UAE business environment encourages innovation and growth – News

file photo

DUBAI – Both Abu Dhabi and Dubai share common goals and economic strategies to create a thriving business environment.

Recently, the Abu Dhabi Department of Economic Development (ADDED), after consulting with various other government entities, including the Abu Dhabi Chamber of Commerce and Industry, announced the reduction of the business establishment fee in the emirate of Abu Dhabi to AED 1,000, a drop of more than 90%. %. The license renewal fee has also been reduced to AED 1,000. According to ADDED’s media announcement, the new fees cover six activities within the business license and will cover all fees for Abu Dhabi government entities such as ADDED, the Ministry of Municipalities and Transport, membership fees for the Abu Dhabi Chamber of Commerce, CoC (Certificate of Co-operation) Regulatory) issuance fees and fees required by Abu Dhabi regulated entities depending on the type of business. Some fees have been eliminated entirely, while others have been significantly reduced.

This is a very welcome move that will further support small and medium-sized businesses as they manage costs during the pandemic, resulting in lower revenues. It also supports the Abu Dhabi government’s efforts to create a more prosperous business environment for the private sector, especially micro, small and medium enterprises.

All GCC governments are working to diversify their economies away from oil and strongly promote business in all non-oil sectors, as improving their ranking in the Doing Business report will help attract global businesses to set up offices here. Most recently, Saudi Arabia developed a new business district in Riyadh and in February issued an ultimatum to foreign businesses that they must have their regional headquarters there by 2024 or face losing lucrative government contracts risks of.

In such an environment, Abu Dhabi’s reduced set-up costs and simplified renewal fees will strengthen the UAE’s strong position in the World Bank’s global ranking of countries on the ease of doing business. As of 2020, the UAE ranks 16th out of 190 countries for business regulations and competitive advantage. Abu Dhabi’s current move to flat fees will increase transparency and reduce management of businesses, which will improve the UAE’s competitiveness relative to other GCC countries in attracting regional and international players.

Both Abu Dhabi and Dubai share common goals and economic strategies to create a thriving business environment that encourages growth and innovation. It is important to note that easier doing business is associated with increased entrepreneurship and the creation of better jobs, higher government taxes and higher personal income.

In the absence of broad corporate and personal income taxes, some would argue that lower fees would further reduce government revenue and could put pressure on the nation’s fiscal deficit and ultimately its credit rating. However, we believe that the increase in economic activity in the country will ultimately pay off more than the loss of license fee revenue against the backdrop of stronger business confidence.

Still others may see Abu Dhabi’s lower licensing fees as a threat to Dubai’s dominance of the region’s commercial headquarters. While Dubai may lose some business to Abu Dhabi, in the larger scheme Abu Dhabi’s lower fees will put the UAE in a better position than other GCC countries and will help gain More investors/businesses choose the UAE over other GCC countries, which will ultimately benefit Dubai and Abu Dhabi. We also note that Abu Dhabi is more likely to host businesses related to oil and gas, mining, quarrying and manufacturing, while Dubai is more suitable for businesses related to logistics, retail and tourism. Therefore, Emirates is likely to complement each other rather than compete directly.

Anita Yadav is the Chief Executive Officer of Global Credit Advisory Ltd. The views expressed are her own and do not reflect the policy of the newspaper.