The UAE's move to form a Ministry of Investment this week is part of an orchestrated push by the country to boost foreign investment as it seeks to diversify its economy.
The new ministry will “support the UAE's business objectives” and has been given the task of proposing general investment policies in co-ordination with relevant authorities, the government said this week.
It will also prepare strategies, legislation, plans, projects and national programmes to promote the investment environment in the country.
“It's going to complement the [continued] efforts [by the country],” Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, told The National on Wednesday.
“It’s going to have a huge focus on investments, a clear strategy and a three-year targeted sectoral approach", which will help boost investments, he added.
Mohammed Alsuwaidi, managing director and chief executive of Abu Dhabi-based investment and holding company ADQ, has been appointed as the country's Investment Minister.
“The aim of the new ministry is to develop the country's investment vision, stimulate the investment environment internally and continuously enhance the competitiveness of our procedures and legislation to ensure that the country remains a global destination for investment and a major player in the global investment movement,” Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, wrote on Twitter on Monday.
The announcement came at a time when the UAE recorded its highest foreign direct investment inflow last year at $23 billion, up 10 per cent annually, according to the World Investment Report 2023 issued by the UN Conference on Trade and Development (Unctad) on Wednesday.
The country was ranked first in the Arab world and 16th globally in terms of FDI inflows – up from 22nd last year.
It received the fourth-largest number of greenfield projects at 997, an 84 per cent annual increase, the report said.
The UAE was ranked 15th globally in terms of FDI outflows that totalled $25 billion last year, an increase of about 9 per cent on the previous year, the Unctad report said.
“Inward investment into the UAE has [grown] every year since 2015, as structural reforms have made the country an attractive destination for foreign investors,” Dubai bank Emirates NBD said in a report.
The Unctad report also cited the UAE's comprehensive economic partnership agreements (Cepas) that are enhancing bilateral investments.
The UAE has signed Cepas with India, Cambodia, Georgia, Israel, Indonesia and Turkey, and is working towards signing 26 similar deals as it seeks to attract more investment and diversify its economy.
“Our target is to have access to 90 per cent of the global trade … but we're focusing now on the 26 [Cepas] and we really hope that we're going to achieve it in the five years,” Dr Al Zeyoudi said.
The UAE has also set an ambitious target to attract Dh550 billion ($150 billion) in foreign investment by 2031 and rank among the top 10 countries globally in terms of attracting FDI, as part of its diversification strategy.
“That is the ultimate goal … We are doing all our efforts to ensure that the ecosystem in the country is attractive for investors,” Dr Al Zeyoudi said.
“Our target is always to beat our numbers from the last year, so we'll do our best to ensure that our numbers this year are going to be much better,” he said, adding that the first-quarter data “looks very promising”.
The UAE has unveiled several initiatives and introduced a series of policies – from allowing 100 per cent foreign ownership of companies to more flexible visa programmes – to help attract more capital and talent to the country.
It unveiled the NextGen FDI programme in July last year, which seeks to speed up licensing, ramp up the issuance of bulk or golden visas, improve banking services and provide commercial and residential lease incentives for advanced technology companies seeking to relocate to the country.
It has set a target of approximately 300 digitally enabled companies and aims to attract skilled programmers, data scientists and technology engineers within the next three years.
Some of the companies that have signed up under the initiative and are expanding into the UAE include Odys Aviation, a US-based hybrid electric aircraft manufacturer, UK-based software development company Godel Technologies and food technology company Krush Brands.
Meanwhile, the country’s financial centres, including the Abu Dhabi Global Market and the Dubai International Financial Centre, are also attracting big global names.
Global investment bank Goldman Sachs has confirmed plans to open an office within the ADGM to expand its presence in the Mena region.
In April, Ray Dalio, the billionaire founder of Bridgewater Associates, the world's largest hedge fund, also said he was establishing a branch of his family office at the ADGM, as part of his expansion in the Middle East.
Investment firm Brevan Howard is also boosting its presence in the UAE, with plans to expand to 100 people in the country.
In May, Abu Dhabi announced plans for a tenfold expansion of the ADGM to make it one of the world’s largest financial districts.
On Thursday, US hedge fund Verition, which manages approximately $7.3 billion globally, said it plans to open an office in the DIFC as part of its global expansion. The company has been licensed by the Dubai Financial Services Authority to manage assets and conduct certain other financial services activities.
Meanwhile, the DIFC said last month that it would establish an artificial intelligence and Web3 centre with a goal of attracting more than 500 high-tech companies by 2028.
The Dubai AI & Web 3.0 Campus will be the largest cluster of such companies in the Mena region and is designed to bring in $300 million in funds and create more than 3,000 jobs in the next five years.
“The economic legislation and policies adopted by the UAE have played a prominent role in strengthening and building a top-tier investment and business ecosystem in line with international best practices," said Abdulla bin Touq, Minister of Economy.
"This proactive approach has facilitated a swift transition towards a new economic model centered around flexibility and innovation. Through collaborative national efforts, we are striving to achieve further growth and prosperity for the UAE economy, boost the country's development trajectory, and uphold its leading and competitive position at the regional and global levels.”
The new Ministry of Investment is also expected to boost the country’s venture investment landscape.
The UAE secured north of $150 million in venture investment across 30 deals in the first quarter of the year, according to start-up data platform Magnitt.
The country led the Mena region in terms of non-mega deal funding ($100 million-plus), the report said.
More than 60 per cent of the total funding in the UAE came from the top three rounds recorded by FinTech Tabby, dine-in payment disrupter Qlub and online marketplace Cofe.
“Over the past few years, the UAE has been focusing on diversifying its economy and focusing on more innovative non-oil sectors like information technology, real estate, agriculture, aviation, etc,” Magnitt said.
Other GCC countries are also putting efforts to diversify their economies away from hydrocarbons by attracting more investments and moving towards innovation and knowledge-driven sectors.
Saudi Arabia, as part of its Vision 2030 agenda, also created a Ministry of Investment in 2020, replacing the Saudi Arabian General Investment Authority, to boost FDI.
The kingdom attracted $7.9 billion in FDI inflows last year, according to the Unctad report.
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
UAE currency: the story behind the money in your pockets
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Sour%20Grapes
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How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The chef's advice
Troy Payne, head chef at Abu Dhabi’s newest healthy eatery Sanderson’s in Al Seef Resort & Spa, says singles need to change their mindset about how they approach the supermarket.
“They feel like they can’t buy one cucumber,” he says. “But I can walk into a shop – I feed two people at home – and I’ll walk into a shop and I buy one cucumber, I’ll buy one onion.”
Mr Payne asks for the sticker to be placed directly on each item, rather than face the temptation of filling one of the two-kilogram capacity plastic bags on offer.
The chef also advises singletons not get too hung up on “organic”, particularly high-priced varieties that have been flown in from far-flung locales. Local produce is often grown sustainably, and far cheaper, he says.
Top 10 in the F1 drivers' standings
1. Sebastian Vettel, Ferrari 202 points
2. Lewis Hamilton, Mercedes-GP 188
3. Valtteri Bottas, Mercedes-GP 169
4. Daniel Ricciardo, Red Bull Racing 117
5. Kimi Raikkonen, Ferrari 116
6. Max Verstappen, Red Bull Racing 67
7. Sergio Perez, Force India 56
8. Esteban Ocon, Force India 45
9. Carlos Sainz Jr, Toro Rosso 35
10. Nico Hulkenberg, Renault 26
HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
