Fast, easy and transparent from the word go.

The UAE allocated $572 million (AED 2.1 billion), 3.4% of the total general budget, towards the financial investments sector, including $205 million (AED 753 million) which will go towards federal investment projects.

The federal government, which sold its first bond in its half-century history in 2021, returned to international bond markets last October with the CBUAE receiving bids worth $2.1 billion (AED 7.57 billion). The debt is rated Aa2 by Moody’s— the third-highest investment grade and one step lower at AA- by Fitch Ratings.

Sustaining growth

The increased global uncertainty is driving foreign investment inflow into the UAE while contributing to rapid real estate price growth in some segments. The country is set to host the World Trade Organisation’s (WTO) 2024 ministerial conference, the largest global gathering of trade ministers.

The gathering scheduled for February 2024 will come at a critical time as the global economy is being confronted by a confluence of challenges including the war in Ukraine, an ongoing pandemic and a simmering trade war between the US and China—the world’s two biggest economies.

For the Emirates, hosting WTO’s 13th ministerial conference is part of a broader strategy by the government to burnish its credentials as a global hub for business. The government has been rolling out bilateral trade deals with fast-growing markets since the pandemic.

The UAE signed a wide-ranging economic pact with India in February 2022. The trade pact, called CEPA, removed duty on almost 90% of goods traded between the two states and it is expected to boost bilateral trade from $60 billion to $100 billion within the next five years.

The Gulf state is home to some of the world’s biggest wealth funds including Mubadala Investment Company, Abu Dhabi Investment Authority, ADQ and Investment Corporation of Dubai.

Buoyed with cash from last year’s commodity boom, the UAE is investing billions of dollars in Egypt, Indonesia, Sudan and Jordan to diversify its economy away from crude.

Structural reforms

In a major policy shift, the UAE said that it will levy a 9% federal corporate tax on business profits exceeding $102,110 (AED 375,000) for the first time starting 1 June 2023, as the Gulf state moves to align itself with new international standards, particularly the move toward a global minimum tax on multinational corporations.

by scrapping a law that required an Emirati shareholder or agent when foreigners are opening a company in the country. The UAE’s new company law came into effect last June and it is expected to boost the country’s economic competitiveness.

The UAE plans to offer Emirati citizenship and passport to a set group of foreigners, including investors, professionals, and special talents – a first in the Gulf region as the government looks to give its huge expat population a bigger stake in the economy to drive growth. The country also approved regulations on the entry and residence

The ambitious plan, which will see the UAE ditching the tax-free regime that made it the Middle East’s business hub, aims to eventually set 15% as the base levy to stem international competition to offer more attractive rates.

Fitch Ratings cautioned that the UAE’s federal corporate tax could have uneven credit implications on rated corporates, with privately-owned corporates and government-related entities rated on a bottom-up basis most affected.

Moody’s also said that although the introduction of a corporate tax will broaden the federal government’s income base, it would negatively affect the credit profiles of companies operating in the country.

The government also revamped its Commercial Companies Law of foreigners last April formalising a process aimed at giving expatriates a bigger stake in the economy.

The Gulf state’s residence schemes and entry permits now include the golden residence scheme, green residence, five-year residence visa, job exploration entry visa as well as multi-entry business and tourist visas that do not require sponsorship.

Over the years, the UAE has implemented a raft of economic and structural reforms, including issuing citizenship to foreigners, to attract investment, foreign talent, enhance competitiveness and maintain its global trade and business hub status amid growing competition from its equally ambitious Gulf neighbours.