Emerging Markets have suffered in recent years due to low commodities prices and slower global demand. With signs that emerging markets were on the comeback trail in 2017, many analysts earlier this year believed that 2018 would be much brighter for Emerging Markets, however, there are signs that tailwinds are fading. The IMF said in its latest World Economic Outlook that this year and next, "growth in emerging market and developing economies will rise before leveling off.”

Our economists believe that there is a growing divergence between developed and developing economies. Among developing nations with economies with relatively solid fundamentals and driven by commodity exports—especially oil—growth is accelerating this year going into next. However, higher yields in the United States, the rise in energy prices and large exposure to foreign debt are putting pressure on some oil-importing countries and those with persistent macroeconomic imbalances. This mostly results in heightened volatility in their financial and equity markets, as well as sizeable currency depreciations. Let’s take a closer look at what’s expected for some of these countries in the coming year:

China

Global and domestic headwinds are expected to impact growth in H2 and beyond. The brewing full-blown trade war between China and the United States is the main downside risk to the country’s economic outlook. Domestic threats, however, including a cooling property market and financial deleveraging, are also building. FocusEconomics panelists forecast the economy will grow 6.5% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is seen expanding 6.3%.

India

A normalization in cash conditions following the demonetization of late 2016 and the fading of disruptions from last year’s launch of the Goods and Services Tax should facilitate the economic recovery in FY 2018. Nonetheless, risks of fiscal slippage in the run-up to elections next year, concerns over the banking sector in India, increasing global trade tensions and higher oil prices all cloud prospects. Our panel expects GDP growth of 7.3% in FY 2018, which is unchanged from last month’s estimate, and 7.5% in FY 2019.

Russia

Growth in Russia is expected to pick up this year, thanks to strengthening private consumption and firmer oil prices. An improving labor market and low inflation should buoy household spending, while higher commodity prices will support export growth. That said, high geopolitical uncertainty and the possibility of further economic sanctions remain key risks to the outlook. FocusEconomics Consensus Forecast panelists see GDP expanding 1.7% in 2018, which is unchanged from last month’s forecast. In 2019, growth is seen steady at 1.7%.

Brazil

Brazil’s growth forecast was chopped for a third consecutive month as the truckers’ strike, a less supportive global backdrop and higher oil prices dent the country’s outlook. FocusEconomics panelists now see the Brazilian economy growing 1.7% this year, down 0.2 percentage points from last month’s forecast. A market-friendly outcome to October’s election remains critical to ensuring a sustainable recovery; however, this is far from certain. Next year, GDP is seen growing 2.5%.

Mexico

Household spending and exports are expected to drive growth this year in Mexico. Tight job markets—both domestically and stateside—and improved private-sector lending should support private consumption, while healthy factory output in the U.S. should bolster manufacturing exports. Uncertainty over NAFTA continues to weigh heavily on investment prospects, although the odds of reaching a deal have improved in recent weeks. On politics, most analysts currently expect AMLO to govern as a centrist. FocusEconomics panelists expect growth of 2.2% in 2018, down 0.1 percentage points from last month’s estimate. For 2019, panelists see growth stable at 2.2%.

Argentina

Despite a healthy first quarter, the pace of growth is expected to slow sharply this year. The loss of agricultural output following the severe drought; extremely high interest rates and currency volatility, which will weigh on investment decisions; and consumer spending constrained by low confidence and rapid inflation are seen driving this deceleration. Panelists participating in the LatinFocus Consensus Forecast foresee the economy expanding 0.4% in 2018, down 0.5 percentage points from last month’s forecast. For 2019, growth is expected to reach 1.9%.

Turkey

Economic growth in Turkey will likely weaken in the coming quarters, on tighter financial conditions, shaky investor sentiment and a higher oil import bill. Exchange rate volatility, geopolitical tensions, a gaping current account deficit and elevated inflation pose downside risks. FocusEconomics panelists expect growth of 4.2% this year, which is unchanged from last month’s estimate. They see growth of 3.5% in 2019.

Romania

Higher inflation and a loss in consumer confidence should lead to a marked slowdown in consumer spending this year, denting GDP growth in Romania. Although the expansion in fixed investment should gain some strength, low EU funds absorption will limit the extent of the acceleration. Downside risks stem from widening fiscal and current account deficits. FocusEconomics panelists expect growth of 4.1% for 2018, down 0.1 percentage points from last month’s forecast, and 3.6% in 2019.

