The UAE is offering incentives to attract hundreds of digital companies to set up in the country as part of a programme to draw more foreign direct investment and position itself as a global tech centre.
Under the first phase of the NextGenFDI initiative, the Emirates aims to attract 300 digital companies within six months to a year, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said at the launch of the programme on Wednesday.
Incentives for digital companies include a faster business set-up process, better access to finance, easier visa procedures and attractive commercial and residential leasing terms.
“We are moving from a regional hub to a global hub, we are competing with the big boys now. The competition in the last [few] years was with the region, now we are moving to become a global hub and attract companies and FDI,” Dr Al Zeyoudi said.
The UAE was ranked first in the Arab world and 19th globally in terms of FDI inflows, according to the World Investment Report 2022 issued by the UN Conference on Trade and Development (Unctad) in June.
The country attracted $20.7 billion worth of FDI last year, up 4 per cent from 2020.
The UAE was ranked 17th globally in terms of FDI outflows that totalled $22.5bn in 2021, a 19 per cent increase on the previous year, the Unctad report said.
“We want to be one of the top 10 countries globally to attract FDI, so that overall KPI has been already set and all these initiatives are contributing to [its] achievement,” Dr Al Zeyoudi said.
The new initiative will focus on companies led by software developers, data scientists, computer programmers and digital asset entrepreneurs, he said.
“We want to show digitally-enabled companies from Europe, Asia and the Americas that the UAE is the world's best place to live, work, invest and scale [up],” Dr Al Zeyoudi said.
“We want to show that we are here to help, [with everything] from commercial licences and work visas, to opening bank accounts, finding office space and [being] the perfect place to live.”
The UAE, the Middle East's business and finance centre, is already home to several major multinational companies.
It is seeking to attract technology entrepreneurs and start-ups from across the world as part of efforts to develop its future economy.
As part of its latest initiative, the Ministry of Economy signed partnerships with seven entities in Dubai and Abu Dhabi to convince digital companies to establish offices or headquarters in the UAE.
They are the Abu Dhabi Global Market, the Dubai International Financial Centre, the Dubai Multi Commodities Centre, Dubai Internet City, Dubai South, Emirates NBD and digital banking platform Wio.
Under the partnership, the seven organisations have committed to expedite the incorporation process for digital companies and ease their access to banking and financing systems, Dr Al Zeyoudi said.
“This will remove the complexity associated with establishing new businesses,” ADGM chief of staff Juma Al Hameli said at the event on Wednesday.
“The UAE and Abu Dhabi have already removed the cost and complexity of doing business, and built strong ecosystems to attract companies.”
About 60 per cent of regional FinTech companies are already based in the DIFC, said Arif Amiri, chief executive of the DIFC Authority.
“However, with this initiative, we will be working together with like-minded institutions and individuals to further multiply the impact of FDI in Dubai and therefore … into the UAE,” he said.
The UAE, the Arab world’s second-largest economy, has undertaken several economic, legal and social reforms in recent years to strengthen its business environment, boost FDI, attract skilled workers and provide incentives to companies to set up or expand their operations in the country.
Some of the reforms include the expansion of longer-term residency visas to broader categories of residents, wide-ranging changes to personal and labour laws, measures to allow full ownership of onshore companies by foreigners and the decision to change the UAE’s working week from Monday to Friday to align with other major economies.