Cost of living in UAE drops as rents fall

The cost of living in the UAE continued to drop in the first-half of 2018, thanks to fall in rents, lower government public service fees, freeze and reduction in school fees and, most importantly, rising strength of the dirham against major currencies. It also improved residents’ purchasing power and quality of life.

According to mid-year Cost of Living Index released by Numbeo, Dubai and Abu Dhabi were rated 113 and 97, respectively, in the list of most expensive cities during the first-half of 2018 as compared to 72 and 93, respectively, during H1 2017. This reflects that the country’s two biggest emirates became more affordable for the residents and tourists.

The data showed that the purchasing power of Dubai residents improved from 101.67 points in H1 2017 to 153.68 in the first-half of 2018. While cost of living index improved from 73.95 to 53.32 during the comparative period. Among other sub-indexes, the emirate further improved its rating in safety index, healthcare index, property price to income ratio, pollution index and climate index during the comparative period. All these factors further improved the quality of life index as well in Dubai.

But Traffic Commute Time was the sole index where the emirate’s rating declined during comparative period.

While Abu Dhabi fared well in quality of life, safety and healthcare indexes but rating for purchasing power and traffic commute time indexes fell during the first-half of 2018 as compared to the same period last year.

Ambareen Musa, founder and CEO of Souqalmal.com, said that while VAT has driven up the prices of various products and services in the UAE moderately, a steady fall in residential rents has served as a cushion to keep inflation in check.

“Housing and utilities have the highest weightage in the UAE’s Consumer Price Index (34 per cent), and a look at CPI statistics shows a continuous decline in this category month-on-month,” Musa said.

She opined that wide-ranging policy measures by the UAE government including a three-year freeze on government public services fees and a Central Bank cap on banking fees among others, will also help boost consumer confidence and keep cost of living in check.

Robert Jackson, regional director, RICS, said most significant cost of living decrease has been prevalent in accommodation, whether residents are looking to purchase or indeed rent.

“With increased accommodation being added to the market, continued downward pressure on property costs and lease rates has helped the consumer. We have also witnessed many residents move to smaller and more affordable housing options as this sector has seen significant product delivery and in doing so, residents are encountering lower costs surrounding fees and utilities,” Jackson said.

He pointed out that there needs to be a balance between cost of living and earnings.

“The growth of Dubai revolves around the population growth (resident and short-term/tourism) and several of the fee reductions are aimed as stimuli to keep people in Dubai or attract people to Dubai. The details surrounding the 10-year visas and 100 per cent onshore foreign owned businesses are keenly awaited and could provide necessary incentive to keep the underlying population growth and job creation on an upwards trend,” he added.

According to property portal Bayut.com’s first-half 2018 figures, average apartment rentals fell moderately in Abu Dhabi with the largest decreased 9-10 per cent. Buyers and renters continue to have the upper hand in the Abu Dhabi property market, but price decreases are overall slightly more modest than in Dubai.

Haider Ali Khan, CEO of Bayut, said tenants and buyers are firmly in the driving seat, with renters likely to bargain with landlords to negotiate a lower rent, or upgrade by moving to a larger property or a new area.

“The decrease in sales prices opens up opportunities for buyers too. Whether you are renting or buying, it is a good time to make a move in the Dubai property market,” he said.

Vijay Valecha, chief market analyst at Century Financial Brokers, said a combination of government initiatives as well as a slump in real estate have contributed to the decline in the cost of living in the first-half of this year.

He emphasises that the recent government initiatives such as reduction in licensing fees for establishment and cut in municipality fees for hospitality sector get transmitted through the general economy to the residents and help in toning down the inflationary expectations.

“However, we should not forget the role of recent US dollar appreciation which has increased the purchasing power of UAE residents as dirham is pegged to the greenback. Looks like happier times are here for the people of UAE,” Valecha added.

Syed Ali Naqvi, authorised consultant, Nexus Insurance Brokers, says drop in rent and low inflation make Dubai more affordable for expats.

He noted that though there is a marginal increase in the prices of goods following VAT implementation, so people are now more circumspect in their expenditures.