Egypt

The Egyptian economy is expected to grow at a solid pace in FY 2019. This is due to higher investment on the back of increased government spending and an improved regulatory environment. Moreover, the external sector should continue to benefit from the weaker pound. However, large fiscal imbalances and the higher price of oil will weigh on prospects. FocusEconomics panelists expect GDP to expand 5.1% in FY 2019, which is unchanged from last month’s forecast, and 4.9% in FY 2020.

South Africa

Greater political stability and firm credit ratings bode well for the South African economy in 2018 as full-year economic prospects look set to largely ride out the weak first quarter. Real wage gains should support stronger household spending this year, while the government’s push to attract investment should bolster capital outlays. Nevertheless, fiscal slippage and a slow reform agenda are likely to constrain growth over the medium term. FocusEconomics analysts expect growth of 1.6% in 2018, down 0.3 percentage points from last month’s forecast, and 2.0% in 2019.

Nigeria

Higher oil prices, improved liquidity and increased public spending in the run-up to the 2019 elections should fuel faster growth this year in Nigeria. However, political uncertainty, as well as security concerns, continues to pose risks to economic activity. FocusEconomics panelists expect GDP to increase 2.4% in 2018, which is down 0.1 percentage points from last year’s projection. Next year, growth is seen rising to 2.9%.

Indicating a boost for the ecosystem, Bahrain Development Bank (BDB) has successfully closed its US$100 million venture capital “fund of funds” to support startups in Bahrain and across the MENA region. The Al Waha "fund of funds" is a definite mark for the growth of entrepreneurship in the region as it aims to support by providing capital to Bahraini startups, as well as attracting new funds in the region.

Last week, the Limited Partners (LPs) Advisory Committee met to strategize the fund’s direction and allocation of $35 million into a series of venture funds. Its LP's include Mumtalakat, National Bank of Bahrain, Batelco Group, Tamkeen and Bahrain Development Bank, among others, with BDB as the General Partner (GP) managing the fund.

Following the closure of the fund, H.E. Sheikh Mohammed bin Essa Al Khalifa, Chairman of the Al Waha Fund of Funds Advisory Committee commented on the progress made in the allocation of the capital raised. “One of the key constraints on the development of the startup and technology ecosystem in the region is lack of access to capital. This fund can help to make a significant difference to that challenge, enabling entrepreneurs to realize the potential of their ideas.”

With the Al Waha Fund of Funds along with the opening of fintech co-working space FinTech Bay and regulatory sandbox for fintech ventures to test out their concepts, entrepreneurs, the time is ripe to leverage initiatives enabling entrepreneurship.

Source: Entrepreneurship Middle East

You've likely experienced your fair share of ups and downs throughout 2018, so to minimize the "downs" side of the equation and lead your team in the right direction in 2019, think about starting to prepare now.

While setting some New Year’s resolutions on how to improve your leadership skills will certainly help stimulate better results in the future, it's equally essential that you monitor the trends that could affect your industry -- and the business world as a whole -- in 2019. 

Thankfully, you won’t have to depend on guesswork to know what changes could be coming your way because there are specific business trends that experts have described. Here are four of the biggest to keep your eye on:

1. Increasingly diverse payment options are coming.

The seemingly countless headlines about Bitcoin and blockchain may no longer be as prominent as they were at the beginning of 2018, but they've illustrated an important trend unlikely to go away: Customers are looking for more flexible banking models and payment methods.

Speed and security are a big part of the equation, which is why the ABA Banking Journal predicts that contactless credit card payments will become an important trend in brick and mortar transactions. Allowing customers to tap or wave a card at a payment terminal to quickly process a transaction falls perfectly in line with the norms of digital shopping.

Of course, many customers don’t want businesses to merely adopt new credit card technology. Enabling your company to also accept non-traditional payment methods -- be they through applications like Paypal or alternative funds like Bitcoin -- could also prove key to winning new customers in the new year.

2. It’s time to embrace AI.

Artificial intelligence (AI) really started to enter the mainstream in 2018, with chatbots and virtual assistants making their presence felt in a wide range of industries.

Each of these advances is designed to improve the customer experience or streamline business operations, and all of them could have a big impact on your bottom line as customers become more and more comfortable with AI.

