The UAE’s business scheme has a very interesting overview as it has a very well-established infrastructure, a stable political system and a liberal trade regime in the whole Gulf region. UAE is a relevant, important and very attractive market to businesses from around the world to set a business in as it has a diversified economy and not like other GCC economies that are largely run by the oil sector.
Unlike UAE, KSA’s economy is quite an oil-reliant with the largest proven crude oil reserves in the world! KSA’s economic growth will keep strengthening with the ongoing economic structural reforms. In order to boost economic growth and its market value, KSA expanded the budget for 2019 with focus on capital expenditure.
UAE’s Plan to Boost Investment – The “Golden Card”
After most of the Gulf’s stock markets became accessible to foreign direct investment, they were upgraded to ‘emerging market’ status; this helped them in getting more sizeable investments. Some of these gulf emerging markets have made moves to attract even more foreign capital, high-end technical expertise and advanced technology.
An example of this, is how the UAE and KSA both have taken major steps to offer a stable environment to international investors by offering privilege and long term residency schemes. This allows the investors as well as their families to enjoy a secured stay in the countries.
According to the report by the International Monetary Fund (IMF), GCC countries have seen a significant outflow of remittances in the last decade which is around $120 billion in 2018. Despite the flexible investment systems, some analysts have considered GCC economics to be very competitive when it comes to attracting foreign investment. Why was that? Because before there were restrictions on the movement and settlement of these investors who ended up finding more favorable opportunities in other locations and that affected the balance of payments and size of GNP of Gulf states.
Therefore, UAE’s cabinet approved to give permanent residency in the form of “Golden Card” to more than 6500 investors with a total investment of Dh100 billion, to help them stay longer in the UAE and keep their investments. This move will definitely attract large investments and also positively contribute to the economic environment of the UAE.
You may wonder how the terms of this long term residency contributed to improving Dubai business and Dubai investment? It offers 5-10 year visas to investors, entrepreneurs and people of special talents. They no longer need to have sponsors to give them permits to stay in the UAE and will have 100% ownership of their businesses. This is really encouraging for the investors and entrepreneurs to now permanently stay in the UAE and expand their businesses without relying on the local sponsors – which was seen as a hindrance or a disadvantage before. The investors can also call in their families now in UAE to settle and create a future.
KSA’s Residency Plan
Saudi Arabia also has a new residency plan which is similar to USA’s Green Card Lottery of 2016, and it is aimed at attracting foreign investment and people with high skills, expertise/competencies. According to KSA’s minister of trade, this scheme will work against the high level of commercial concealment in the country and benefit more than 3 million people generating more than $10 billion.
Both schemes will encourage the competitiveness of KSA and UAE markets both globally and regionally because the schemes are in line with their vision and joint coordination for their futures. This is because both systems are focusing on attracting capital and trying to place a high premium on the skills that are needed by modern economies.
In summary, these schemes will definitely lead to a very positive outcome of the economic situation of both countries and boost their diversification and competitiveness.
The Need for Effective Communication
Considering the definite rise of foreign investments in the future, countries will require effective communication between each other. When business deals are involved, it is imperative that documents and communications are understood with precision and clarity even if they are in different languages.
One of the factors that will help to solve this communication issue, is to hire a professional translation service providers. Companies like Torjoman with an expert team of translators who have experience and knowledge of this kind of business is considered an added value in this situation. So if you’re thinking of starting a business in the UAE, KSA or any other GCC countries, or already running a business there, consider hiring a professional translation service provider for a smooth communication involving multiple languages.