Globally, according to Numbeo, European cities, especially Switzerland, dominate the list of the most expensive cities. Hamilton, Zurich, Basel, Lausanne, Bern, Geneva, Reykjavik, Lugano, Stavanger and Oslo round off the top most costliest cities in the world.

Waheed Abbas, July 18, 2018
https://www.khaleejtimes.com/

Saudi Arabia boosts fintech drive with UAE and Bahrain talks

LONDON – Saudi Arabia is discussing a coordinated approach to the regulation and nurturing of fintech startups with the UAE and Bahrain.

Such discussions form part of the Kingdom’s attempts to boost its nascent fintech ecosystem and to encourage the increased adoption of technology by incumbent lenders.

Discussions with central banks in the UAE and Bahrain would help to coordinate the fintech activities of financial centers around the Gulf region, all of whom are seeking to attract international and domestic entrepreneurs, said Mishari Al-Assailan, the acting head of Fintech Saudi, the division of the Saudi central bank charged with growing the sector in the Kingdom.

“We’re working on establishing some collaborations where we would give different assignments between different central banks and fintech hubs to develop a (common) GCC output when it comes to fintech,” he told Arab News.

Speaking at the “Unlocking the Fintech Scene in Saudi Arabia” event held in London on Friday, Al-Assailan said that it was important to develop a common approach to regulation among the region’s various fintech “sandboxes,” which enable startups to begin operating under a light-touch regulatory model.

“We’re all working today on excelling in our own sandboxes, but then there should be a GCC sandbox that ties into the rest of the Middle East,” he said.

“It’s hard to establish fintech firms (that can enter other markets) unless you have an infrastructure like the US that is quite open. We need to find a proper model for fintechs to jump in, get regulated quickly and if they do get regulated, everyone after them should use the same process.”

Saudi Arabia’s Capital Market Authority earlier this week approved the Kingdom’s first fintech licenses to Manafa Capital and Scopeer — both of which are fully Saudi-owned — to offer crowdfunding investment services on a trial basis.

The development of a fintech ecosystem is a significant component of Saudi Arabia’s Vision 2030 economic diversification strategy, and is seen as essential for broadening the country’s investment base and a transition toward a cashless digital economy.

Fintech initiatives in the Kingdom, however, have thus far trailed similar schemes launched in Bahrain and the UAE. Abu Dhabi Global Market launched its RegLab sandbox in November 2016, while fellow finance hub the Dubai International Financial Center launched “FinTech Hive,” the region’s first fintech accelerator program, in January 2017.

There are at present only about 20 Saudi fintech startups, according to Al-Assailan.

He conceded that the Kingdom had been slow to develop its fintech infrastructure in comparison with others, but expressed confidence that startups would be attracted by the size of the Saudi market.

“People used to go to the UAE and Bahrain because we didn’t have the infrastructure,” he said. “But most of those fintechs in the UAE and Bahrain want to sell into Saudi Arabia, because we have the market and the purchasing power and that by itself is an advantage for us.”

The new emphasis on fintech from Vision 2030 has subsequently made the Kingdom a more attractive destination for startups, according to an American fintech entrepreneur who has previously worked in Saudi Arabia.

“They’re coming late to the party, yes, but I don’t think that the timing is the only factor that will influence the companies that are looking to work in this space,” he said, asking not to be named.

“Obviously the UAE has a very well-developed ecosystem, but my experience is that with Vision 2030 Saudi Arabia now really wants to put its money where its mouth is.”

“The companies that have the really good ideas, if they’re knocking on the right doors, will find the support they need and probably more than you’d get in other countries.”

Fintech segments such as roboadvisory services, robobanking, crowdfunding and payment aggregation all offer significant growth opportunities, according to Al-Assailan.

In addition to the development of an ecosystem for startups, Fintech Saudi sees educating the Kingdom’s incumbent banks about the need to embrace technology in line with their counterparts in Europe, the US and elsewhere as important.

“It’s the future and it’s happening whether you like it or not,” he said.

“Banks need to realize that at some point you need to hire more developers than accountants into the bank, and that’s what we’re trying to preach.”

