Gulf nations have shifted to adopting a global minimum tax of 15 per cent for corporations, yet particular incentives are keeping multinationals invested despite the region's main attraction of being a known as a tax-free environment.
Historically, the region’s low tax rates were an important part of its strategy to lure multinational corporations looking to tap into its strategic location, cheap energy and expanding markets. Up until last year, the UAE had no federal corporate tax. Now, it has a corporate income tax of 9 per cent.
The Organisation for Economic Co-operation and Development's set a global standard for global companies in late 2021 in agreement with 136 countries to compel large multinational enterprises to pay a minimum tax rate of 15 per cent in each of the countries they operate within. This year, a number of Gulf countries stated they will follow this policy in January of 2025.
Kuwait decided on Tuesday to move ahead with the tax in the new year, after a cabinet decision led by the country's prime minister. Bahrain still maintains a zero per cent corporate tax rate for most sectors in 2024, the principal exceptions being oil and gas. In contrast, Oman moved earlier, introducing a corporate tax rate that met the OECD minimum in 2017. Since Saudi Arabia, Qatar and Bahrain are part of the same OECD agreement, chances are that these Gulf nations will eventually raise corporate tax rates as well.
This means that Gulf states can no longer rely on solely competitive taxes as a big selling point to attract multinational companies and foreign investors. Instead, these countries are taking a nuanced approach to attract foreign investment by enhancing their packages with targeted subsidies, typically in the form of tax exemptions for certain investments.
For example, Saudi Arabia is offering a 30-year tax exemption to foreign companies setting up regional headquarters in the kingdom, with zero corporate tax and no withholding tax during that time.
Moreover, the UAE’s Finance Ministry has announced plans for corporate tax incentives, including one aimed at boosting research and development starting in 2026. The incentive would offer a refundable tax credit of 30 per cent to 50 per cent, depending on the company’s size and revenue within the UAE.
This recalibration is aimed at reinforcing the Gulf’s competitiveness in a global market where tax rates alone can no longer differentiate regions looking to lure foreign capital. While these changes represent a shift, they are not expected to deter committed investors or multinationals. For global businesses, the key is to integrate the new tax framework into a broader evaluation of the region’s offerings.
Competitiveness in the Gulf is shaped by much more than tax policy – it includes low energy costs, world-class infrastructure and a high quality of life. These factors collectively create a framework that remains attractive to many multinationals.
Big western names are making bold moves in the Gulf. Morgan Stanley is shifting its Middle East headquarters to Saudi capital Riyadh, while hedge fund Marshall Wace is setting up shop in Abu Dhabi to tap the region’s investor base.
Energy heavyweights like Shell, BP, TotalEnergies and Mitsui have backed a major new initiative to boost liquefied natural gas production in the Gulf, run by Adnoc.
In the consumer sector, US beauty brand Kosas recently entered the Gulf via Sephora, taking advantage of the region’s high-spending beauty market.
The Gulf has emerged as a hotspot for all sorts of companies seeking growth opportunities. But for businesses aiming to establish or expand operations here, understanding the Gulf’s long-term vision and aligning with it is critical for success.
Saudi Arabia has raised the stakes, requiring multinational companies to set up regional headquarters in the kingdom to bid on government contracts.
At the heart of this vision is a drive to attract foreign capital – not just for financial gain but for the talent, intellectual property and technology that often come with it.
These statistics highlight the region’s growing success in attracting global investment as part of its economic diversification push.
Diversification of revenues away from fossil fuels is an important driver of government strategies in the Gulf. The UAE and Saudi Arabia are driving ambitious plans like Saudi Vision 2030 and UAE Centennial 2071 to cut their reliance on oil and reshape their economies.
Both nations are steering toward a broader commercial base, with major investments in artificial intelligence, renewable energies and logistics. The shift away from oil and gas reflects a broader adaptation to the ongoing energy transition and an effort to assert the Gulf’s relevance in a competitive global economy.
Events like Abu Dhabi Finance Week underscore this ambition. ADFW 2024, held from December 9 to 12, brought together some 20,000 delegates, collectively representing more than $42.5 trillion in assets under management, to discuss topics ranging from economic and cultural capital to technological and environmental innovation.
For businesses looking to set up or expand in the Gulf, aligning with the region’s economic priorities is a necessity. Governments are backing companies that contribute to their long-term plans for economic diversification, innovation and localisation – hiring nationals and sourcing from local firms.