In a phone interview, Omer Khan, founder and CEO of VividTech, explained to me that, “Today’s chatbots and virtual assistants are able to handle more customer service tasks than ever before to better facilitate the customer journey. As they utilize machine learning to better respond to customer requests, these interactions become even more efficient.

"We’re also seeing chatbots that integrate the brand personality to further streamline these online conversations and improve company results," Khan said.

Though not every AI application may be necessary for your particular business, it's important that you analyze the options that are out there and consider how they could improve your processes and services.

3. The shipping wars will continue.

The priority customers assign to shipping that's free and fast is bigger than ever before — and that’s not going away any time soon. Amazon, Walmart and Target all entered a major Black Friday battle in an effort to sway customers with superior shipping deals.

Other major retailers like Home Depot, Best Buy and Nordstrom are also trying to improve their free shipping options. Direct-to-consumer ecommerce brands will soon be focused on more than just transit time. Maintaining brand quality, owning customer data and improving the entire shipping experience will also prove essential.

In fact, customers are placing an increasing value on free, fast shipping. Nearly 60 percent of shoppers in one Alix Partners study agreed that they “browse for products based on their preferred shipping options.” Some were even willing to spend more on an individual product if free shipping is available.

For ecommerce businesses, adjusting the product lineup isn’t going to be enough to win new customers. Providing a faster, more streamlined delivery process could prove a key differentiator for building your brand.

4. The gig economy and remote work are here to stay.

The Fed has estimated that as many as 75 million Americans participate in the gig economy in some way. Our increasingly digital and decentralized world has also created more opportunities for people to launch their own business ventures. These trends have led to a sharp increase in remote work, with over 43 percent of employees, according to a Gallup survey, working at least part of the time from home.

Though the gig economy may not have had much of an impact on your industry yet, there’s no denying that shifting priorities in employment will continue to make a difference in the workplace.

For one thing, employees are placing more value than ever before on having a flexible work environment that allows them to spend more time out of the office. Adapting company policies to allow for remote work could help improve employee retention, but it must be managed appropriately to keep productivity at appropriate levels.

Finding the right balance for achieving flexibility and high-quality results will prove crucial as businesses try to keep their best and brightest from jumping into the gig economy.

Ring in 2019 the right way!

As this list illustrates, new business trends are poised to disrupt everything from marketing to employee management. Is your business prepared to handle the challenges ahead?

By doing your research now, you can better identify how to successfully incorporate these changes into your business model so the competition doesn't leave you behind.

Source: Entrepreneurship Middle East

While selecting an investment avenue, you have to match your own risk profile with the risks associated with the product before investing.

Most investors want to make investments in such a way that they get sky-high returns as fast as possible without the risk of losing the principal amount.
And this is the reason why many investors are always on the lookout for top investment plans where they can double their money in few months or years with little or no risk.

However, it is a fact that investment products that give high returns with low risk do not exist. In reality, risk and returns are inversely related, i. .. higher the returns, higher is the risk, and vice versa.

So, while selecting an investment avenue, you have to match your own risk profile with the risks associated with the product before investing. There are some investments that carry high risk but have the potential to generate high inflation-adjusted returns than other asset class in the long term while some investments come with low-risk and therefore lower returns.

There are two buckets that investment products fall into - financial and non-financial assets. Financial assets can be divided into market-linked products (like stocks and mutual funds) and fixed income products (like Public Provident Fund, bank fixed deposits). Non-financial assets - most Indians invest via this mode - are the likes of gold and real estate.

Here is a look at the top 10 investment avenues Indians look at while savings for their financial goals.

1. Direct equity
Investing in stocks may not be everyone's cup of tea as it's a volatile asset class and there is no guarantee of returns. Further, not only is it difficult to pick the right stock, timing your entry and exit is also not easy. The only silver lining is that over long periods, equity has been able to deliver higher than inflation-adjusted returns compared to all other asset classes.

At the same time, the risk of losing a considerable portion of capital is high unless one opts for stop-loss method to curtail losses. In stop-loss, one places an advance order to sell a stock at a specific price. To reduce the risk to certain extent, you could diversify across sectors and market capitalisations. Currently, the 1-, 3-, 5 year market returns are around 13 percent, 8 percent and 12.5 percent, respectively. To invest in direct equities, one needs to open a demat account.

