Even with low commodity prices investor confidence in the United Arab Emirates (UAE) remains high, growing by more than $1.5 billion from 2013 to 2015. Ok, you know that part of the story. What you might not know are the reasons why. Part of the growth story is due to vision of the emirs who run the country. Other reasons include robust investment promotion policies, infrastructure investment, and then there is the country’s location at the crossroads of east and west.
There is no doubt that Dubai and Abu Dhabi tend to get most of the attention. But the emirs of all seven emirates that make up the UAE deserve credit for the country’s economic growth. One hallmark of their policies have been their pro-western, pro-investment stance which has set the country apart from riskier destinations in the region. The truth is that the emirs have embraced open markets and this has paid off.
One emir who has played a key role in transforming the country is Sheikh Saud bin Saqr al Qasimi. During his reign, he has extended the accomplishments of his father to turn Ras Al-Khaimah into an economic powerhouse. The Sheikh is American educated and has helped to pivot the UAE away from the undue influence regional super powers and embrace of foreign investment.
Ras Al Khaimah, in particular, has been ranked as one of the Top 10 Small- and Mid-Sized Global Cities of the Future by FDI Intelligence. In 2015 it ranked as the ninth for human capital and lifestyle, and friendliness, seventh for economic potential, and fifth for connectivity.
The high rankings are a direct result of the investor-friendly policies implemented by the UAE. These include opening Free Trade Zones (FTZ) which allow for full foreign ownership. In addition, company establishment in the UAE is a fairly efficient process. This has helped the country score high marks from the World Bank’s Ease of Doing Business report.
However, investors do need to make sure they understand the relevant laws which will impact their businesses in the UAE. Some of these include the Commercial Companies Law and the Trade Agencies Law. Whilst FTZs make it possible to set up a company without local partners, there are times when it makes sense to have an experienced local partner on board and it is often a good idea to bring on legal and tax advisors who have an intimate understanding of the UAE.
The entire region is known for its oil riches. But leaders of the UAE have begun to focus on innovation over oil as they see this as the future of their country. This approach has started to pay off as Forbes recently ran a list of the most promising startups in the country.
A big reason for the push into innovation is the UAE’s connectivity with the rest of the world. Nearly three billion people live within a six-hour flight of the country. This means that ideas can be easily shared with the rest of the word. Not unlike the role of Arab traders in times gone by.
The UAE’s position at the crossroads of east and west is major reason why the country has invested billions into upgrading its infrastructure and services. The flag carrier – Emirates – is known around the world for quality and service, and Dubai airport is now the third busiest airport in the world.
It’s not just Dubai, other emirates have been busy upgrading their airports, roads, ports, hospitals, and education systems. For example, the education cluster in Ras Al Khaimah hosts the UAE campuses of a number of internationally recognized institutions.
This includes an Innovation Hubrun by Google. The goal is to help prepare teachers and students in STEM (Science, Technology, Engineering, and Math). This will help to increase competitiveness which will ultimately attract more investors. It’s a virtuous cycle which is vital for the development of a vibrant startup scene.
The UAE is where east meets west. It has been this way for centuries and with the push into innovation and services, it looks set to remain this way. Even with its ideal location, the emirs who oversee the country are not willing to rest on their laurels. Instead, they are continually working to enhance the country’s competitiveness by ensuring stability and implement investor promotions which make sense. It’s no wonder that investors are flocking to the country and maybe you should consider one of the emirates for your MENA hub.