The United Arab Emirates has been in the spotlight quite a bit because of the nations booming economy and rapidly emerging industries.
In fact, possibly the largest financial deal in human history took place in UAE known as the Neom deal. The Neom deal is proposed to be the city of the future and construction is taking place in order to fulfill this dream.
So what is happening in the UAE that is making this market so powerful?
Low Loan Rates From The Banks
The United States as of recently still is enjoying what has been the lowest loan rates in the history of the country. If you need to find a big loan for $50,000 a small loan for $2,500, there is always a lender willing to give you a competitive edge on the loan.
UAE is very similar in this regard. The national loan rate from one of their banks currently is around 5-6% interest rates. This creates an environment that is more advantageous than ever before to start a new business, grow an existing business, or purchases businesses that are fragmented when you have such cooperation from banks.
The UAE Does Not Have Any Federal Income Tax
The UAE government has implemented a value added tax at a standard rate of 5% but the country essentially is putting more of their earning right back into their pocket. This model may be too radical for other countries to adopt currently because of various social programs that require tax to pay for the overhead. But the people of the UAE are enjoying a higher quality of life because of the extra cash they can invest into their lifestyle or back into their business in general.
The UAE Has Plenty of Funding Options
If your dream requires capital, the country is known to have an excellent supply of venture capitalists and angel investors. The investors and angel investors may not be your first option to apply for, but because people are taking home more money than ever, some people whom are more established may actually give you better rates than banks would for your business project.
Business incubators also exist in the UAE and are mostly under the supervision of the government to encourage entrepreneurs to start their business in order to help create more opportunities/jobs in the market that could benefit the whole economy and area as a whole.
The UAE Also Has Reservations on Lending
Much like the United State’s credit system, the UAE has a very similar model that has factors for credit worthiness. It isn’t just a free for all of lending that goes unchecked. The UAE, while having the capabilities to extend credit, don’t like seeing mistakes on their deals. When the UAE extends lines of credit they do it under the pretense that you are someone worth forming a business relationship with.