2. Equity mutual funds
Equity mutual funds predominantly invest in equity stocks. As per current Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, an equity mutual fund scheme must invest at least 65 percent of its assets in equities and equity-related instruments. An equity fund can be actively managed or passively managed. In an actively traded fund, the returns are largely dependent on a fund manager's ability to generate returns. Index funds and exchange-traded fund (ETFs) are passively managed, and these track the underlying index. Equity schemes are categorised according to market-capitalisation or the sectors in which they invest. They are also categorised by whether they are domestic (investing in stocks of only Indian companies) or international (investing in stocks of overseas companies). Currently, the 1-, 3-, 5-year market return is around 15 percent, 15 percent, and 20 percent, respectively. Read more about equity mutual funds.

3. Debt mutual funds
Debt funds are ideal for investors who want steady returns. They are are less volatile and, hence, less risky compared to equity funds. Debt mutual funds primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments. Currently, the 1-, 3-, 5-year market return is around 6.5 percent, 8 percent, and 7.5 percent, respectively.

4. National Pension System (NPS)
The National Pension System (NPS) is a long term retirement - focused investment product managed by the Pension Fund Regulatory and Development Authority (PFRDA). The minimum annual (April-March) contribution for an NPS Tier-1 account to remain active has been reduced from Rs 6,000 to Rs 1,000. It is a mix of equity, fixed deposits, corporate bonds, liquid funds and government funds, among others. Based on your risk appetite, you can decide how much of your money can be invested in equities through NPS. Currently, the 1-,3-,5-year market return for Fund option E is around 9.5 percent, 8.5 percent, and 11 percent, respectively.

5. Public Provident Fund (PPF)
The Public Provident Fund (PPF) is one product a lot of people turn to. Since the PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment. Read more about PPF.

6. Bank fixed deposit (FD)
A bank fixed deposit (FD) is a safe choice for investing in India. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs 1 lakh for both principal and interest amount. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate earned is added to one's income and is taxed as per one's income slab. Read more about bank fixed deposit.

7. Senior Citizens' Saving Scheme (SCSS)
Probably the first choice of most retirees, the Senior Citizens' Saving Scheme (SCSS) is a must-have in their investment portfolios. As the name suggests, only senior citizens or early retirees can invest in this scheme. SCSS can be availed from a post office or a bank by anyone above 60. SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. Currently, the interest rate that can be earned on SCSS is 8.3 per cent per annum, payable quarterly and is fully taxable. The upper investment limit is Rs 15 lakh, and one may open more than one account. Read more about Senior Citizens' Saving Scheme.

8. RBI Taxable Bonds
The government has replaced the erstwhile 8 percent Savings (Taxable) Bonds 2003 with the 7.75 per cent Savings (Taxable) Bonds. These bonds come with a tenure of 7 years. The bonds may be issued in demat form and credited to the Bond Ledger Account (BLA) of the investor and a Certificate of Holding is given to the investor as proof of investment. Read more about RBI Taxable Bonds.

9. Real Estate
The house that you live in is for self-consumption and should never be considered as an investment. If you do not intend to live in it, the second property you buy can be your investment.

The location of the property is the single most important factor that will determine the value of your property and also the rental that it can earn. Investments in real estate deliver returns in two ways - capital appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid. The other big risk is with getting the necessary regulatory approvals, which has largely been addressed after coming of the real estate regulator. Read more about real estate.

10. Gold

Possessing gold in the form of jewellery has its own concerns like safety and high cost. Then there's the 'making charges', which typically range between 6-14 per cent of the cost of gold (and may go as high as 25 percent in case of special designs). For those who would want to buy gold coins, there's still an option. One can also buy ingeniously minted coins. An alternate way of owning paper gold in a more cost-effective manner is through gold ETFs. Such investment (buying and selling) happens on a stock exchange (NSE or BSE) with gold as the underlying asset. Investing in Sovereign Gold Bonds is another option to own paper-gold. Read more about sovereign gold bonds.

What you should do
Some of the above investments are fixed-income while others are market-linked. Both fixed-income and market-linked investments have a role to plan in the process of wealth creation. While market-linked investments help in navigating the volatility and in the process generate high real return, the fixed income investments help in preserving the accumulated wealth so as to meet the desired goal. For long-term goals, it is important to make the best use of both worlds. Have a judicious mix of investments keeping risk, taxation and time horizon in mind.

