An unexpected “Brexit” result triggered a plunging Sterling and equity price falls. A weaker Sterling has already impacted asset values although one would hope that this would correct over time. Reduced asset values could attract inward investment to the UK – property being particularly attractive for UAE residents. On the other hand, uncertainty tends to have a detrimental impact on corporate investment decisions. This may be particularly so if another Scottish referendum arises. Closer to home, the weaker Euro and now a weaker Sterling may impact tourism in the UAE, and any related retail spend.
Over the last few years Dubai has been focussing on developing the service and knowledge economy. The Dubai Industrial Strategy now looks to expand the manufacturing sector, further diversifying the GDP. Six sectors have been identified – aerospace, maritime, aluminium & fabricated metals, pharmaceuticals & medical equipment, food & beverage and, lastly, machinery & equipment. By 2030 some 27,000 new jobs are to be created and the sector is to grow by AED18 Bn
There has been a further development on VAT with the announcement that companies with more than AED 3.75 million in revenue will need to register, and it will be optional for companies with revenue in excess of AED1.87 million. Companies for which it is optional will need to balance the cost of absorbing VAT on their expenditures with the cost of implementing VAT systems. It may be the small companies that are least able to afford to absorb costs, but they may not be able to register until later. Also, see the update on VAT in this issue.
Finally, I think sighs of relief could be heard with the announcement of the deferral of the implementation date for the new UAE Commercial Companies Law. It is important now that companies seriously start the process of amending their articles of association to comply with the new requirements. The recent clarification on the applicability of some clauses to private companies has been most welcome in this regard. We may even see some more in the near future.
In this issue we feature an interview with Mr. H.C. Gandhi, founder and Managing Director of MH Enterprises Group. We also have our usual updates from the UAE and Oman.
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