The development of robobanking lending facilities for the Kingdom’s SME sector was a particular priority, he said, given the central role of small businesses in Vision 2030.

“If we develop AI and robo capabilities to automatically approve and assign loans for SMEs and startups, this would boost the economy in a very efficient way,” he said.
Copyright: Arab News © 2018 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

13 JULY, 2018
By John Everington, Arab News

UAE economy likely to rebound in 2018

This will be driven by oil prices, an expansionary fiscal stance and an upswing in investment

The UAE economy is expected to grow faster in 2018, driven primarily by recovering oil prices, an expansionary fiscal stance and an upswing in investment ahead of Expo 2020.

Analysts at the Institute of Chartered Accountants in England and Wales (ICAEW) said the UAE’s GDP growth would bounce back to 2.6 per cent in 2018 after a difficult year, when growth slowed to a seven-year low to 1.5 per cent in 2017.

Last month, the Central Bank of the UAE lifted its growth forecast for the country’s non-oil GDP to 3.9 per cent in 2018 from 3.6 per cent on the back of improving domestic economic activity and better prospects for the global economy. The regulator said economic activity has continued to improve during the first quarter of 2018, underpinned by the revival of oil prices and a stronger growth in non-oil activity.

The accountancy and finance body in its ‘Economic Insight: Middle East Q2 2018’ report produced by Oxford Economics, however, warned that general prices are expected to increase as inflation will rise to four per cent this year.

“The UAE’s growth will be primarily driven by recovering oil prices, an expansionary fiscal stance at the federal and emirate levels, a buoyant trade and tourism environment and a pick-up in investment ahead of Expo 2020 in Dubai,” it said.

Michael Armstrong, ICAEW regional director for the Middle East, Africa and South Asia, said the UAE is on the right track to economic diversification and is implementing necessary fiscal reforms to support these efforts.

“The introduction of VAT is an important step towards diversifying government revenue and building tax capacity. We’re also encouraged by the recent announcements to reform business ownership laws and residency visa rules. This will definitely help in attracting more foreign direct investment and in creating more stability in the market,” said Armstrong.

“Oil sector growth is expected to be limited this year, especially given the UAE’s increasing compliance with the production cuts, which averaged 124 per cent in the first three months of this year,” the report said.

In 2017, the oil sector contracted by 1.6 per cent, mainly because of the Opec-plus mandate that saw the UAE cut its oil production by 150,000 barrels per day (b/d) from an average of 3.09 million b/d in fourth quarter 2016 to an average of 2.89 million in the fourth quarter of 2017, representing a drop of nearly 6.4 per cent.

The report said the non-oil sector on the other hand proved to be resilient last year despite the unfavourable macroeconomic environment and regional economic slowdown, growing by three per cent. “The non-oil sector is expected to grow 3.7 per cent in 2018, supported by improving business sentiments, a buoyant trade and tourism environment and higher public spending. Since the UAE is a highly open economy with trade value accounting for more than twice the country’s GDP, any growth in regional and global economic activity will contribute positively to the country’s economic output this year.”

According to the ICAEW, the outlook for the UAE’s tourism industry is highly positive.

“More positively, the UAE federal government is expected to increase spending by 5.6 per cent. Dubai, which traditionally accounts for 25 to 30 per cent of the UAE’s GDP, will lift spending by 20 per cent in preparation for Expo 2020, with the allocation for infrastructure alone leaping by 46.5 per cent. The UAE continues to be the top destination in Mena for inward FDI, attracting $11 billion in 2017,” said the report.

Mohamed Bardastani, ICAEW economic advisor and senior economist for Middle East at Oxford Economics, said Middle East economies will see a pick up in GDP growth this year and in 2019 but “this doesn’t mean we should let complacency set in”.

With growing global trade tensions, geopolitical risks and rising interest rates, economic reforms are more necessary than ever in order to ensure stronger, sustainable and inclusive growth,” he said.

By Issac John, Khaleej Times,  03 JULY, 2018

Copyright © 2018 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Saudi women driving could add $90bn to economy by 2030

Allowing Saudi women to drive could help the kingdom reap as much income as selling shares in Saudi Aramco.

