Ogier's entry into the Middle East late last year couldn't have come at a more opportune time. Since the formal launch of our office, our on-the-ground team of specialists has been kept busy, says Daniel Pacic, managing director, Ogier Global in Dubai.
On the legal side there has been a strong demand for in time-zone advice in the laws of our home jurisdictions (BVI, Cayman, Guernsey, Jersey, Ireland and Luxembourg) while the Ogier Global team continues to work very closely with colleagues in Hong Kong on multiple enquiries from mainland Chinese firms looking to establish a presence in the UAE - a growing trend in recent years.
There are several factors which currently make Dubai and the UAE so attractive to foreign investors. With its oil reserves and sovereign wealth funds valued at approximately $1.3 trillion, the UAE has significant resources, without the structural liabilities some of its neighbours must sustain, to help it navigate the volatility of the oil market and other challenges.
A more sustainable future
With 2023 declared the Year of Sustainability by the UAE government, the past 12 months have seen the federal and local governments invest heavily in economic diversification and growth. Against the backdrop of COP28, an event which saw the signing of a landmark agreement signaling "the beginning of the end" of the fossil fuel era, optimism and expectations of future growth in Dubai's non-oil private sector are at their highest since February 2020.
The emirate's real estate market is booming, along with its hospitality, and travel and tourism sectors. Passenger numbers at Dubai International Airport were forecast to hit 85 million by the end of 2023, almost reaching pre-Covid levels. The economy as a whole grew by an astounding 2.8% in the first quarter alone, buoyed by accelerated sales growth across all measured sectors.
Attractive for business
When it comes to attracting business, momentum is key – and Dubai's Department of Economy and Tourism recently introduced the Dubai Unified Licence (DUL) to further streamline business processes for all enterprises in the city, whether operating on the mainland or in free zones.
This initiative consolidates economic establishments into a single platform for efficient data management and sharing and aims to standardise and simplify business procedures by enhancing operational efficiency and reducing setup time for businesses.
The DUL promotes transparency and accountability and contributes to Dubai's competitiveness as a business-friendly destination, making it more attractive to foreign investors and entrepreneurs. More than 50,000 licenses have already been issued, with plans for more in the future, covering all registered companies in Dubai mainland and free zones.
In the future, the DUL aims to facilitate the opening of bank accounts for Dubai-based companies (an issue that can face foreign investors) with enhanced ease and efficiency. The implementation of the DUL also aims to strengthen the compliance framework outlined in the national Anti-Money Laundering / Countering the Financing of Terrorism (AML / CFT) strategy, ensuring the integrity of the UAE economy and the global financial system.
Meeting global standards
The UAE has also been actively intensifying its efforts to combat money laundering, terrorist financing and proliferation financing, and comply with applicable sanctions regimes. This initiative is aimed at its removal from the Financial Action Task Force (FATF) grey list.
The UAE's commitment to implementing robust compliance measures against money laundering has earned it "approval for inspection", a crucial step in removing the country from the list of nations under enhanced monitoring by the FATF. The country also took significant action by seizing and confiscating assets totalling more than Dh1.3 billion ($354 million) from March to mid-July 2023, reflecting the country's concerted efforts to combat money laundering and terrorism financing.
This inspection couldn't come at a more important time, as the UAE is also strategically focusing on blockchain technology to further diversify from its hydrocarbon-based economy. The Abu Dhabi Global Market (ADGM) and its regulator, the Financial Services Regulatory Authority (FSRA), were among the pioneers in providing regulatory guidance for virtual assets.
The establishment of the Virtual Asset Regulatory Authority (VARA) further solidified the UAE's commitment to creating a favourable environment for institutional investors, attracting major global virtual asset firms to set up operations in the region including Coinbase. VARA has attracted a diverse range of businesses and is expected to regulate more than 100 new entities in the coming quarters.
Centre of innovation
The UAE has also rapidly become a centre of web3 innovation, with Dubai hosting 500 startups and Abu Dhabi's Hub71 providing funding and infrastructure support for blockchain ventures.
With more than 11% of the population owning cryptocurrency, the UAE is positioned as a key hub in the MENA region, reflecting its strategic role as a bridge between Asia and Europe. The country is expected to benefit significantly from the next phase of digital asset industry growth.
Elsewhere in the region, Saudi Arabia's capital Riyadh recently secured the right to follow in Dubai's footsteps by hosting the 2030 World Expo. This of course coincides with the most significant year of Saudi Vision 2030, the plan put forward to diversify the country's economy and reduce dependence on oil and hydrocarbon-based business.
Against that backdrop, and with the Kingdom and the UAE combined holding more than 70% of the region's individual wealth, 2024 promises to be a busy year for the region. Now is the time to stand up and support foreign investors and clients in entering and expanding into this market, enabling them to take advantage of the considerable opportunities in the region.
By Daniel Pacic, Managing Director, Ogier Global in Dubai
