Interview: Sami Al Qamzi
How has the introduction of value-added tax (VAT) affected government revenues and allowed for the provision of more data on the emirate’s economy?
SAMI AL QAMZI: The successful and carefully planned introduction of VAT will contribute to the realisation of the UAE’s goal of reducing its reliance on oil revenues and investing to strengthen sustainability, enhance its integration into world markets and transition to a diversified, innovative, knowledge-based economy. VAT revenues are therefore an important contributor to the fiscal consolidation efforts under way in the UAE, and are broadly in line with expectations. As the standard tax period that has been set is three calendar months, this gives authorities timely, detailed information about overall economic performance, including at the sector level. This is an invaluable form of information that supplements other data sources, which include surveys and business engagement events and activities, that the authorities can analyse in detail before designing policies that best make use of government resources.
To what extent is the continuously rising cost of living in Dubai and the UAE a cause for concern for both businesses and residents?
AL QAMZI: Our continued efforts at fiscal consolidation, including subsidy reduction and the implementation of VAT, have exerted upward pressure on prices. The government has responded with a series of policy initiatives to counteract these forces. These include waiving fees for delayed property registration, and commercial penalties and fines imposed by the DED for any violations. There have also been reductions in municipality and hotel fees, payment of certain government fees in instalments and freezing private school fees for the 2018/19 academic year, as well as the allocation of 20% of government tenders to small and medium-sized enterprises. Further initiatives are being considered targeting Duabi’s strategic sectors.
What are the expectations of the new 10-year residence visa given to some professionals?
AL QAMZI: The 10-year residence visa for some professionals was introduced to add to the UAE’s attractiveness as the preferred destination for top international talent. It will be granted to individuals rather than to sectors and aims to attract specialists in medical, scientific, research and technical fields, and innovators. Exceptional students studying in the UAE will also be granted a 10-year residence visa, and all other students will be permitted to stay for five years.
How do you envisage the new policy allowing 100% foreign ownership of onshore companies changing the existing free zone model for investors?
AL QAMZI: The 100% foreign ownership law is a landmark law that will put pressure on non-financial free zones to refocus their value proposition away from ownership in the medium to long term. For financial free zones, their value proposition extends beyond foreign ownership and includes legal and regulatory benefits for investors. It is important to note, however, that the 100% foreign ownership law will be prescribed under certain conditions, such as the extent to which the investment responds to Dubai’s ongoing transformation to a knowledge-based economy.
In what ways are programmes such as the Dubai Blockchain Business Registry Project expected to boost ease of doing business in the emirate?
AL QAMZI: As the first trade licence repository using blockchain technology, it will enable the Unified Commercial Registry project to store and update company registration information issued by the DED and free zone authorities. By streamlining the process of setting up and operating a business, and by ensuring regulatory compliance across the business ecosystem, this initiative will help increase competitiveness and thereby facilitate greater foreign direct investment.
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