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Looking To The Future

December 2018 | Servcorp

 

 

In the same way as the visionary economies of Singapore, China and South Korea, the UAE has clearly crystallised its future vision for the nation's economic growth. The Abu Dhabi Vision 2030 and the Dubai Industrial Strategy 2030 are already creating a diverse, forward-thinking platform for expansion, and the contents of the celebrated UAE Vision 2021 blueprint have already been generating powerful infrastructure initiatives for half a decade. Yet, in a country already ranked 21st in the World Bank's Ease of Doing Business Report, few would have predicted the dramatic announcement by the UAE Cabinet - on September 30th - of the largest-ever Federal Budget. This explained that the fiscal year of 2019 will have a budget of no less than Dh60.3 billion - an increase of 17.3 per cent from this year’s Dh51.4bn.

This is quite simply the largest federal budget in the country’s history, and takes a notably citizen-first approach, in which Social Development programmes receive Dh25.5bn (42.3 per cent of the 2019 budget), Education will receive Dh10.25bn (17 per cent), and the Healthcare sector will receive Dh4.40bn (7.3 per cent). In addition, in the Cabinet session Chaired by HH Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, a budget of no less than Dh180bn for 2019-2021 was also approved.

Striking in themselves, these announcements are actually the culmination of a series of bulletins from the Government in 2018, spanning fiscal and procedural issues, and aimed at helping both individuals and businesses alike. Many of the proposed changes and reforms benefit the SME sector in particular, introducing as they do factors helpful to businesses with limited cashflow and giving fresh routes to staff retention and business ownership.

When discussing the September 30th budget announcements, HH Sheikh Mohammed explained that "The citizen is our top priority" and this is very much a theme apparent throughout the series of reforms in the first nine months of 2018.

The quest for a visa

One of the areas that has seen the most dramatic change is the new scope offered by selected categories of visa. Visa regulations can either be a limiting or an empowering force when it comes to the ability of a business to attract and keep good quality staff - and here, the news has been overwhelmingly positive.

For example, on May 20th, 2018, the UAE Government announced the arrival of a new 10-year visa for investors and professionals in medical, scientific, research and technical fields (along with their families). This dramatic step was allied to the further announcement in the same month of a five-year residency visa for students - and a 10-year option for students proven to be outstanding in academia, sport or special skills. What is perhaps most significant here is the direct planning for the future talent pool - and the vision of what a strong student culture can go on to deliver to the nation's economy in the medium term.

The greater flexibility and confidence this gives to professionals was mirrored company-side with a cluster of highly significant reforms. For example, as of June 13th, 2018, companies no longer have to pay AED3,000 deposit when recruiting a new employee.  Instead, they pay only AED60 for an annual insurance policy for the employee, which will cover end of service benefits, vacation allowance, return tickets and also redeem up to AED20,000 of insurance cover per worker. They also have a better chance of finding staff with the right professional fit, since at the same time, job seekers were granted the bonus of a six-month visa without fees, and for those changing jobs, any alteration in visa status can be handled without having to exit the country. A considerable change which makes life for employee and employer alike a good deal simpler, faster and more affordable.

A major sea-change:100% foreign ownership