Source:  The Economic Times

This past year, 2018, has been a very good one for innovation. We've seen the blockchain boom, the increase in low-code and no-code app development, the start of the rollout of 5G technology and AI and AR: All came into their own with countless programs and applications for both business and consumer life.

On the coattails of such a year, I believe that 2019 has the opportunity to show even more promise. Here are the trends I predict we will see in small businesses and across the industry as a whole:

University technology transfers will become an integral part of the startup community.

The innovation economy is always looking ahead toward “the next big thing.” It should come as no surprise, then, that often the new generation of the best and brightest can be found in colleges and universities across the country.

The spark for this was the 1980 Bayh-Doyle Act, which enabled universities, nonprofit research institutions and small businesses to own, patent and commercialize inventions developed under federally funded research programs within their organizations. As a result, corporations and investors in the years since have been turning to colleges for research and development.

Gatorade, Facebook, Remicade: No shortage of household names have come out of college and university research and development. In fact, according to an infographic from AUTM, from 1996 to 2015, tech transfer supported 4.3 million jobs, forming 11,000-plus startups.

Examples? My own company, Sports Engineering Inc., partnered with Worcester Polytechnic Institute to create a unique sole technology, Orca Pharmaceuticals. AstraZeneca announced a partnership with New York University to develop novel drugs for autoimmune disease. The Northwestern University spin-off Naurex Inc. was acquired by Allergan. And there are more ...

Technology will become more prevalent in everyday consumer products.

According to Consumer Technology Association, the U.S. consumer technology sector is set to reach a record $351 billion in retail revenues in 2018. “Technology is improving our lives in more ways than ever -- and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market,” Gary Shapiro, president and CEO of CTA, told BusinessWire.

In 2019, I believe that technology will embed itself even further in our everyday lives -- often without our even noticing.

Fitness, for example, will continue its shift from scheduled studio classes and gyms to on-demand apps and streaming services, which are already part of the $30 billion live-streaming industry (projected by MarketsandMarkets research to grow to $70 billion by 2021). Technology advancements to promote safety among professional and amateur athletes will also increase, whether through the technology in a ZERO1 football helmet designed to reduce concussions, or in the sole of a sneaker aimed at minimizing ACL and ankle injuries.

Even our pets will get into the game, with Amazon expected to launch a pet tracker that can be attached to a dog or cat collar. This will be part of a wide trend for pet-specific technology products, which already represent a huge market, given the more than 1.5 billion dogs and cats worldwide.

“Work” will change, both in terms of how we show up and who's there when we do.

As startups look to cut costs and keep employees happy, the traditional office model will continue to evolve. In fact, 70 percent of professionals globally already work remotely at least once a week, according to a recent report by IWG.

Add to this the fact that a recent study, led by Stanford economics professor Nicholas Bloom and his graduate student James Liang, demonstrated that remote workers they surveyed were not only happier, but also more efficient: You can see a clear argument for a new model.

Additionally, the remote office model also allows companies with the increased freedom to pursue the talent they desire, rather than restricting themselves to only a handful of candidates in their local area. I believe that this is actually part of an even larger trend -- whereby companies will use different methods to measure the  "desirability" of a candidate, and it won’t always be the obvious.

As Jeremy Auger, co-founder and chief strategy officer at D2L told Inc., “The rise of A.I. and automation means employees are increasingly tasked with jobs that only humans can do: thinking creatively, using judgment, employing empathy, etc. Adaptability will be the most durable skill in the years to come, as the ability to learn and adjust becomes more important than any one skill.”

Further, a “traditional” education won't be as necessary, due to the rise of coding boot camps and other intensive programs that provide students with skills that are immediately applicable for the workspace. These new education models are comprised largely of adults -- people who either chose majors that didn’t funnel into a good career path or recognized that they weren’t qualified for the job they wanted.

These people then returned to school in a non-traditional way to obtain skills, thus joining the other pioneers out there in the new-collar work force.

Cryptocurrency will no longer be the “Wild West.”

Regulation can be difficult when it comes to just about any emerging technology. After all, when something hasn’t existed before, how can you possibly control it?  In 2019, however, that is going to change. While crypto's trading volume will likely grow by over 50 percent in 2019, according to a Satis Group prediction, it will also become far more regulated. The Financial Action Task Force (FATF) announced that it will get one step closer to creating international standards for cryptocurrency when it launches its first set of rules in June of 2019.

