Business Reform and Growth In the UAE: Afif Mshangama says Smart Investing Required High-Level Advisory
As we near the end of the fiscal year in 2022, expert economists and financial forecasters have suggested that the world economy may enter into a long-lasting global economic recession
Despite such projections, Dubai continues to attract global investors with an annual growth rate of 7.2 per cent and an estimated GDP growth of 5.9 per cent (approximately $27.8 billion) in 2022.
According to Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, the UAE's response to Covid-19, investor-centric policies, tax-free incentives, strategic efforts and policy reforms have been pivotal in attracting major companies and high-profile investors to relocate or set up subsidiaries in the UAE.
The past calendar year has seen an influx of high-profile CEOs relocating to the emirate to set up companies, however, only a few expert consultants and agencies have been able to cater to this special niche of people that require personalised consulting and high-level advisory.
"Dubai has now become a city where the world elite's are relocating not just because of corporate incentives but also because of the lifestyle and safety that the country has to offer. These people require professional representation, complete anonymity, trust and financial expertise. They can't just ring anyone to help them. They require someone who knows and understands them" says Afif Mshangama, CEO of Nextcap, a UAE-based firm that specialises in assisting high-profile people relocate to the UAE.
In a recent interview with Challenges magazine, Mshangama identifies the UAE as a lucrative country for French citizens to relocate and according to HSBC's 14th annual Expat Explorer study, the UAE was ranked the world's fourth-best place to work and live. The UAE was also listed at number 11 in the Brand Finance global brand Strength Index. This position beats the US and the UK which certainly challenges the western status quo.
Perhaps advisors such as Mshangama have forecasted the economic and social growth of the nation and have responded with a powerful solution to address the demand for this type of specialised consulting.
Response to Covid-19
In 2019, when the pandemic swept through the entire world, the UAE was one of few countries that responded to the crisis with a strategy that primarily focused on helping its residents to safely resume their everyday life as soon as possible.
Mshangama added: "The UAE has become a major international hub that has been growing consistently in its influence and status since the pandemic. The world witnessed the UAE's response to covid-19 which showed effectiveness, progressiveness and competence. Fundamentally, this effective response to the pandemic has earned the UAE a global reputation for resilience and crisis management."
Additionally, the UAE has provided more than 1,740 tonnes of aid to 128 countries to assist 1.75 million medical workers responding to the coronavirus since January of 2021.
The UAE has set a great example of crisis management in its response to the pandemic, exhibiting great leadership.
Policy reforms for a post-pandemic world
In 2019, in the wake of the pandemic, many visa amendments were introduced in the UAE including the golden visa initiative.
The 10-year visa is granted to investors, entrepreneurs and skilled professionals that earn a monthly salary of more than Dh30,000 ($8,166). These skilled people include exceptional talents, scientists and professionals, outstanding students and graduates, property investors, humanitarian pioneers and front-line heroes.
A green visa for skilled employees who hold a bachelor's degree or equivalent offers a five-year residency without the need for a sponsor or employer. Additionally, a new five-year retirement visa was introduced for expatriates older than 55.
In March 2021, the UAE introduced a one-year digital nomad visa that allows people to live in the Emirates while continuing to work for employers in their home countries.
During this period, the UAE also decriminalised alcohol and lifted the ban on unmarried couples living together.
In addition, foreigners living in the Gulf state will also be able to follow their home country’s laws on divorce and inheritance, rather than using UAE legislation based on Islamic religious law.
Mshangama says "These reforms have made expats feel safe and accustomed to the laws in the UAE as they are similar to many laws in their own countries. The golden visa has been very useful to our clients that were interested in acquiring it and we have facilitated several of these visas for them."
In September, a survey by health insurance company Cigna saw that the UAE ranked number one across the Middle East, Africa and Asia, and was among the top 10 countries around the world for expatriates to relocate.
Reforms for a better business climate
The UAE has overhauled its commercial laws to attract more foreign capital and investment. A major decision was annulling the requirement for onshore companies to have an Emirati shareholder and/or partner. The provision mandating for a UAE national or a UAE-owned company as an agent has also been annulled. Furthermore, the stipulation that requires a company chair to be an Emirati and the board of directors to be an Emirati majority has also been removed.
The amendments to these laws have improved the business environment within the UAE and have safeguarded the conditions of foreign investment in the country. These reforms have enabled investors to feel more secure being involved in vital projects for the economy, increasing the attraction of foreign companies and attracting foreign investment to the country’s vital economic sectors.
In addition to these reforms, local authorities shall retain the power to determine the degree of participation by Emiratis in any company. Companies in strategically important sectors, including oil and gas exploration, utilities and transport, as well as state-owned entities, are exempt from such changes.
Legal advisor Mshangama says: "These reforms have improved the business climate in the UAE and investors are more confident to relocate their companies here. We educate our clients on these laws and reforms as well as the cost of opening a company in whichever emirate we recommend. It varies in accordance with the activity of the business. Our aim is to wisely advise our clients to make the best decisions for themselves and their respective companies."
The future looks promising
The UAE, the Arab world's second-largest economy, has undertaken several economic, legal and social reforms in recent years to strengthen its business environment, attract foreign investment and skilled workers, and provide incentives for businesses to operate within the country.
With the UAE government continuing to reform its policies in the best interest of local and foreign investors, the nation is expecting to remain a global leader in economic growth in 2023, anticipating growth of approximately five per cent.
In a business landscape that is difficult to navigate with frequent reforms, high-level advisors such as Mshangama and Nextcap are valuable consultants for new investors seeking to relocate to the UAE.