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Signs and portents look good for foreign business start-ups in the UAE!
So what signs or portents would make you look seriously at the United Arab Emirates as a possible location to set up a new business? Indications, perhaps, might be a better word to use.
How about the cautious optimism reported by the majority of MENA banks over potential growth in the region in 2013? Would that make you sit up and take note? Or the fact that UAE car sales are reportedly up a staggering 30% in 2012 compared to last year? Make you stop and think?
Then there's the Cities of Opportunity report, compiled annually by PricewaterhouseCoopers (PwC), analysing the current performance of 27 cities at the centre of finance, commerce and culture across the world. Abu Dhabi makes the list big time, with the report projecting growth in the city's business services of around 9% over the next 10 or 12 years. Not bad at all.
Although international banking – and more specifically business banking – may provide the oil which keeps the wheels of commerce and economic growth turning, a vibrant, forward-looking domestic banking sector is no less vital to the health and well-being of any nation.
Take the 2012 third-quarter figures posted by Abu Dhabi Islamic Bank (ADIB), one of the most liquid banks in the UAE. According to the figures, ADIB net profits were up 3% when compared to the same quarter last year, with its customer base up an incredible 10%. During the period, too, it opened its 73rd retail branch and installed its 522nd ATM. Impressive. Signs and portents of growing consumer confidence?
No less impressive is the continued success story of the UAE's free zones. According to Ernst & Young's inaugural Middle East Attractiveness Survey, early data from 2012 suggested the Gulf Cooperation Council “trio” of the UAE, Saudi Arabia and Qatar attracted the majority of foreign direct investment (FDI) projects, with the UAE leading Saudi Arabia in terms of project numbers and value.
According to the data, one of the top choices for investors was business services, a sector gaining in popularity because of the growing need to support the ever-increasing numbers of businesses setting up in the free zones. The sector accounted for no less than 16% of total FDI projects, ranking second in terms of numbers and third in terms of value.
The top choice for investors was retail and consumer products, attracting more than 20% of FDI projects, a reflection of the region's expanding consumerism. Real estate accounted for the largest slice of the FDI cake in terms of capital investment. All good reasons, if any were needed, for at least thinking about setting up a company in the UAE?
Here are one or two more good reasons, just to throw in the mix. No personal tax and no corporation tax. Yes, you won't have to pay either if you set up a business in a UAE free zone. No trade barriers or quotas or foreign exchange controls to bother about. Negligible import duties, too. Energy costs? Competitive. Real estate costs? Competitive. Financing costs? Competitive.
No wonder thousands of businesses have decided to set up in the UAE, a location which more than any other puts companies slap bang in the middle of today's emerging markets. Shouldn't you be a part of it? Shouldn't you be there? The signs and portents are sure looking good!