Some people say such regulation is overdue: A report by  the Wall Street Journal in September said that nearly $90 million worth of criminal proceeds had gone through crypto intermediaries in the previous two-year period. According to the WSJ analysis, which it said included only “a narrow slice of suspected criminal behavior,” $88.6 million worth of funds was laundered via 46 exchanges.

According to Reuters, jurisdictions around the world will be required to license and regulate cryptocurrency exchanges, as well as select firms providing encrypted wallets, and firms providing financial services for ICOs.

One thing is clear: With these regulatory improvements coming down the pike, cryptocurrency and the inovation it introduces to all sorts of transactions will be here to stay.

And as entrepreneurs look to the year ahead, innovation, evolution and regulation will serve as the three major themes to carry small businesses and startups forward into 2019.

Source: Entrepreneurship Middle East

The article provides a brief overview of the new FDI Law that offers an arrangement for the UAE Cabinet to allow foreign shareholders to own up to 100 per cent of companies in selected sectors.

To carry on business “onshore” in the UAE, a company established under the UAE Commercial Companies Law has to be at least 51% owned by a UAE or 100% by GCC national. For some foreign investors, particularly those unfamiliar with the region, this inability to have full legal ownership and control has been seen as a barrier to entry or limitation on their business in the UAE.

This article highlights some of the principal of the new Foreign Direct Investment Law No. 9 year 2018 (“FDI Law”) and the impact that it will have on the foreign investors.

As per Article 6 of the FDI Law, a new Foreign Direct Investment Committee (“Committee”) is to be set up. This Committee shall be in charge of the following:

• Issuing the Approved Activities List for foreign direct investors (“Positive list”)
• Making amendments to the Negative List for foreign direct investors
• Approving licensing applications
• Deciding the benefits for foreign direct investment projects

Positive list

The Committee will be responsible to prepare “positive list” to the UAE Cabinet which will set out the economic sectors in which greater levels of foreign ownership will be permitted (more than 49% of the share capital). When determining the positive list, the FDI Committee must take the following into account:

• integration with strategic plans of the UAE;
• achieving the best profit and added value to the UAE economy;
• raising innovation and providing job opportunities and training for UAE nationals;
• limiting negative effects on incumbent UAE companies that conduct a similar activity;
• the foreign investor’s level of competency, expertise and international renown;
• the best use of modern technology; and
• achieving a positive impact on the environment.

Negative list

Higher levels of foreign investment will not be permitted in any sector that appears in the “negative list” set out in the FDI Law. The sectors that are currently listed in the negative list pursuant to Article 7 of the FDI Law are as follows:

• Oil exploration and production;
• Investigation, security, military (including manufacturing of military weapons, explosives, uniforms, and equipment);
• Banking and financing activities;
• Insurance services;
• Pilgrimage and umrah services;
• Certain recruitment activities;
• Water and electricity services;
• Fisheries and related services;
• Postal, communications and other audio-visual services;
• Land and air transportation;
• Printing and publishing;
• Commercial agency;
• Medical retail trade such as private pharmacies; and
• Poison centres, blood banks and quarantine.

Sectors not appearing on the positive or negative lists

If a foreign company wishes to carry on a foreign direct investment project which does not appear in either the positive or negative list, it may apply for permission to have a higher level of foreign ownership than 49 per cent in that sector. The FDI Law sets out the process to be followed in the event of such application.

Obligations of the FDI Company

As per Article 13 of the FDI Law, the FDI company must:

• Comply with all local and federal laws in relation to environmental health, pollution management, and general public health;
• Practice only the commercial activities mentioned in its license;
• Comply with the Emiratization quota (details of which will be issued separately by the ministry of economy);
• Keep accurate accounting records;
• Appoint authorized auditor(s) for a one-year renewable period, up to a maximum of six years;
• Comply with the relevant authorities’ requirements regarding the FDI company’s projects which the authorities may request from time to time;
• Notify the relevant authorities when the FDI company’s projects commence within 5 days.

Although the FDI Law excludes the companies incorporated in free zones, it is worth mentioning that recently the economic departments in the UAE have released a list of activities that can be carried out onshore by companies established in free zones.

