The UAE continued to improve its global ranking as an offshore location for business services, thanks to its status as an emerging tech hub, its ability to reskill talent and its friendly relations with key regional markets, according to a new report by global consultancy Kearney.
The Gulf country climbed four spots to 21st place on Kearney’s 2023 Global Services Location Index, which studies the main factors that make countries attractive as potential sites for offshore services.
Jordan, Saudi Arabia, Qatar, Kuwait, Oman and Lebanon all joined the list for the first time.
A country’s ability to reskill and use its workforce is a vital part of its attractiveness as an offshore location, according to Kearney.
“In an ever-changing global market landscape, where skills take precedence over cost advantages, a nation's true strength lies in its capacity to foster and unleash the potential of its talented people,” said Rob Van Dale, Middle East and Africa lead for digital at Kearney.
“While countries such as the UAE and Saudi Arabia do not naturally have a cost advantage, we see that their considerable focus on talent regeneration is starting to pay off, and in a world where this is expected to become more important, coupled with their investments in digital resonance and an already attractive business environment, they may in the near future further increase their attractiveness for high-skilled services catering to their region.”
The UAE's gross domestic product reached Dh1.62 trillion ($442 billion) at constant prices in 2022, achieving 7.9 per cent annual growth, supported by its non-oil sector as the country continues with its economic diversification strategy.
Looking ahead, the UAE aims to double the size of its economy to Dh3 trillion by 2031, with a focus on boosting non-oil exports.
An increasing number of companies are bringing their supply chains and manufacturing bases closer to home to reduce risks, avoid disruption, cut transport costs and benefit from government incentives, according to a January report by Dubai-based ports operator DP World.
A total of 96 per cent of company executives surveyed are reconfiguring supply chains because of geopolitical events such as the Russia-Ukraine war and US-China tensions, according to the Trade in Transition study commissioned by DP World and led by Economist Impact.
The number of companies shifting their manufacturing and suppliers last year – either to their home markets or near by – doubled from 2021, according to the survey.
"The UAE talent regeneration, combined with the country’s scale and its relations with nearby countries, will all help it to become the location of choice for nearshoring," the Kearney report said.
The Arab world's second biggest economy is an emerging technology hub in the region, where it is home to more than 4,000 start-ups, or 39 per cent of all scale-ups in the Middle East and Africa region, Kearney said.
Contributing to the UAE's score on talent regeneration are the "intensity of technology innovation" and the focus on digital skill improvement, two areas where the UAE is "focusing significant energy and investment, which is paying off", it said.
In 2022, scale-ups in the UAE raised more than 55 per cent of the $9.1 billion raised by scale-ups in the Mena region.
"The UAE is the second most talent regenerative country in the region. Its scaling capabilities and good relations with key Gulf and African countries position the UAE to become a location of choice for nearshoring for the region," according to the report.
The offshoring of business services is growing strongly across borders as companies try to lower their costs and become more efficient by using a global talent base.
The global market for business services grew from $624 billion in 2022 to $681 billion in 2023, and is expected to rise at a compound annual growth rate of 8 per cent through 2027, according to Kearney.
Companies decide where to locate offshore operations on factors including labour and infrastructure costs, available skills, quality of services rendered, infrastructure, business environment, and political and social risks.
Kearney's 2023 Global Services Location Index focuses on talent regeneration and digital skills, bringing Canada, Poland, and Singapore into the limelight as emerging technology destinations for establishing innovation hubs.
The index's top three countries – India, China, and Malaysia – continue to lead due to their "immense cost advantage, abundant talent pool, and strong skills", the report said.
India and China also showing signs of strength in talent regeneration capabilities, making them global frontrunners in the availability of a tech-enabled workforce, it said.
Brazil and the UK rounded off the top five countries. The UK has experienced a "notable change" with its move up to fifth place – the first time a western economy has entered the top five rankings.
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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First-round leaderbaord
-5 C Conners (Can)
-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);
-2 C Morikawa (US), M Laird (Sco), C Tringale (US)
Selected others: -1 P Casey (Eng), R Fowler (US), T Hatton (Eng)
Level B DeChambeau (US), J Rose (Eng)
1 L Westwood (Eng), J Spieth (US)
3 R McIlroy (NI)
4 D Johnson (US)
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
Japan 30-10 Russia
Tries: Matsushima (3), Labuschange | Golosnitsky
Conversions: Tamura, Matsuda | Kushnarev
Penalties: Tamura (2) | Kushnarev
More on animal trafficking
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
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Straightforward ways to reduce sugar in your family's diet
- Ban fruit juice and sodas
- Eat a hearty breakfast that contains fats and wholegrains, such as peanut butter on multigrain toast or full-fat plain yoghurt with whole fruit and nuts, to avoid the need for a 10am snack
- Give young children plain yoghurt with whole fruits mashed into it
- Reduce the number of cakes, biscuits and sweets. Reserve them for a treat
- Don’t eat dessert every day
- Make your own smoothies. Always use the whole fruit to maintain the benefit of its fibre content and don’t add any sweeteners
- Always go for natural whole foods over processed, packaged foods. Ask yourself would your grandmother have eaten it?
- Read food labels if you really do feel the need to buy processed food
- Eat everything in moderation
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
