The UAE and Bahrain rank among the world’s top 100 startup destinations as well as the top two most-preferred ecosystems for startups in the Gulf region.

Globally, the UAE came in at 43rd, while Bahrain jumped 20 places to 75th, according to new study by StartupBlink. Saudi Arabia also improved its ranking by jumping 213 points to rank 281st globally.

The study said the UAE was recognised for the potential of its Arab-speaking market and close involvement of the government in the local startup ecosystem.

A report by Magnitt shows that the UAE remained the most active startup ecosystem in the region with 26 per cent of all deals, followed by Egypt (21 per cent), and Lebanon (13 per cent).

The Magnitt study shows that the number of investments in Mena-based startups was up 31 per cent in 2019, with 564 investments and $704 million in total funding, up 13 per cent compared to 2018, excluding previous mega-deals in Souq and Careem.

In 2019, Egypt, for the first time ever, accounted for the largest number of deals in Mena with a jump of 25 per cent, while the UAE accounted for the lion’s share of total funding and a surge of
60 per cent.

Eli David, chiefexecutive officer of StartupBlink, said good startup ecosystems are fundamental. They create jobs, boost the economy, increase tax revenue, improve quality of life and urban innovation, and attract and retain talent. “As an entrepreneur, location will greatly influence the chances your startup will succeed.”

David said knowing how well your ecosystem performs is also important. “Corporations use these rankings to make decisions about future expansion, universities and consulting agencies use them for research, and governments and local development organisation use them to gauge how well their programs are paying off.”

Pakiza Abdulrahman, manager, Startups at Bahrain Economic Development Board, said picking a startup location is one of the most important choices a founder can make, affecting everything from taxation levels to market access and the cost of doing business.

“Startups coming to Bahrain join a thriving ecosystem that combines pro-enterprise regulation with competitive costs, backed by the support of a government that listens – not to mention our unrivalled access to the $1.5 trillion GCC market,” said Abdulrahman.

“We are delighted that the Bahrain approach – and that of the wider Arab region – continues to gain recognition and we look forward to enhancing our support for the startups of tomorrow and today,” said Abdulrahman.

Bahrain offers startups an ideal testbed location for new ideas, combining pro-enterprise government policies with an ever-evolving ecosystem and a wide pool of international talent.

Source:https://www.khaleejtimes.com/business/global/uae-stays-in-top-50-startup-destinations

The UAE’s Ministry of Finance (MoF) ruled out any plan to hike value-added tax (VAT) following Saudi Arabia’s announcement of a three-fold increase in VAT on Monday.

VAT was introduced in the UAE on January 1, 2018 at five per cent on several goods and services.

Younis Haji Al Khoori, Undersecretary of MoF, said the focus is to work with all government entities to assess the priorities for the post-Covid-19 stage. Furthermore, the ministry will reorient the financial resources to prepare for the future and continued growth to ensure the security and safety of the communities.

In a surprise move, Riyadh increased VAT rate from five per cent to 15 per cent and also suspended the cost of living allowance to increase revenues with effect from June 1, 2020.

Sources and industry executive privy to the matter said that contrary to the Saudi move, the UAE was mulling dropping VAT temporarily until the situation surrounding Covid-19 is stabilised and the economy returns back on track.

Also, many European and Asian countries are turning to emergency tax breaks to support their economies against the Covid-19 threat. India, China, Finland, South Africa, Bulgaria, the US and the EU have announced some form of relief for their businesses and consumers in taxes to cope with the virus.

“We at the MoF are studying our financial systems to ensure their readiness to manage the next stage and support all vital sectors. We are devising several programmes and projects to enhance our ability to continue the development process and to put people as our top priority. This is essential to build a secure future and achieve the well-being and stability of our society. The UAE has always been keen to take precautionary measures and launch financial initiatives, which protect the national economy and support various business sectors in the country,” said Al Khoori.

Analysts told Khaleej Times that increasing VAT would hurt the UAE’s non-oil sectors and also dampen consumer confidence at a time when the governments around the world are trying to stimulate demand to boost economies.

Khatija Haque, head of Mena Research at Emirates NBD, said hiking VAT in the UAE would be counterproductive as the emirate’s budget commitments are not as large as Saudi Arabia’s.

“While we do expect the UAE’s budget deficit to register a significant deficit of around 10 per cent of GDP in 2020, this follows two years of budget surpluses. Raising VAT in the UAE at a time when consumers are already struggling with layoffs and paycuts and businesses have seen demand contract severely would be counterproductive. It would not raise non-oil revenue significantly and further weigh on already weak aggregate demand,” she said.

Source:https://www.khaleejtimes.com/business/vat-in-uae/uae-rules-out-any-change-in-vat-rate-after-saudi-hikes-it-to-15-