After the turbulent economic impact of the Covid-19 pandemic, business confidence is once again growing in Dubai. A significant factor impacting the economic recovery is the Expo 2020 Dubai, which started in October. As a result, the improvement in business conditions looks set to continue through 2021 and well into 2022.
What has led to this increase in confidence in Dubai’s business community? Why can overseas investors and foreign companies be sure that investing in Dubai is a good move at this time? To find the answers to these questions, please read on.
Response to the Coronavirus Pandemic
The UAE and Dubai were not immune to the coronavirus crisis. However, specific actions taken by the Emirates’ government prevented waves of outbreaks that other countries experienced. For example, high vaccination rates and widespread testing had a positive impact on the economy. This, in turn, led to an increase in business confidence and boosted economic prospects along with sustainable growth.
Economic Incentives Boosted Business Confidence
Business initiatives to encourage foreign investors are another reason why Dubai has been experiencing strong economic growth since the Covid-19 coronavirus pandemic. In addition, changes to the laws mean that 100 per cent foreign investment is allowed, and there is no need for a UAE representative.
Increase in Business Confidence in Dubai
Several factors have positively affected Dubai’s economy, which is why business confidence in Dubai is at a seven-year peak.
Dubai Economy has issued thousands of new licences, which has instilled confidence in business leaders. By September 2021, 6,928 licences had been issued — a 68 per cent increase on the previous year. Most new licences were for professional and commercial sectors, with only one per cent for the tourism industry.
Here are some facts and figures showing why a favourable business environment has developed in Dubai since the Covid-19 crisis:
- Business registration is up 12 per cent compared to September 2020
- Thirty-six per cent of new licences were for sole establishment companies
- Dubai Chamber of Commerce and Industry reports that 83 per cent of business leaders expect conditions to improve significantly by the end of 2021
- More than half of investors expect the recovery in oil prices to improve the economy
Expo 2020 Dubai boosts business confidence
Growing optimism in Dubai’s economy is partly due to Expo 2020 Dubai. Many investors see the six-month-long event as a way to fast-track Dubai’s economic revival. It will also attract millions of investors and foreign companies to the Emirate.
Ahead of the Expo opening, confidence was high regarding its impact on the economy. For example, A survey by the Dubai Chamber found that 78 per cent of business investors believed the event would benefit their business. In addition, the Purchasing Manager Index (PMI) was 51.5, which is the highest three-month average since before the coronavirus pandemic.
Other significant factors boosting business confidence in Dubai include higher oil prices, new business incentives, and the Emirates’ success in dealing with Covid-19 related challenges.
Additionally, thanks to Expo 2020 Dubai, a boost in tourism, hospitality and the trade sectors will inject money into the local economy.