Those that align with this vision stand to gain the most – through incentives, partnerships and access to a market that rewards strategic collaboration. In an increasingly competitive global economy, the Gulf’s invitation is clear: do not just bring capital, but offer ideas, expertise and ambition.
HOW%20TO%20ACTIVATE%20THE%20GEMINI%20SHORTCUT%20ON%20CHROME%20CANARY
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ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Top financial tips for graduates
Araminta Robertson, of the Financially Mint blog, shares her financial advice for university leavers:
1. Build digital or technical skills: After graduation, people can find it extremely hard to find jobs. From programming to digital marketing, your early twenties are for building skills. Future employers will want people with tech skills.
2. Side hustle: At 16, I lived in a village and started teaching online, as well as doing work as a virtual assistant and marketer. There are six skills you can use online: translation; teaching; programming; digital marketing; design and writing. If you master two, you’ll always be able to make money.
3. Networking: Knowing how to make connections is extremely useful. Use LinkedIn to find people who have the job you want, connect and ask to meet for coffee. Ask how they did it and if they know anyone who can help you. I secured quite a few clients this way.
4. Pay yourself first: The minute you receive any income, put about 15 per cent aside into a savings account you won’t touch, to go towards your emergency fund or to start investing. I do 20 per cent. It helped me start saving immediately.
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
The specs
Engine: 3.8-litre V6
Power: 295hp at 6,000rpm
Torque: 355Nm at 5,200rpm
Transmission: 8-speed auto
Fuel consumption: 10.7L/100km
Price: Dh179,999-plus
On sale: now
COMPANY%20PROFILE%20
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RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
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RESULTS FOR STAGE 4
Stage 4 Dubai to Hatta, 197 km, Road race.
Overall leader Primoz Roglic SLO (Team Jumbo - Visma)
Stage winners: 1. Caleb Ewan AUS (Lotto - Soudal) 2. Matteo Moschetti ITA (Trek - Segafredo) 3. Primoz Roglic SLO (Team Jumbo - Visma)
Directed by Sam Mendes
Starring Dean-Charles Chapman, George MacKay, Daniel Mays
4.5/5
UAE currency: the story behind the money in your pockets
If you go
The Flights
Emirates and Etihad fly direct to Johannesburg from Dubai and Abu Dhabi respectively. Economy return tickets cost from Dh2,650, including taxes.
The trip
Worldwide Motorhoming Holidays (worldwidemotorhomingholidays.co.uk) operates fly-drive motorhome holidays in eight destinations, including South Africa. Its 14-day Kruger and the Battlefields itinerary starts from Dh17,500, including campgrounds, excursions, unit hire and flights. Bobo Campers has a range of RVs for hire, including the 4-berth Discoverer 4 from Dh600 per day.
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Company Profile
Name: JustClean
Based: Kuwait with offices in other GCC countries
Launch year: 2016
Number of employees: 130
Sector: online laundry service
Funding: $12.9m from Kuwait-based Faith Capital Holding
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
HWJN
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
The five pillars of Islam
U19 WORLD CUP, WEST INDIES
UAE group fixtures (all in St Kitts)
- Saturday 15 January: UAE beat Canada by 49 runs
- Thursday 20 January: v England
- Saturday 22 January: v Bangladesh
UAE squad:
Alishan Sharafu (captain), Shival Bawa, Jash Giyanani, Sailles
Jaishankar, Nilansh Keswani, Aayan Khan, Punya Mehra, Ali Naseer, Ronak Panoly,
Dhruv Parashar, Vinayak Raghavan, Soorya Sathish, Aryansh Sharma, Adithya
Shetty, Kai Smith
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
MATCH INFO
Schalke 0
Werder Bremen 1 (Bittencourt 32')
Man of the match Leonardo Bittencourt (Werder Bremen)
HOW TO WATCH
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Killing of Qassem Suleimani
How Voiss turns words to speech
The device has a screen reader or software that monitors what happens on the screen
The screen reader sends the text to the speech synthesiser
This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen
A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB
The speech synthesisers VOISS develops are free
Subsequent computer versions will include improvements such as wireless keyboards
Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser
Partnerships planned during Expo 2020 Dubai to add more languages
At least 2.2 billion people globally have a vision impairment or blindness
More than 90 per cent live in developing countries
The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device
Quick%20facts
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Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
The bio
Favourite vegetable: Broccoli
Favourite food: Seafood
Favourite thing to cook: Duck l'orange
Favourite book: Give and Take by Adam Grant, one of his professors at University of Pennsylvania
Favourite place to travel: Home in Kuwait.
Favourite place in the UAE: Al Qudra lakes
