New Industrial Strategy: A Perfect Time to setup Industrial Companies in the UAE
The UAE has achieved a new milestone in terms of encouraging foreign investment by announcing the New Industrial Strategy in 2021. Named Operation 300 Billion, the Industrial Strategy is led by the UAE’s Ministry of Industry and Advanced Technology.
Investors and entrepreneurs have welcomed the visionary move as the strategy is likely to give a new boost to the prospects of business setup in the UAE. In line with the new National Industrial Strategy and other recent reforms, business setup consultants in the UAE analyse why it is the perfect time to start an industrial company. Read ahead.
Operation 300Bn: What’s in it For Industrialists?
The new National Industrial Strategy is set to ramp up the economy by allocating more resources to boost industrial company formation in the UAE. The strategy aims to achieve the following objectives in the long term,
- The contribution of the manufacturing sector to the UAE Economy will increase from AED 133 billion to AED 300 billion over the next ten years
- Support the formation of 13,500 industrial companies in the coming years
- Increase spending on R & D in the industrial sector from AED 21 billion to AED 57 billion in the coming years
The main goals of the New National Industrial Strategy aim to make the UAE a manufacturing powerhouse in the next few years. Industrialists should explore this opportunity by setting companies with the help of top business setup consultants in the UAE.
Make it in the Emirates
The government launched the Make in the Emirates program as part of the National Industrial strategy to promote local manufacturing in the UAE. The Make in Emirates initiative is an extension of the UAE nation brand aimed to promote the distinctiveness and quality of the locally manufactured products. Branding the idea of local manufacturing will increase the market value of the products, which will help the foreign investors who establish companies in the UAE.
The campaign is the first of its kind launched in the country to promote both local and international investors to manufacture and exports products in the UAE. The branding infuses a sense of pride and honour in the products. The ‘Made in the UAE’ tag will convey the message that the product is of a superior quality which will increase the brand trust. This will ensure that the manufacturers need not struggle to market their products in the international markets.
SMEs to Receive Benefits of the Strategy
The creation of 13,500 industrial companies is one of the top objectives of the UAE Industrial Strategy, which means SMEs will be the chief beneficiary. SMEs contribute to 62% of the UAE’s non-oil GDP and are responsible for employing around 85% of the private sector workforce. During 2017 and 2018, the SMEs witnessed a growth rate in the range of 5-7 per cent.
The government recently announced some good initiatives to extend support to SMEs, such as slashing the rate of return that commercial banks receive from the financing provided to project owners, reducing guarantees demanded by the banks, apart from allocating a specific share of banks’ public financing for entrepreneurs. These initiatives are positive factors for SME investors to initiate business setup in the UAE following the announcement of the Industrial Strategy.
Attracting Foreign Investment
Attracting foreign investment forms the crux of the strategy unveiled by the UAE government. The recent regulatory changes, including the announcement of 100% foreign ownership in the mainland in certain specific sectors, should be read as setting the stage for this ambitious plan. The manufacturing sector comes within the purview of the foreign ownership reform. The industrial strategy also includes dedicated financing for investors and support for the adoption of advanced technology.
Domino Effect on the Economy
In short, the New National Industrial Strategy will create more opportunities for empowering the manufacturing sector in the UAE. Foreign investors will find the prospect of a business setup in the UAE more attractive than ever, especially after the economic uncertainties of the pandemic. Business setup consultants in the UAE believe that the strategy will have a domino effect on the economy as more employment will be created along with assuring growth in logistics and financial services sectors.
How Can Business Setup Consultants in the UAE Help Investors?
The UAE is poised to become an industrial powerhouse by 2031 with the announcement of the National Industrial Strategy. More foreign investors will come to initiate business setup in the UAE on the back of the recent reforms, including 100% ownership, citizenship and long-term visas. The foreign investors will require the guidance of business setup consultants in the UAE, such as Jitendra Business Consultants (JBC), to make strategic decisions like whether to incorporate the company in mainland or free zones.
Furthermore, industrial investors would require assistance in meeting regulatory requirements, including AML / CFT, Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO) and VAT. JBC’s company formation specialists will ensure that the investors are heading in the right direction towards a brighter future.