Dubai: The United Arab Emirates is preparing to introduce effective programmes to support and encourage small to medium sized enterprises (SMEs) in addition, to mediating the integration of big Multi-National Corporations with SMEs, Abdullah Bin Ahmad Al Saleh, Undersecretary for Foreign Trade and Industry Affairs, Ministry of Economy said a fortnight ago.
Sharjah FDI Forum, where the fourth Industrial Revolution was the central theme of the conference, was attended by more than 1,500 business leaders, public sector representatives and government officials from the region and beyond attended the forum to find out about the current trends and developments affecting the future of investment in the UAE, with numbers participating a significant increase on last year’s event. They also discussed the ways and means through which the UAE and Sharjah can attract more FDI.
Al Salah said on the closing day of the FDI forum “The government must play a major role in the national march towards increasing our FDI attractiveness”
“The UAE is investing heavily in research and development and public-private partnerships, which highlight a strong and vibrant national economy committed to increasing competitiveness at an international level,” he stated.
Per the World Investment Report 2017 by the United Nations’ Conference on Trade and Development, the UAE ranked first among recipients of FDI in Arab countries and 12th top recipient globally. FDI inflows to the country grew by around 2.2% in 2016 to hit $9 billion, with total inflows of roughly $16 billion in 2016.
“A clear political and cultural vision that supports FDI’s role in development, flexible regulations, smart government services, protection from corruption, and allowing a free flow of capital, human resource, goods and services were among the essential components for FDI attractiveness,” Al Saleh.
On the first day of the conference Minister of Economy, Sultan Bin Saeed Al Mansouri said the ambitious policies aim to increase the diversification of national economy and achieve sustainable growth.
The United Arab Emirates has attempted to get its economy off oil; by 2021, the non-oil sector will contribute 80%, compared to the current 70% contribution.
“UAE continues to implement ambitious development policies based on further diversifying national economy and developing sectors capable of achieving high productivity and sustainable growth, with a focus on knowledge, innovation, modern technology and scientific research as drivers of economy,” Al Mansouri stated.
“Increasing our attractiveness of FDI lies at the heart of these policies, due to FDIs’ importance to promoting diversity and pumping cash into economy, stimulating trade and improving economic climate,” he added.
Bank of Baroda’s Dr Anil K. Khandelwal, a former Chairman and managing director, spoke about sustainability at the cost of profits, stating that “corporates need to work with a telescopic vision, which is far-reaching, and act with microscopic actions that do not miss out on the granular aspects that make the real difference.”
In addition, Adel Al Ali, Group CEO at Air Arabia, said sustainability is a direct result of a healthy, profit making economies. “Profits are good for sustainability, for the environment, society and of course the stability of an economy. Profits in business will translate into more employment opportunities, higher standards of living, cleaner environment and so on. Only good economies can protect our future. Do you think a poor country will care about cleaning their rivers?” Al Ali said.
VAT in the UAE
The Sharjah FDI Forum also discussed the preparation by retailers for the Value-Added Tax, which will be effective from January 2018.
“The government has done a fantastic job in trying to assist again and again, but we are just 100 days away from this tax and I would estimate that only 40 per cent of businesses are ready,” said Gurdeep Singh Randhay, Director and Head of Tax at Grant Thornton.
“Some companies have made a lot of effort, but because there has been a tax-free environment for so long, there is a certain ambivalence — ‘we’ll worry about it in January’, which is obviously not workable,” he added.