The move, which went into effect on Sunday, could add as much as $90bn to economic output by 2030, with the benefits extending beyond that date, according to Bloomberg Economics. Selling as much as 5% stake in Saudi Arabian Oil Company at the most optimistic valuation could generate about $100 billion

Saudi Arabia ended its status as the last country on earth to prohibit women from taking to the wheel. A handful of women drove through the still-packed streets of the capital early Sunday while others drove in convoys around Riyadh neighborhoods in celebration of the ban’s end.

The decision would enable women to work without having to incur the cost of a driver or taxis.

“Lifting the ban on driving is likely to increase the number of women seeking jobs, boosting the size of the workforce and lifting overall incomes and output,” according to Ziad Daoud, Dubai-based chief Middle East economist for Bloomberg Economics.

“But it’ll take time before these gains are realised as the economy adapts to absorbing growing number of women seeking work.”

Ending the ban is one of the most socially-consequential reforms implemented by Saudi Arabia’s Crown Prince Mohammed bin Salman. It’s also a key part of his plan to veer the economy from its reliance on oil.

Zainab Fattah, Jun 24 2018
https://www.fin24.com

‘I pulled the car over and cried … It’s a dream,’ Careem’s first ‘captinah’

70% of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving

Reem Farahat waited for a ride request. Her phone pinged. “I’ve already cried twice,” she said, heading out to work as one of Saudi Arabia’s first female drivers for Careem.

The Dubai-based ride-hailing app, along with global behemoth Uber, reacted to Saudi King Salman’s September announcement of an end to the kingdom’s ban on female motorists by saying it would hire women in the conservative kingdom.

“This morning, when I got in the car, I felt the tears coming,” Reem said as she stocked her car with chilled water bottles for her riders.

“I pulled the car over and cried. I could not believe that we now drive… It’s a dream. I thought it would be totally normal, I’d just get in the car and go. I was surprised by my own reaction.”

She took a long pause.

‘I pulled the car over and cried … It’s a dream,’ Careem’s first ‘captinah’
70% of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving

Saudi national and newly licensed Reem Farahat an employee of Careem a chauffeur car booking service prepares for a customer shuttle using her car in the Saudi capital of Riyadh on June 24 2018 Photo: FAYEZ NURELDINE/AFP/Getty Images.
Reem Farahat waited for a ride request. Her phone pinged. “I’ve already cried twice,” she said, heading out to work as one of Saudi Arabia’s first female drivers for Careem.

The Dubai-based ride-hailing app, along with global behemoth Uber, reacted to Saudi King Salman’s September announcement of an end to the kingdom’s ban on female motorists by saying it would hire women in the conservative kingdom.

Saudi national and newly licensed Reem Farahat, an employee of Careem, a chauffeur car booking service, prepares for a customer shuttle using her car in the Saudi capital of Riyadh.
On Sunday, when the king’s decree took effect, nearly a dozen Careem “captainahs” – all Saudi women – were ready to pick up riders.

“This morning, when I got in the car, I felt the tears coming,” Reem said as she stocked her car with chilled water bottles for her riders.

“I pulled the car over and cried. I could not believe that we now drive… It’s a dream. I thought it would be totally normal, I’d just get in the car and go. I was surprised by my own reaction.”

She took a long pause.

“I didn’t expect it,” she said. “I’m doing this because I can. Because someone has to start.”

‘It’s you’
Seventy percent of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving.

Uber puts its equivalent figure closer to 80 percent.

At Careem’s offices on Sunday, staff gathered to celebrate the women’s first day on the job.

Farahat’s first ride request came just hours after the ban was officially lifted.

“This is my first ride. I’m excited. I’m excited to know who I’m picking up, what their reaction is going to be,” she said.

The driver – who also works with her father as a quality control consultant, is training in life coaching, and scuba dives with her sister off the Red Sea city of Jeddah – picked up Leila Ashry from a local cafe.

Walking towards the car, Leila spotted Reem, did a little jump of joy on the sidewalk, and was already chatting as she opened the door.

“Oh my god I can’t believe it’s you. I can’t believe you’re here. I can’t believe I’m here,” Leila said.

