13 Reasons to Set Up a Business in the UAE…

The UAE has become a top global destination for businesses focusing on innovation, artificial intelligence, and entrepreneurship.

13 Reasons to Set Up a Business in the UAE…

UAE News:

The UAE has become a top global destination for businesses focusing on innovation, artificial intelligence, and entrepreneurship, as well as attracting foreign investments, which led to an improvement in its rankings on international indicators related to business and investment attractiveness.

The UAE Central Bank forecasts growth at 3.9% this year and 6.2% in 2025 in its latest Economic Quarterly Review report. The surge in growth next year can be traced to a recovery in the hydrocarbon sector (8.4% from 0.3% in 2024) while non-hydrocarbon GDP is estimated at 5.3% (from 5.4% in 2024). The apex bank revised down its inflation forecast for this year to 2.3% (from 2.5% previously) and projects the 2025 average to be 2.3% driven by non-tradeables.

Credit disbursed to SMEs stood at AED 81.7bn as of end-March, down by 4.7% YoY and 1.0% year-to-date, accounting for about 6.4% of total domestic credit to the private sector.

The value of gold reserves of the UAE Central Bank grew by 9.8% MoM and 12.6% YoY to AED 19.615bn by the end of March 2024. At end-2019, gold reserves' value stood at AED 4.044bn.

The DMCC freezone attracted more than 160 new companies from India last year, adding to the nearly 3900 registered Indian firms. DMCC attracted 2700 new firms last year, leading to a total of over 24k businesses in the free zone.

UAE is the largest Arab investor in Morocco and the second largest globally, disclosed the President of the Casablanca-Settat Chamber of Commerce, Industry and Services, and investment volumes are expected to double in the near term. UAE’s exports to Morocco were AED 4.85bn in 2023 while Moroccan exports to the country clocked in at AED 742mn.

About 6,700 millionaires are expected to move to UAE by end-2024, according to international investment migration advisory firm Henley & Partners. The UAE is ranked 14th globally in terms of millionaires: home to 116,500 millionaires (having USD 1mn+ in liquid investable wealth), 308 centi-millionaires (USD 100mn+) and 20 billionaires (USD 1bn+).

MENA News:

Bahrain attracted USD 6.8bn in FDI flows in 2023, according to UNCTAD’s World Investment Report 2024, exceeding the previous record of USD 2.8bn in 2022. According to Bahrain’s Information & eGovernment Authority, nations contributing to the country’s FDI stocks include Kuwait (36%), Saudi Arabia (23%) and the UAE (10%).

Foreign investments to the Muscat Stock Exchange increased by 19% as of May; the capital markets attracted investors from 135 nationalities, up from 67 in 2023.

The revenue of three- to five-star hotels in Oman accelerated by 11% YoY to OMR 93mn (USD 242mn) as of end-April. Hotel guests grew by 15% YoY to 767,900 (Asian guests grew by 23% YoY) and room booking were up by 10% to 241,058.

Point of sale transactions in Qatar grew by 8.6% YoY to QAR 7.95bn in May while the value of e-commerce transactions were up by 29.2% to QAR 3.58bn, as per Central Bank data. Foreign currency reserves and liquidity of the Qatar Central Bank increased by 3.96% YoY to QAR 249.165bn in May while gold reserves increased by QAR 7.3bn to QAR 28.33bn.

The IMD’s World Competitiveness Report 2024 placed UAE 7th globally (+3 places), Qatar (11th) and Saudi Arabia 16th (from 24th). The UAE ranked among the top 10 globally in over 90 key and sub-indicators.

Startup Genome’s latest Global Startup Ecosystem report ranked Abu Dhabi as the fastest-growing startup ecosystem in the region, with a global rank between 61 and 70. The city created USD 4.2bn in ecosystem value between July 2021 and December 2023 while early-stage and VC funding for the period touched USD 324mn and USD 1.1bn respectively. Within the region, Riyadh and Dubai were the two ecosystems making the global list of cities with four or more unicorns in the last 10 years.

MAGNiTT reported that MENA recorded 43 startup exits in 2023, up from just 15 in 2015. The UAE accounted for 24 of the 43 exits last year (with 60% of the deals happening in January-September) while this year saw 10 exits being completed.

Crude oil production in Saudi Arabia increased by 13k barrels per day (bpd) to 8.99mn in April, according to JODI. Exports however declined by 445k bpd from March to 6mn.

China approved its first exchange-traded funds investing in Saudi Arabia equities: with this, investors in China will be able to trade Saudi stocks.

The total number of women leaders in the Saudi labour market reached 1,707 exceeding the target of 1000 in the Vision 2030 document. Women’s share in the labour market rose to 34% in 2023 (2017: 21.2%) and women in middle and senior administrative positions jumped to 43.8% (2017: 28.6%).

Saudi PIF and a French PE group Ardian agreed to buy a 38% stake in London’s Heathrow airport for GBP 3.3bn: Ardian will become the biggest shareholder with a 22.6% stake, followed by the Qatar Investment Authority (20%) and PIF (15% stake).

Saudi Arabia’s PIF plans to invest USD 15bn in Brazil, according to Brazil’s Minister for Energy: plans shared suggest investment in sectors such as green hydrogen, infrastructure and renewable energy.

Global News:

Equity markets mostly gained last week, with the MSCI index of global stocks gaining for the third week in a row. While a few regional markets were closed for the Eid holidays (Oman, Saudi and Egypt), those that were open reported weekly gains. The dollar was strong last week: it touched a new 8-week high versus the JPY and clocked in a 5-week high versus the GBP; the CNY dropped to a 7-month. Oil prices inched up by around 3% weekly, with the Brent and WTI settling at USD 85.2 and USD 80.7 respectively.

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Nasser Saidi & Associates

Arabian Business