A tale of two economies

Hmm…so the UK has narrowly escaped a triple-dip recession. Uhm, yes, that’s really good news….

Hmm…so the UK has narrowly escaped a triple-dip recession. Uhm, yes, that’s really good news. However, the reaction from the average man in the street is likely to be, let’s face it, a tad more underwhelming. Perhaps a nonchalant shrug of the shoulders can be expected, if you’re lucky, followed by an almost inaudible grunt? So you swiftly apologise. Sorry, missed that, you say defensively as you explain the hearing is not what it used to be. So what…is that what you said?

Completely understandable reaction given the state of the economy ever since the world-wide downturn, the never-ending world-wide downturn to be more accurate, which sadly shows no real sign of flying off into the sunset, at least not here in the UK. Flat and featureless just about describes the economic landscape despite all the political gloss, hype and spin to make it all appear otherwise.

Yet, in other parts of the world, there has been comparatively little in the way of a downturn. Countries like the United Arab Emirates (UAE), for example, have weathered the economic difficulties and negativity rather better than most countries in the West. True, gross domestic product (GDP) has declined somewhat but not to the same extent as in the UK and elsewhere.

Indeed, the Gulf News reports Sultan Bin Saeed Al Mansouri, the UAE Minister of Economy, saying the UAE’s GDP will grow above 4% by the end of this year. The UAE’s solid economic growth is forecast to continue in 2013 despite the global financial crisis and the slow recovery in the developed nations.

Trade, logistics and services will lead UAE growth, the Minister said, adding, “The UAE has succeeded in cementing its leading position in the international investment map, as it expands its investment in ports, airports, infrastructure, renewable energy, industry and agriculture locally and internationally.”

At this moment, the UK would give its right arm – if it had one, that is – for GDP growth of around 4%. Latest figures released, however, show that in the first three months of this year, UK GDP grew by a miserable 0.3%. So maybe for those with business aspirations, a start-up located in the Persian Gulf instead of the UK could be the profitable way forward? Who knows, but a corporate credit card with HSBC should stand you in good stead whatever you decide to do.

So just why do thousands of foreign businesses choose to move to the UAE? Diversification away from dependence on oil and gas has for decades been at the heart of the UAE’s economic strategy. And so have free zones, dozens of which have been set up across the country offering overseas investors a string of mouthwatering benefits.

Of course, the UAE’s location is also perfect, surrounded as it is by both emerging and mature markets which puts businesses within easy reach of hundreds of millions of potential customers.  Red tape and regulation is also kept to an absolute minimum, too, which means a business can be set up in a matter of days as opposed to weeks or even months.

But there’s much more on offer including zero corporate and personal tax liability; 100% foreign ownership allowed; 100% repatriation of capital and profits; no foreign exchange controls; bespoke infrastructure options if required; and full control over hiring and firing of personnel.

A compelling list of reasons indeed for setting up a business in the UAE. Ah, yes, almost forgot. For all you sunshine-starved Brits, there’s the brilliant all-year-round weather to contend with. Goodness, that’s a really tough one to consider!

If you want to read more stories from the Gulf News then click here.