“I’ve been tweeting to my friends that my ride is coming and it’s a woman! And you’re so pretty! And I can sit in the front now – wait, can I actually sit in the front next to you?”

‘We automatically understand’
Some 2,000 women have signed up to get their Careem licenses since September, said Abdulla Elyas, co-founder and CPO – “chief people officer” – of the ride-hailing app. They are all Saudi women, from their 20s to their 50s.

Uber also plans to introduce women drivers to their service this autumn.

“They come from completely different backgrounds,” Elyas said.

“We have women who have degrees, a master’s degree. We have women who have no degree at all. We have women who want to do this full time. We have women who want to do this part time (for) an additional income, who are already working.”

Most of those who had been licensed by Sunday, like Reem, had permits from foreign countries, enabling them to skip driving courses and take the final exam for a Saudi license.

The “captainahs” can pick up any customer, man or woman.

Both the driver and rider have the right to end the ride at any point.

Leila, a young medical student with a pixie cut and bright smile, says she would still choose a woman.

“This automatically feels a lot safer… being a female and dealing with sexism on a day-to-day basis. There’s just something about it that feels wonderful. But it’s not only that. It’s also women joining the workforce,” she said.

Sitting in the front passenger seat, she recalled previous rides with male drivers.

“Before, sometimes they would stare at me from the mirror,” she said.

“It’s just like that thing we share with women, where we just automatically understand what it’s like to be in that position where you feel their eyes on you but you can’t say anything, you can’t do anything against it.”

She turned to chat to Reem, and sang a riff from a West Side Story tune before saying: “If you can do it, then I can do it.”

“See? That’s what I was talking about,” Reem said. “It’s that ripple effect.”

By AFP, 25 Jun 2018
http://www.arabianbusiness.com

Bahrain foreign direct investment grew 114% in 2017

Inflows of foreign direct investment (FDI) to Bahrain rose 114 percent in 2017, the fastest growth rate in the GCC, according to new data from the United Nations Conference on Trade and Development (UNCTAD).

The growth of FDI in Bahrain came even as global FDI fell 23 percent.

In a report, UNCTAD noted that the growth of investment in Bahrain was bolstered by a number of economic reforms, including amendments to the kingdom’s commercial properties law to allow 100 percent foreign ownership in certain sectors.

“Foreign direct investment creates jobs, diversifies the economy and fuels growth, so we are delighted to see such strong momentum, even against a challenging global backdrop,” said Khalid Al Rumaihi, the CEO of the Bahrain Economic Development Board (EDB).

“This proves the growing interest in the GCC opportunity is translating into investment.”

Al Rumaihi added that Bahrain has “undertaken a number of significant initiatives in the first half of this year to build on this success and we expect to announce a number of further measures in the coming months, helping investors to access the GCC opportunity.”

Among the recent developments in Bahrain were the launch of Bahrain FinTech Bay, the largest fintech hub in the MENA region, as well as the establishment of a $100 million ‘Fund of Funds’ to help start-ups across the Middle East.

Additionally, the country launched the $1 billion Bahrain Energy Fund, the first of its kind in the GCC which will provide institutional investors access to local energy assets.

By Bernd Debusmann Jr, 22 Jun 2018
http://www.arabianbusiness.com/politics

Saudi economy returns to growth on back of oil price rises

Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

Saudi economy returns to growth on back of oil price rises
Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

The Saudi economy pulled out of recession in the first quarter of 2018 thanks to oil price rises, a think-tank said Tuesday.

Capital Economics said the oil-dependent Saudi economy grew by 1.5 percent in the first quarter, after having contracted by 0.7 percent in 2017.

“The oil sector was the main driver of the recovery,” the London-based group said.

Oil prices surged to around $80 a barrel last month from under $30 a barrel in early 2016 after OPEC and non-OPEC producers struck a deal to cut output.

As a result of the crash in prices, the economy dipped into negative territory last year for the first time since 2009, a year after the global financial crisis.

The OPEC kingpin has posted a budget deficit in the past four years, and it has borrowed from domestic and international markets and hiked fuel and power prices to finance the shortfall.

