Abu Dhabi’s move to slash business set-up fees by 94 per cent will strengthen its position as a destination for new ventures and boost foreign direct investment into the emirate, economists say.
In addition to improving the emirate's competitiveness, the Abu Dhabi Department of Economic Development's initiative to reduce fees to Dh1,000 will create more jobs and support small and medium businesses across several sectors, bolstering the emirate's non-oil economy, they said.
“The objective is to attract FDI to support different sectors of the economy, alongside developing new industries that will lead future growth,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “It certainly makes Abu Dhabi attractive to new ventures and start-ups.”
The new fees are applicable to six activities within the business licence and will cover all fees from Abu Dhabi government entities.
Licence renewal fees have also been reduced to Dh1,000. The new fees structure will be effective from July 27, 2021 but all federal fees will continue to apply, the economic department said on Sunday.
“It is a strong move at a time when competition between the major business centres in the Gulf [region] is becoming more intense,” said Scott Livermore, chief economist at Oxford Economics. “These are important steps forward.”
The latest government initiative needs to be taken in conjunction with other measures, said Ms Malik.
To boost its non-oil-economy and support businesses, especially SMEs, Abu Dhabi unveiled the Dh50 billion Ghadan initiative. It also introduced visa reforms geared to attract more investors.
The emirate has also unveiled several packages to cut the cost of doing business during the pandemic. It provided rent rebates, discounts on utility bills and loan guarantee packages to businesses and SMEs and over the past year.
In 2020, the government also detailed a plan to stimulate economic growth through strategic investments and 16 initiatives to support the private sector.
"More than each measure by itself, it is the accumulative impact of these moves that is making the change in the UAE, as whole, and [in] the emirate,” said Ms Malik.
Abu Dhabi has adopted a “very proactive overall stance” and “the clear focus, not only from this measure but also from others, is on strengthening the business environment, lowering costs and increasing the ease of doing business”, she said.
Despite Covid-19 headwinds and a global economic slowdown last year, the emirate is in a strong fiscal position to extend support to businesses.
Abu Dhabi's economic fundamentals and large fiscal buffers are supported by revenue from the hydrocarbon sector, S&P Global Ratings said in June when it affirmed its investment grade rating.
Its economy is expected to grow by between 6 per cent and 8 per cent over the next two years, driven by government spending, financial services and foreign direct investment, Mohammed Al Shorafa, chairman of Department of Economic Development, said earlier this year.
The latest move also aligns with the government’s policy to support diversification of the economy “through modern sectors such as digital and creative industries where competition for to attract these firms is becoming more intense”, said Mr Livermore.
The objective is to attract FDI to support different sectors of the economy, alongside developing new industries that will lead future growth
Monica Malik,
chief economist, Abu Dhabi Commercial Bank
“This is not just about attracting new investors from outside Abu Dhabi, however, but also encouraging expats already in Abu Dhabi to invest in the economy,” he said.
SMEs across several sectors of the Abu Dhabi economy will “significantly benefit from the decision to sharply reduce business set up and license renewal fees”, said Jaap Meijer, managing director and head of research at Dubai investment bank Arqaam Capital.
Companies interested in procuring supply contracts from the government also stand to benefit as the latest incentive lowers the cost of establishing a local presence and will support the emirate’s push to develop its in-country value programme, Mr Livermore said.
The reduction in business set-up fees and increased foreign investment will create “new jobs and more opportunities, which leads to an increase in income and more purchasing power”, which in turn will lead to an overall boost to Abu Dhabi’s economy, said Hettish Karmani, head of research at Muscat-based U-Capital.
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Read more about the coronavirus
GULF MEN'S LEAGUE
Pool A Dubai Hurricanes, Bahrain, Dubai Exiles, Dubai Tigers 2
Pool B Abu Dhabi Harlequins, Jebel Ali Dragons, Dubai Knights Eagles, Dubai Tigers
Opening fixtures
Thursday, December 5
6.40pm, Pitch 8, Abu Dhabi Harlequins v Dubai Knights Eagles
7pm, Pitch 2, Jebel Ali Dragons v Dubai Tigers
7pm, Pitch 4, Dubai Hurricanes v Dubai Exiles
7pm, Pitch 5, Bahrain v Dubai Eagles 2
Recent winners
2018 Dubai Hurricanes
2017 Dubai Exiles
2016 Abu Dhabi Harlequins
2015 Abu Dhabi Harlequins
2014 Abu Dhabi Harlequins
Find the right policy for you
Don’t wait until the week you fly to sign up for insurance – get it when you book your trip. Insurance covers you for cancellation and anything else that can go wrong before you leave.
Some insurers, such as World Nomads, allow you to book once you are travelling – but, as Mr Mohammed found out, pre-existing medical conditions are not covered.
Check your credit card before booking insurance to see if you have any travel insurance as a benefit – most UAE banks, such as Emirates NBD, First Abu Dhabi Bank and Abu Dhabi Islamic Bank, have cards that throw in insurance as part of their package. But read the fine print – they may only cover emergencies while you’re travelling, not cancellation before a trip.
Pre-existing medical conditions such as a heart condition, diabetes, epilepsy and even asthma may not be included as standard. Again, check the terms, exclusions and limitations of any insurance carefully.
If you want trip cancellation or curtailment, baggage loss or delay covered, you may need a higher-grade plan, says Ambareen Musa of Souqalmal.com. Decide how much coverage you need for emergency medical expenses or personal liability. Premium insurance packages give up to $1 million (Dh3.7m) in each category, Ms Musa adds.
Don’t wait for days to call your insurer if you need to make a claim. You may be required to notify them within 72 hours. Gather together all receipts, emails and reports to prove that you paid for something, that you didn’t use it and that you did not get reimbursed.
Finally, consider optional extras you may need, says Sarah Pickford of Travel Counsellors, such as a winter sports holiday. Also ensure all individuals can travel independently on that cover, she adds. And remember: “Cheap isn’t necessarily best.”
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