|21 July, 2018

Investment Hub: Dubai to announce more business reforms in September

These will attract more foreign investment and reduce cost of doing business

Modern architecture Gate Tower, DIFC, Dubai. Image used for illustrative purpose.

Modern architecture Gate Tower, DIFC, Dubai. Image used for illustrative purpose.

Core Savills/Handout via Thomson Reuters Zawya

Dubai is set to announce a second round of incentives and measures in September to attract more foreign investment, reduce cost of doing business, stimulate economic growth and boost the emirate's gross domestic product higher than 3 per cent, a senior official said on Saturday.

Speaking at a seminar, Dr Raed Safadi, chief economic adviser, Department of Economic Development in Dubai, said the new set of measures would benefit all.

"For 2018, growth above 3 per cent is the objective; we're working on another basket of initiatives which will be announced in September and by then, the impact of the first package will also be felt. In the first phase, we'll announce what had been the result of the first basket. Then, there will be a second round of initiatives and it will benefit all of you," Dr Safadi said.

Dubai has announced a host of measures in the last few months such as reducing municipality fees, waiving penalties and fines, payment for licence renewal in installments, freezing of school fees for 2018-19, among other initiatives. On a federal level, the UAE announced 100 per cent foreign ownership in onshore entities, 10-year-visa for professionals and investors, among others.

Dr Safadi revealed that the Dubai Chamber of Commerce and Industry is looking at its structure and membership fees with a mandate to reduce it and initiatives will soon be announced.

He said the upcoming micro and macro measures are aimed at continuing the push to accelerate the economy's growth, reducing the cost of doing business, making the economy more competitive and making it knowledge-based.

However, he refused to elaborate about the new measures that would be announced. Dr Safadi was speaking at a seminar organised by the Institute of Chartered Accountants of India - Dubai chapter.

Earlier, Naveen Sharma, chairman, ICAI (Dubai chapter), addressed the audience while tax experts briefed attendees about the recent updates on VAT and how to automate VAT returns through Excel.

According to Dr Safadi, the recently announced measures have been welcomed by big companies as well as SMEs.

In reply to a question about the eligibility for 100 per cent foreign ownership in mainland companies, he pointed out that there would be certain requirements such as minimum investment and the number of jobs to be created by the new company.

He said the key criteria of this new law is to attract investors and would be very generous to bring in all kind of talent as the emirate seeks a transition towards a knowledge-based economy. He ruled out any impact on free zones from this full ownership law on the mainland.

He emphasised that attracting investments ranks at the top of the government's agenda.

"If we can't promote investment, there will be no new job creation and growth acceleration. Therefore, attracting investment is at the heart of the policies," he said, adding that "all the initiatives that have been announced are cohesive and point to one direction and that is that we want to see: investments and productivity going up in a sustainable manner. There is a realisation that meeting the objectives of 2020 needs some push to realise the target set by the leadership."

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