Economic conditions in the GCC will worsen this year as the risks from oil price volatility, political instability and terrorism prompt high net worth individuals across the region to keep their money in cash or other liquid assets.
According to a survey by Emirates Investment Bank (EIB), millionaire investors from across the GCC are attempting to protect their wealth through more conservative and cautious investment decisions rather than splashing out on expensive overseas purchases or assets that could be harder to sell in a hurry.
The bank interviewed 100 high net worth nationals and expatriates with more than US$2 million of investable assets living in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
It found that nearly half of those questioned (47 per cent) felt that the global economic situation was worsening, while just 15 per cent thought that things were getting better. The result was in line with a year ago.
Closer to home, EIB found that high net worth individuals in the GCC have been getting steadily more pessimistic about the local GCC economy. It found that the proportion of respondents who said they felt they economic situation in the GCC was getting worse increased this year to 44 per cent, up from 36 per cent last year and just 9 per cent in 2015.
“The report does suggest a bit more caution concerning the medium-term outlook compared to previous years, but my view is that this is more realistic given the nature of the global economic and political climate,” said Khaled Sifri, EIB’s chief executive.
According to the survey, respondents reported that the average proportion of their wealth invested in cash and bank deposits had increased to roughly 27 per cent this year, up from 24 per cent last year and 17 per cent in 2015.
Conversely the amount of wealth invested in real estate investments fell to 15 per cent this year, down from 24 per cent last year and 30 per cent in 2015.
Globally, 42 per cent of respondents said that they were being more cautious about making new investment decisions and were looking for less risk, while 20 per cent said that they had reduced or stopped global investment activities.
Regionally, too, investors were gloomy. One-fifth of respondents said that they were being more cautious when making local investment decisions, fearing losses, while nearly as many (18 per cent) said that they had discontinued local projects because of the economic situation.
According to the report, investors said that the biggest factor affecting their investment decisions was the price of oil, with 71 per cent of respondents saying that it had some effect on their decisions last year.
Regional structural reforms were the second biggest factor, affecting 65 per cent of respondents.
Another 62 per cent said that currency fluctuations had some effect on their investment decisions.
And 45 per cent of those questioned said that the geopolitical situation in the Arab region had changed their approach to investing.
lbarnard@thenational.ae
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
MADAME%20WEB
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England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Results
1. New Zealand Daniel Meech – Fine (name of horse), Richard Gardner – Calisto, Bruce Goodin - Backatorps Danny V, Samantha McIntosh – Check In. Team total First round: 200.22; Second round: 201.75 – Penalties 12 (jump-off 40.16 seconds) Prize €64,000
2. Ireland Cameron Hanley – Aiyetoro, David Simpson – Keoki, Paul Kennedy – Cartown Danger Mouse, Shane Breen – Laith. Team total 200.25/202.84 – P 12 (jump-off 51.79 – P17) Prize €40,000
3. Italy Luca Maria Moneta – Connery, Luca Coata – Crandessa, Simone Coata – Dardonge, Natale Chiaudani – Almero. Team total 130.82/198.-4 – P20. Prize €32,000
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
ESSENTIALS
The flights
Emirates flies direct from Dubai to Rio de Janeiro from Dh7,000 return including taxes. Avianca fliles from Rio to Cusco via Lima from $399 (Dhxx) return including taxes.
The trip
From US$1,830 per deluxe cabin, twin share, for the one-night Spirit of the Water itinerary and US$4,630 per deluxe cabin for the Peruvian Highlands itinerary, inclusive of meals, and beverages. Surcharges apply for some excursions.
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
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