Mohammed Alardhi is the executive chairman of Investcorp, chairman of Muscat Stock Exchange MSX and chairman of Royal Jet
October 14, 2021
In the past couple of decades, countries in the Gulf Cooperation Council (GCC) have channeled resources to diversify their economies and reduce their reliance on oil. I have always stressed the importance of tourism when it comes to the growth of countries in the region. The industry can evolve with the times and drive economic targets.
The world is now recovering from the fallout from Covid-19. According to a report published by the World Tourism Organisation (WTO), tourism is one of the sectors that has suffered the worst of the pandemic, with an 84 per cent decline in international arrivals between March and December 2020. WTO estimates that economic losses in the industry could reach up to $4 trillion in 2021.
Ferrari World Abu Dhabi has a series of attractions designed especially for children. Reem Mohammed / The National
A group kayaks in Abu Dhabi's Eastern Mangroves. Courtesy TCA Abu Dhabi
We must also consider that the past two years have been stressful for most, if not all, people across the world. Many people would be looking for accessible travel and recreational experiences. There is an opportunity to deliver packages that address this demand and help uplift spirits of travellers who have been limited by restrictions and demands of the pandemic.
Virtual reality tourism options can be brought to airports for travellers short on time
Many countries in the GCC are on their way to restart tourism, as the UAE and Oman have begun allowing travellers from all parts of the world, provided they have been fully vaccinated. Hopefully other countries will follow suit. The Gulf countries are uniquely placed, bridging East and West. The region has made enormous progress and boasts rich culture and heritage, along with plenty of tourist attractions to suit every age and interest.
One lesson from the pandemic is to innovate and adapt quickly to changing times. In the context of tourism, this could give rise to ideas that could help grow the industry and spearhead change.
Financial institutions in the Middle East must take advantage of the potential of the tourism industry and offer support to service providers to invest in resources, which would subsequently contribute towards growth. Players within the travel and tourism sectors can form regional partnerships to tailor packages that suit today’s traveller.
From the roses of Taif to stargazing on Moon Mountain, Saudi Arabia has plenty of unique experiences to offer visitors. Photo: Saudi Tourism Authority
The tech industry also benefits through collaborations with travel providers. The pandemic has led more travellers to virtual reality experiences. Countries like Germany and the Maldives have begun offering a series of virtual experiences to those unable to travel.
Now that a large percentage of the world’s population has been vaccinated and open to overseas travel, virtual reality options can be brought to airports and hotels for tourists who want to see it all but have limited days or other constraints. This will be especially useful for business travellers and transit passengers, who may not have enough time to visit attractions in person.
Collaborations with players outside the region, adoption of best practices from across the globe and targeted marketing campaigns to promote experiences the Gulf can contribute to tourist traffic.
Of course, we must not discount the region’s popularity as a destination for industry and trade events, especially given the launch of Expo 2020 Dubai. Businesses from several countries across various sectors are gathering to partner with others who have also suffered the fall-out of the pandemic.
Visitors to the Oman pavilion on the 10th day of Expo 2020, Dubai.
Expo 2020 Dubai is home to 10 chefs from the GCC. They include (from second left to right) Chef Nader Al Aisari from Oman and Qatar's Mohammad Najem. Victor Besa / The National
The theme of "Opportunity, Mobility and Sustainability" is very pertinent to our times and is a golden opportunity for nations in the GCC and the wider Arab region to demonstrate strengths and opportunities to potential partners.
The Oman pavilion is inspired by our nation’s iconic frankincense tree, or the luban in Arabic, and showcases the Sultanate’s socio-economic journey, inviting guests to learn from and engage with Omanis, who are keen to share their history, achievements and aspirations.
I am also proud to share that Investcorp, a leading global asset management firm, where I serve as executive chairman, is present at the Expo 2020 Dubai, offering opportunities for investors looking for asset managers with a nuanced understanding of the Arab region.
I anticipate many fruitful conversations, ideas and business deals coming out of Expo 2020 Dubai. It would be an excellent opportunity and in keeping with the theme for attendees in our region to brainstorm with representatives of tourism sectors in the GCC, network and use this platform to learn more about best practices from across the globe.
Recent times have presented challenges not witnessed earlier. Leaders in our region, however, have responded well to the pandemic and it is now time for citizens, public and private organisations to work towards a sustainable recovery.
The GCC has many jewels in its crown that make for an enriching tourism experience – from natural beauty and rich heritage to world-class resorts and attractions. If we pool the best of our resources we can respond to market needs and develop solutions that catalyse growth in tourism and strengthen our economies.
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”
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
YEMEN: “The developments we have seen are promising. We really hope that the parties are going to respect the agreed ceasefire. I think that the sense of really having the political will to have a peace process is vital. There is a little bit of hope and the role that the UN has played is very important.”
PALESTINE: “There is no easy fix. We need to find the political will and comply with the resolutions that we have agreed upon.”
OMAN: “It is a very important country in our system. They have a very important role to play in terms of the balance and peace process of that particular part of the world, in that their position is neutral. That is why it is very important to have a dialogue with the Omani authorities.”
REFORM OF THE SECURITY COUNCIL: “This is complicated and it requires time. It is dependent on the effort that members want to put into the process. It is a process that has been going on for 25 years. That process is slow but the issue is huge. I really hope we will see some progress during my tenure.”
Lightweight:
Alex Martinez (CAN) bt Anas Siraj Mounir (MAR)
Welterweight:
Jarrah Al Selawi (JOR) bt Abdoul Abdouraguimov (FRA)
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The specS: 2018 Toyota Camry
Price: base / as tested: Dh91,000 / Dh114,000
Engine: 3.5-litre V6
Gearbox: Eight-speed automatic
Power: 298hp @ 6,600rpm
Torque: 356Nm @ 4,700rpm
Fuel economy, combined: 7.0L / 100km
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.”
Company profile
Company: Verity
Date started: May 2021
Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif
Based: Dubai
Sector: FinTech
Size: four team members
Stage: Intially bootstrapped but recently closed its first pre-seed round of $800,000
Investors: Wamda, VentureSouq, Beyond Capital and regional angel investors
The biog
Year of birth: 1988
Place of birth: Baghdad
Education: PhD student and co-researcher at Greifswald University, Germany
Hobbies: Ping Pong, swimming, reading
Electric scooters: some rules to remember
Riders must be 14-years-old or over
Wear a protective helmet
Park the electric scooter in designated parking lots (if any)
Do not leave electric scooter in locations that obstruct traffic or pedestrians