Saudi economy returns to growth on back of oil price rises
Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

The Saudi economy pulled out of recession in the first quarter of 2018 thanks to oil price rises, a think-tank said Tuesday.

Capital Economics said the oil-dependent Saudi economy grew by 1.5 percent in the first quarter, after having contracted by 0.7 percent in 2017.

“The oil sector was the main driver of the recovery,” the London-based group said.

Oil prices surged to around $80 a barrel last month from under $30 a barrel in early 2016 after OPEC and non-OPEC producers struck a deal to cut output.

As a result of the crash in prices, the economy dipped into negative territory last year for the first time since 2009, a year after the global financial crisis.

The OPEC kingpin has posted a budget deficit in the past four years, and it has borrowed from domestic and international markets and hiked fuel and power prices to finance the shortfall.

It also introduced a five-percent value-added tax from the start of 2018.

The world’s top crude exporter has seen a key boost in its revenues after the recovery in oil prices.

Riyadh-based Jadwa Investment said Monday that Saudi fiscal reserves rose by $13.2 billion in April, marking its largest monthly increase since October 2013.

The reserves stood at $506.6 billion in April, down from $732 billion at the end of 2014.

Since 2014, Saudi budget deficits have totalled $260 billion and the government is projecting a 2018 shortfall of $52 billion.

By AFP, 05 Jun 2018
http://www.arabianbusiness.com

Dubai property market expects mid-term rebound

In mid-April the Dubai Land Department (DLD) issued its quarterly report on real estate transactions, which showed there had been 13,759 sales, mortgage agreements or other deals conducted in the first three months of the year.

The total value of the transactions reached Dh58bn ($15.8bn), with the bulk of that figure – Dh30.6bn ($8.3bn), or 3717 agreements – comprised of mortgages. A further Dh19bn ($5.2bn) was posted in direct sales, with just over 950 transactions recorded, while other transfers accounted for Dh8.4bn ($2.3bn).

The first-quarter results fell short of those posted for the same period in 2017, when some 20,000 transactions were conducted, worth a combined Dh77bn ($21bn).
Nonetheless, foreign interest in the property market remained reasonably strong, with overseas investors accounting for more than 5000 transactions, well over one-third of the quarterly total.

Despite a slower first-quarter year-on-year, an increase in activity is expected later in 2018, according to Sultan Butti bin Mejren, director general at the DLD.
“Achieving almost Dh58bn ($15.8bn) in transactions shows strong momentum in the real estate sector for the first quarter, and we expect this to raise the second-quarter transaction index and continue to rally before the end of the year,” he told media.

Muted forecasts for growth in property transactions

While first-quarter figures suggest market activity will need to accelerate if year-end 2018 results are to match those of last year, when 69,000 transactions worth a total value of Dh285bn ($77.6bn) were registered, some analysts have challenged recovery forecasts.

Ratings agency and financial services firm S&P, for example, suggests the Dubai property market could remain flat or lose ground this year, pointing to falling prices and rising supply as a challenging combination.

Rents and sales prices in the residential and retail segments were likely to ease further in 2018, after falling by between 5% and 10% last year, the agency said in a report issued in February.

Residential supply levels expanded by an estimated 3800 units in the first quarter, according to data from property consultancy Cavendish Maxwell, with new retail land office space also being rolled out in the opening months of 2018.

Mortgage changes to raise investment interest

Increasing supply across all real estate sectors in Dubai is affording occupiers a widening choice of location and quality. This choice has caused some landlords to reduce their pricing in order to remain competitive. “The market is very sensitive to pricing and in spite of a significant increase in transaction volumes in 2017, I expect values to decline during 2018 as landlords and tenants try find a new level of pricing to reflect new and forthcoming supply levels,” Nicholas MacLean, CEO of real estate consultancy CBRE, told OBG.

To help address the imbalance, the authorities are introducing measures to facilitate real estate transactions. In late April the DLD announced plans to develop a new mortgage and finance law designed to attract further investment to the sector. The legislation is expected to allow specialised funds, such as real estate investment trusts, to enter the Dubai market more easily.

VAT relief supports investor confidence

Prospects for expanded financing opportunities under the upcoming mortgage law came fast on the heels of another move designed to stoke investor confidence.

