The UAE was the world's 15th-biggest recipient of foreign direct investment in 2020, ranking one place above the UK and seven places higher than the prior year, according to the UN Conference on Trade and Development.
Although FDI flows plunged 35 per cent globally last year, investment into the UAE increased 11 per cent to almost $20 billion (Dh73.45bn), as Vice President and Ruler of Dubai Sheikh Mohammed bin Rashid revealed last month.
"Natural resources transactions drove investments in the country”, primarily the $10bn brought in from investors to Adnoc’s gas pipelines, Unctad's World Investment Report said. By contrast, the UK's FDI inflows fell by 57 per cent last year to $19.7bn.
Adnoc's strategy of releasing capital tied up in non-core assets has been a key driver of foreign investment into the UAE in recent years. In 2019, it attracted $5bn into its oil pipelines and last year's $10bn sale of a 49 per cent stake in the company that has the leasing rights to its gas pipelines brought in funds from a number of sovereign and institutional infrastructure investors, including US-based Global Infrastructure Partners, Canada's Brookfield Asset Management and Singapore's sovereign fund GIC, among others.
Adnoc also raised $2.7bn by monetising future rents from non-core property assets in September through a deal with US-based Apollo Global Management.
The UAE also attracted investment into other sectors. Some 53 per cent of FDI into Dubai in the first half of last year was into medium and high-tech sectors, according to Unctad's report. Pakistan's CCL Pharmaceuticals also took a majority stake in Dubai's StratHealth Pharma for an undisclosed sum.
Although the Adnoc deals were responsible for a large part of the FDI inflows, they demonstrate that an "investor can still be attracted to the right opportunity even when the global market is tight", Scott Livermore, chief economist at Oxford Economics, said.
The UAE made a number of changes to commercial and company laws over the past few years in a bid to spur investment. New rules allowing 100 per cent foreign ownership of onshore companies in most sectors of the economy came into force earlier this month.
The country was also the 13th-biggest investor in terms of other nations' economies, recording an FDI outflow of $19bn as major investors, such as International Holdings Company, invested in Sudan's agricultural sector and Mubadala invested $201 million in Uzbekistan's power industry, according to the report.
Saudi Arabia also managed to grow FDI inflows last year by 20 per cent to $5.5bn. Investment picked up as the year progressed, with inflows of $1.9bn generated in the final quarter. Bahrain's Gulf International Bank investing $450m to begin commercial operations in the kingdom and an investment of $200m into the Saudi Digital Payments Company by Western Union were two of the bigger deals.
On Friday, Saudi Aramco closed a $12.4bn deal with a consortium led by EIG Global Energy Partners for the acquisition of a 49 per cent stake in its oil pipeline business.
Globally, FDI fell 33 per cent last year to $1 trillion from 2019, as all foreign investment segments witnessed a fall in activity. FDI fell by 58 per cent in developed economies and by a more moderate 8 per cent in developing economies, mainly because flows in Asia remained resilient, the Unctad report said. Flows to China increased 6 per cent and to India by 25 per cent, driven by acquisitions in the IT sector.
However, flows to Europe fell 80 per cent, Latin America and the Caribbean dropped 45 per cent, North America declined 42 per cent and Africa slipped 16 per cent.
Globally, funding flows for greenfield projects were hit hardest and continued to decline – by 29 per cent annually at the end of the first quarter of this year. Cross-border M&A flows fell 13 per cent and international project finance deals declined 5 per cent during the same period, according to Unctad.
Although the global outlook for FDI is likely to remain "challenging", the investor-friendly reforms being undertaken by a number of economies in the region means that competition for the funds that are available is likely to grow, Mr Livermore said.
"The UAE has boosted its competitive position [through] reforms such as 100 per cent foreign ownership of onshore companies and measures designed to attract foreign talent, as well as setting out ambitious growth plans to diversify the economy," he said.
"These reforms should support a symbiotic relationship of supporting non-oil economic growth and increasing the UAE's attractiveness" to foreign investors, he added.
Unctad will host its week-long World Investment Forum event this year in Abu Dhabi from October 17 to 21.
Company%20profile
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My Cat Yugoslavia by Pajtim Statovci
Pushkin Press
The years Ramadan fell in May
How%20champions%20are%20made
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
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Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Company%20profile
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
UFC Fight Night 2
1am – Early prelims
2am – Prelims
4am-7am – Main card
7:30am-9am – press cons
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Mumbai Indians 186-6 (20 ovs)
Kings XI Punjab 183-5 (20 ovs)
Mumbai Indians won by three runs
Squad for first two ODIs
Kohli (c), Rohit, Dhawan, Rayudu, Pandey, Dhoni (wk), Pant, Jadeja, Chahal, Kuldeep, Khaleel, Shami, Thakur, Rahul.
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
Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
The Bio
Ram Buxani earned a salary of 125 rupees per month in 1959
Indian currency was then legal tender in the Trucial States.
He received the wages plus food, accommodation, a haircut and cinema ticket twice a month and actuals for shaving and laundry expenses
Buxani followed in his father’s footsteps when he applied for a job overseas
His father Jivat Ram worked in general merchandize store in Gibraltar and the Canary Islands in the early 1930s
Buxani grew the UAE business over several sectors from retail to financial services but is attached to the original textile business
He talks in detail about natural fibres, the texture of cloth, mirrorwork and embroidery
Buxani lives by a simple philosophy – do good to all
Juliet, Naked
Dir: Jesse Peretz
Starring: Chris O'Dowd, Rose Byrne, Ethan Hawke
Two stars
APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