Source: Bonnard Lawson

This page throws light on the advantage of investing in the UAE which include: strategic location, state-of-the-art infrastructure, variety of business premises, political stability and more.

Advantages

The UAE has the advantage of:

• Strategic location
• State-of-the-art infrastructure
• Variety of business premises
• Political stability
• Social stability
• Ease of doing business
• Protection of intellectual property rights
• Favourable business regulations
• Open economy
• Economic stability
• No corporate tax.

Strategic location

The UAE is blessed with a strategic location between the east and west, which makes it accessible to major emerging economies, linking shipping routes and facilitating goods' transportation between the various regions in Middle East, Asia, Europe and Africa.

State-of-the-art infrastructure

The UAE provides advanced infrastructural facilities in all fields. In March 2016, Dubai announced to set up the world's biggest wholesale city , with an investment of AED 30 billion. The city, which will occupy an area of 550 million sq ft aims to help the UAE acquire a significant share of the global economic sector, estimated at USD 4.3 trillion. The city will be linked with Jebel Ali Port and Al Maktoum International Airport and will provide logistical support that will fully link with four continents.

Refer to the infrastructure section for more information.

Variety of business premises

The UAE offers endless choices of business premises and locations. According to your business activity, you are at liberty to choose a place appropriate for operation whether on the mainland or in a free zone.

You can set up your business in:

• plush business centres
• fancy shopping malls
• state-of-the-art commercial furnished buildings and towers
• industrial areas
• free zones specialised in a range of industries from logistics to media, power and information technology.

Political stability

The UAE is a model of political stability. Since its formation in 1971, the UAE has been a successful constitutional monarchy and continues to be so. This is because of the belief system of the UAE's Founding Fathers in peace and justice and the continued belief of the present political system and government in the same.

As per Al Bayan's report , the UAE has 102 diplomatic missions abroad which include 80 embassies, 18 consulates and 4 permanent missions. There are 199 foreign diplomatic missions in the UAE which include 110 embassies and 73 consulates.

The UAE is a member of Gulf Cooperation Council (GCC), Arab League and the UN and its agencies. According to the Global Peace Index 2016, the UAE is the third most peaceful country in the region.

Social stability

Despite the presence of a large foreign community in the country, the UAE is a safe place to work in and develop your capital with favourable living conditions and quality of life. The UAE Government emphasises on tolerance in the society. Moderation and acceptance of others are innate in the UAE culture.

With 110 crimes , the UAE had one of the lowest level of violent crimes in the world in 2015. The UAE ranked 9th among countries with lowest crime rates and 4th concerning assault offences in general. These rankings are better than many advanced countries around the world.

Ease of doing business

According to the Doing Business 2019 report, the UAE scored 11th rank globally and 1st rank regionally. The UAE scored impressive ranks in the following indices:

• Getting electricity - 1st rank
• Paying taxes - 2nd rank
• Dealing with construction permits- 5th rank
• Registering property – 7th rank
• Enforcing of contracts - 9th rank
• Protecting minority investors – 15th rank

Protection of intellectual property rights

It maintains protection of intellectual property rights, trademarks and it has enforced laws against piracy.

Favourable business regulations

The UAE signed major business international treaties to encourage business and foreign investments. It maintains tightened export control laws to prevent the movement of illicit goods as per Federal Law No. 13 of 2007 concerning Goods Subject to Import and Export Control.

Open economy

The UAE has its own regulations which prohibit monopoly and encourage competition. The UAE encourages private sector growth and maintains liberal policies in terms of foreign exchange controls, visa policies and import regulations. The UAE has strong ties with key trade associations to strengthen its position as an open economy and player in the international trade and competition.

The UAE:

• is a member of the World Trade Organization ( WTO) since 1996
• is a party to the General Agreement on Tariffs and Trade ( GATT) since 1994
• is a member of the Greater Arab Free-Trade Area ( GAFTA) in which all GCC countries participate
• concluded Free Trade Agreements with Singapore and the EFTA bloc in 2008 and 2009
• is cooperating with the GCC countries to conclude the Free Trade Agreements with the EU, Japan, China, India, Pakistan, Turkey, Australia, Korea and the Mercosur bloc comprising Brazil, Argentina, Uruguay and Paraguay.

Source: UAE Government Website