In late March the DLD and the Federal Tax Authority stated that all real estate transactions will be exempt from the newly imposed 5% value-added tax (VAT), with the exception of sales of vacant commercial properties and commercial property leases. Furthermore, leased commercial property will not be considered a supply during its sale by the taxable person and will therefore not be taxable.

The statement added that up to 85% of all elements of the Dubai real estate sector would not be subject to the new levy.

There had been concerns in the lead up to the introduction of the broad-based goods and services tax that most, if not all, real estate transactions would have the 5% VAT applied.

The general exemption of most components of the property market could boost confidence in the sector and encourage further investments.

By Staff Writer, Oxford Business Group
31 MAY, 2018
© Oxford Business Group 2018

Bahrain tops Middle East for work-life balance – survey

Bahrain is the second best country in the world for expat work-life balance, behind only Denmark, according to a new report from InterNations.

In its “Expat Insider” survey – which queried over 12,500 respondents in 188 countries – InterNations found that 46 percent of expats cited work-related reasons for moving to Bahrain, while 69 percent said they were satisfied with work-life balance.

Additionally, 72 percent of respondents in Bahrain reported being satisfied with working hours, which averaged 42.9 hours a week, compared to the global average of 44.3 hours.

Of the respondents in Bahrain, 73 percent said they were “generally satisfied” with their work, while 36 percent said they were “completely satisfied”.

Denmark was ranked first for work-life balance, followed by Bahrain, Norway, the Czech Republic, New Zealand, Sweden, Costa Rica, the Netherlands, Oman and Malta.

In Oman, 43 percent of expats reported moving to Oman for work-related reasons, and 60 percent said they were generally satisfied with their job.

U.A.E. Backs 100% Foreign Ownership of Local Companies

The United Arab Emirates is abandoning decades of restrictions on foreigners owning companies and settling in the Gulf country to help lure money and talent in a slowing economy.

The new rules, reported by the state-run WAM news agency, include allowing non-Emiratis to control a company outright and offering residency of up to 10 years to specialists in medical, scientific, research and technical fields and top students. The changes will take effect by the end of this year.

It’s the biggest recognition yet that the second-largest Gulf economy is more reliant than ever on foreign investment and an expatriate workforce at a time when the oil-dependent region faces challenges rarely seen since the 1990s.

It follows legislation in neighboring Qatar last August that granted some foreigners the right to remain indefinitely as it adapts to a yearlong embargo on the country led by Saudi Arabia and other Arab nations including the U.A.E.

Like in most other Persian Gulf states, a majority of the U.A.E.’s population of 9 million consists of foreigners who are expected to leave once their employment ends and many send earnings abroad. In 2017 alone, expatriates remitted 164 billion dirhams ($45 billion), according to WAM.

“There seems to be a clear shift in policy to supporting economic activity, boosting investment and putting in place a framework to future development,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. The measures could help by increasing “investments levels, population inflows, development of new sectors especially in the technology front and reducing remittances out of the country,” she said.

While Abu Dhabi and especially Dubai have thrived on tourism, financial services and as airline hubs, the U.A.E. government is turning to science and technology to ensure the country can keep growing. The growth rate in the economy has slowed to levels last seen in 2010 and the real estate market has a glut of empty apartment blocks.

Changes to ownership rules are a significant departure from the policy of restricting foreign ownership outside so-called free zones such as the Dubai International Financial Centre. Foreigners seeking to establish businesses outside those zones, which are exempt from most local rules, must seek partnerships. U.A.E. citizens have to own 51 percent of the ventures.

“We expect a significant positive effect on foreign direct investments,” said Jaap Meijer, managing director and head of equity research at investment bank Arqaam Capital Ltd. in Dubai. “The decision should also help net immigration, which should significantly alleviate the current pressure on housing markets.”

The benchmark stock index in Dubai climbed as much as 1.4 percent, the most since April 15, before trimming the gain to 1 percent at the close. The gauge in Abu Dhabi rose 0.7 percent.

By Abbas Al Lawati, May 20, 2018,
https://www.bloomberg.com