The past year has seen big changes for companies operating in the United Arab Emirates and beyond. Let's take a look at some issues and events that are likely to affect the way business is done in 2016.
1. New Companies Law
This came into effect on 1 July 2015, and applies to all businesses in the UAE. The law required changes in company structures, voting rights and changes for boards of directors. In 2016, we will see the full effect of the application of the companies law, and if that leads to any amendments to terms or clauses.
2. Wage Protection System (WPS)
Now in place in the UAE onshore market and in some free zones, we could see the WPS expand into other free zones in the future. Get up to speed on the WPS in Qatar and download our essential fact sheets here.
3. Possible introduction of VAT
The UAE is a tax-free jurisdiction and attracts many companies for this reason, however there is draft legislation being formed to consider the introduction of VAT. At this point it's "wait and see", as it's not yet clear how this would be applied or to what items / products, or what companies it would impact. There are also discussions about making this a GCC-wide application and currently, the GCC member states can't agree on the implementation rates and its application.
4. Expo 2020
The build-up to Expo 2020 is gathering speed, in Dubai particularly. 2016 and 2017 will see companies interested in participating in the build at the Expo site enter the UAE, and those set to provide ancillary services will also be establishing their presence. Need help with your market entry? Get in touch today.
5. Fuel prices
August 2015 saw the removal of government backed-fuel subsidies in the UAE. Prices at the pump are now set by an elected council who decide these prices on a monthly basis. The change initially saw a spike in the cost of fuel, which resulted in a marked increase in the cost of doing business. In recent months prices have dropped, however future variations and fluctuations should be factored in to business planning.
6. Electronic reporting and documentation
We expect to see a continued increase in the use of electronic reporting systems, and for the submission of applications to authority or government offices as well as free zones. These e-systems have in some instances led to an increase in complexity and resulted in time lags, however longer term we expect to see services streamlined and a cut in the turnaround time on simple applications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.