Investment opportunities in the UAE

Currently ranking 4th in the 2021 Best Countries to Invest In, the UAE is regarded as one of the world’s top investment destinations. It has a thriving international market, tax-friendly policies, and a solid social and economic framework. With excellent infrastructure facilities, exceptional human resources and services, and a focus on smart governance, it provides an ideal business environment for investors and entrepreneurs.

Why invest in the UAE?

There are many benefits to doing business in the UAE. It offers a stable and secure environment as well as investor-friendly legislation making it an attractive global hub for investors. UAE is also known not only for its advanced infrastructures and technology but also for its rewarding lifestyle and great talents. Investment opportunities in the UAE are on the rise, and investors can choose from a variety of investment tools, including stocks, bonds, mutual funds, ETFs, and REITs.

Top reasons why you should invest in the UAE:

Priority Areas

  1. Research and Development

The percentage of GDP spent on research and development in 2020 was 1.3%. In 2021, the UAE awarded AED 40 million in research funding to 53 projects across eight key sectors. Recent campaigns and initiatives have been launched to support R&D in the UAE, including the R&D Governance Policy, which was announced in 2021 followed by the establishment of the Emirates Research and Development Council. The Abu Dhabi government fund worth AED 4 billion (USD 1.09 billion) was created to boost research and development. This fund provides rebates for R&D expenditures and costs of new Abu Dhabi-based activities. High demand for R&D is expected in the cybersecurity, artificial intelligence, and health sectors. Expanding international R&D partnerships to boost capacity will remain a key focus of the UAE Government.

  1. Healthcare

Between August 2016 and August 2021, the UAE healthcare sector attracted foreign direct investments worth USD 784 million. UAE’s health and community protection budget allocation in 2022 is AED 4.766 billion (8.09% of total budget). Additionally, the current healthcare reforms are in line with various plans being developed at the emirate level to improve healthcare services. There has been an increase in medical tourists in the UAE, seeking treatments ranging from major surgery to rehabilitation and cosmetic procedures. From 2020 to 2021, Dubai and Abu Dhabi ranked sixth and ninth on the Medical Tourism Index as global medical tourism destinations.

  1. Real Estate

There are many opportunities in UAE’s real estate market, including development, property management, and brokerage. In order to boost investor interest, the UAE government has introduced various investment initiatives, relaxed laws, and new real estate projects. Real estate consultancy Knight Frank reports that many second-home buyers and investors are now coming from South America and Eastern Europe, as well as Monaco, Austria, Switzerland, India, Singapore, mainland China, the UK, and the GCC.

  1. Food and agriculture

In the UAE, only 10.5% of the food consumed is produced locally. In order to encourage investors in the food and agriculture sector, the government has now made foreign ownership of 100% possible. Efforts are being made by the government to improve the country’s food security system by promoting cooperation with other countries, diversifying sources, and attracting foreign investment. A 60% reduction in licensing costs under the National Food Security Strategy has also been introduced. Food production and manufacturing special economic zones and free zones such as the Khalifa Industrial Zone also offer incentives for investors.

  1. E-commerce

The UAE is the leader in e-commerce in the GCC with nearly 100% of the market population having access to the internet and mobile phones. According to forecasts by Statista, e-commerce sales in the United Arab Emirates will reach 27 billion U.S. dollars in 2022. Between 2018 and 2022, UAE e-commerce sales are expected to grow 23 percent annually. A new set of e-commerce regulations has been implemented by the Dubai Free Zones Council (DFZC) in 2018 that allows greater FDI to flow into the e-commerce sector in Dubai.

Investment for Women Entrepreneurs in the UAE

The UAE has also seen a 200% increase in female investors in 2021 and women-led startups have raised $34.6 million. In the newly released report ‘Women, Business and the Law’ (WBL), the UAE topped the rankings for women’s equality initiatives in the MENA region. The country’s efforts to empower women, innovative policies, and business-friendly environment have resulted in such achievements. Free zones in UAE such as SHAMS and RAKEZ have launched the business women package which offers various incentives for women entrepreneurs.

If you’re thinking about investing in the UAE, keep in mind that it might be different from your usual experience. Be clear about what you expect and what you want, and most importantly, understand the market. Additionally, you need to be familiar with the laws and legal procedures when investing in the emirates. Having nearly 20 years of experience in Europe, Southeast Asia, and the Middle East, Strohal Legal Group advises national and international clients on domestic and cross-border transactions, including private M&A, private equity and venture capital transactions, public and private takeovers, corporate investments, and the formation of consortia, joint ventures, and strategic partnerships.

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