Middle East to take centre stage as it hosts international events

Qatar surprised the world in December 2010 by winning the bid to host the FIFA World Cup 2022 and in November 2013 Dubai, part of the United Arab Emirates, successfully won the bid to host the World Expo in 2020.

It has been widely reported across the world that not only will these events boost the local economies but the positive impact for the Gulf Cooperation Countries (GCC) and the region, will be significant. Both countries have been recently upgraded from ‘frontier’ to ‘emerging’ market statuses by international equity index compliers Standard and Poors and Dow Jones.

What is the impact of the winning bids on the countries?

Qatar

Qatar has already embarked on the development and construction of considerable infrastructure projects including a metro railway system, hotels, nine state of the art football stadiums and even the creation of a new city, Lusail, for 200,000 inhabitants.

As the construction sector booms in Qatar it is expected that the energy, transport and retail sectors will grow substantially too; hotel, aviation and tourism related sectors also anticipate a boost with an influx of international visitors to the event.

It is estimated that 1.5 million new jobs will be created ahead of the World Cup, however, there have been some concerns over the treatment and living conditions of the blue collar labourers brought in to meet the building demands. The government in Qatar is monitoring the treatment of those working in the country and aims to ensure there are no human rights violations.

The real estate market in Qatar has been climbing steadily since the news of 2022. But excessive price hikes and overdevelopment may be an issue and there are concerns that the property market could remain volatile over the next few years.

United Arab Emirates

Dubai, one of the seven Emirates making up the United Arab Emirates, is already a thriving business hub and tourist destination. Winning the bid to host the World Expo in 2020 is expected to increase the focus on Dubai even more, with an estimated 25 million visitors expected during Expo year alone.

Developing the infrastructure will be a key aspect leading up to the Expo, particularly in and around the newly opened second International Airport, Al Maktoum International - Dubai World Central. The current metro system is to be expanded to reach the Expo site and new hotels and retail units are already in the planning stage.

The Department of Tourism and Commerce Marketing (DTCM) is predicting 275,000 new jobs will be created between 2013 and 2021 and the number of new businesses and international companies setting up in Dubai and in the UAE is expected to rise significantly. With more jobs being created, the real estate market has also been growing but some remain cautious after the crash which hit Dubai in 2008.

The impact on the Middle East

With so much growth and development, many foreign and international companies have attempted to set up or bid for tenders and contracts in the UAE and Qatar. They have been faced with extremely bureaucratic, time consuming and costly processes.

Deciding where to set up in the Middle East, what type of legal entity to establish and navigating the practicalities and restrictions is a complex task. For example, to trade in Qatar or the UAE you need to be a locally based company with a local service agent who will retain 51% ownership of your company - but there are Free Zone options allowing 100% ownership but trading restrictions apply. In some areas the Wage Protection System (WPS) is in place and there are requirements surrounding this - and in Qatar there is corporate and withholding tax but not in the UAE.

It is important that a company does what is best for them and understands its environment. With offices in Dubai and Doha TMF Group is well placed to assist clients, providing them with local knowhow and expertise to efficiently deliver business services including payroll, accounting, human resources, company establishment and management services.

Get in touch with our UAE specialists to find out more

 
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