ABU DHABI // The UAE announced the allocation of US$4 billion (Dh14.7bn) to Egypt on Friday as Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, wrapped up a visit to Cairo.
Half of the sum would be an investment and half a central bank deposit to support cash reserves, the UAE state news agency Wam said.
Sheikh Mohammed said the aid, authorised by President Sheikh Khalifa, showed the UAE was firm in its support for Egypt.
The money was aimed at promoting development in Egypt, which has a “pivotal role” in the region, Wam quoted Sheikh Mohammed as saying.
Sheikh Mohammed flew to Egypt on Thursday after attending GCC summits in Riyadh with US president Barack Obama and King Mohammed VI of Morocco, to discuss cooperation with Egypt on regional security threats and counterterrorism as well as economic support for the regional ally.
The Crown Prince and Egyptian president Abdel Fattah El Sisi discussed “security challenges that aimed to destabilise the region, violence and extremism as well as acts of terrorist groups”, Wam said.
“They stressed the importance of concerted efforts, cooperation and solidarity against the threats of foreign interference that aim at undermining the foundations of stability and security in the Arab region, and the need for a strong and effective platforms for joint Arab action that will confront the sources of threat and eliminate the dangers of extremism and terrorism in the region,” it said.
The report implied that both ISIL and Iran were topics of discussion.
Sheikh Mohammed’s visit followed a trip to Cairo earlier this month by Saudi Arabia’s King Salman that was widely seen as an attempt, in part, to put to rest reports of ongoing tension between Cairo and its Gulf Arab supporters.
The UAE, Saudi Arabia and Kuwait have spent billions of dollars supporting Mr El Sisi’s government after the former military commander removed the Muslim Brotherhood-backed president Mohammed Morsi in 2013 in the wake of large popular protests against his rule.
While there may have been adjustments to the terms of the Gulf’s financial aid – Reuters reported this month that Saudi aid would now come in the form of return-bearing loans – the visits by the Gulf leaders demonstrate that the mutual interests outweigh concerns.
Egypt, the largest Arab country, is a key member of the 34-nation military coalition led by Riyadh that carried out large exercises last month. The drills were ostensibly aimed at fighting extremists such as ISIL, but were also a show of strength aimed by Saudi at Iran. Cairo also backed a communique issued during the recent Organisation of Islamic Cooperation summit that condemned Tehran’s “interference in the internal affairs” of a number of regional countries.
Egypt’s economy relies heavily on its tourism industry which has been decimated by political turmoil since 2011 and more recently, terrorist attacks including the bombing of a Russian jetliner that had taken off from Sharm El Sheikh.
The Red Sea resort was the venue of an investor conference in March last year where the UAE, Kuwait and Saudi Arabia each offered Egypt $4bn. Sheikh Mohammed bin Rashid, the Prime Minister and Ruler of Dubai, said at the time that his country’s investment would included a $2bn deposit in Egypt’s Central Bank, with the rest used to fund projects to be announced later.
Egypt has struggled to spur economic growth since its 2011 uprising ushered in political instability that scared off tourists and foreign investors, key sources of foreign currency. Earlier this month, Cairo and Riyadh signed a pact to set up a 60-billion Saudi riyal (Dh58.7bn) investment fund.
The UAE has taken a hands-on role in helping Egypt reform its economy and has helped launch joint state-backed development projects.
“President El Sisi reviewed the roadmap and the most important and vital development projects achieved so far across Egypt, referring to the government’s efforts to attract investments and projects that will develop the national economy,” Wam reported “He welcomed UAE investors in Egypt … [and] appreciated the position of the UAE in support of Egypt through its contributions to the development in Egypt.”
Cairo has been badly stretched battling ISIL-allied insurgents in the Sinai as well as along its border with Libya, and counter-terrorism cooperation was also a key element of the discussions.
foreign.desk@thenational.ae
* With reporting from Reuters
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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
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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.”
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