to, the setting up of a consultative council to represent international companies, proposals to allocate 20% of government contracts to SME’s, as well as the Department of Finance offering fee payments by instalments. In addition, commercial licenses will be issued more easily and 10,000 jobs will be created for Emiratis in both public and private sectors.
6 – Dubai to waive 4% registration penalty
The Dubai Land Department announced that it would give up the 4% registration penalty for developers and purchasers who were not able to inform the department of unit sales. However, a 4% registration fee would still be applied on these transactions. The move is aimed to encouraging relatively older projects and properties where developers and buyers encountered difficulties throughout the registration, following the handover.
7 – Reduction on hotel sales fees
HH Sheikh Hamdan Bin Mohammad Al Maktoum mentioned a cut from 10 to 4% in Dubai’s hotel sales fee. The move is aimed to enhance further growth of the tourism sector and fulfilling the city’s goal to increase the number of visitors to 20 million by the year 2020.
8 – Far-reaching changes to UAE employment and visa rules
UAE Cabinet adopted a new change to visit visas and employment measures, in which private companies would pay an annual insurance fee of Dhs 60 per employee, aimed at covering insurance and other service benefits instead of paying a Dhs 3000 deposit. In addition, in case of injury, private companies would need to cover Dhs 20000 per worker. Jobseekers will be granted six-month visa with no additions fees and will not be any longer required to leave and re-enter the country in case of changes in visa status.
9 – UAE’s attractiveness to foreign students
The Knowledge and Human Development Authority announced that the UAE will introduce five-year residence visas for students, as well as 10-year visas for exceptional students, in hopes of increasing both opportunities for higher education and foreign students. Moreover, outstanding students will be granted two-year residence visas after their graduation, giving them the opportunity to seek for internships and jobs, which in return will boost UAE’s knowledge economy.
Get in touch with our Dubai office
Kelmer Middle East team of legal and fiscal experts, HR consultants, and VAT specialists remain available for any clarification, regarding the latest initiatives and measures that will make business easier to conduct in the UAE.
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Telephone: +971 (0)4 432 7598