Dubai Expo 2020, the first world expo to be staged in the Middle East, North Africa, and South Asia region, is expected to boost Dubai’s economy with multiple sectors and industries, benefitting from the infrastructure development, huge numbers of visitors, and increasing population. But the highly anticipated event will also offer great opportunities for local and international businesses.
During its six-month period, Expo 2020 is expected to attract some 25 million visitors. As the world’s largest platform showcasing counties, enterprises, and inventions, the event is logically of great interest to businesses and corporations across the globe. It will offer participants not only global exposure, but also opportunity for expansion, innovation, and interaction with potential new clients, partners and markets. With the multi-billion investment plan for the expo – $9 billion only for infrastructure – however, local businesses will benefit largely from the various projects and tenders, granted by the government and organizers. Along with construction, tourism and hospitality, and retail, other sectors that will see growth are real estate, transportation, banking, and trade. In fact, many of these are already experiencing the upturn after the Expo 2020 announcement, with strong recovery in the property market, for example, in the past couple of years.
According to data from Dubai Trade, the emirate’s foreign trade hit AED 1,392 trillion in 2013 and accounted for nearly 30 percent of Dubai’s GDP. With government spending on infrastructure and increase in demand of goods, foreign trade is expected to reach AED 4 trillion by 2020. As development on and around the Expo site continues, it will boost construction, transport and logistics, wholesale trade, as well as manufacturing industries, which will provide the essential building materials. In addition to the already present growth in real estate, more hotels, residential and commercial buildings and complexes will be required, which will further boost the rise in the market. Communication and business services will also thrive in this active environment. All these will stimulate small and medium enterprises (SMEs), which are in fact, the majority of companies in Dubai, although there is a number of large corporations, as well.
Along with the Expo site in Jebel Ali, covering 438 ha and costing between $2 and $4 billion, Dubai is also working on a large number of other mega projects. These include Burj 2020, Dubai Parks and Resorts, and the ambitious Mohammed Bin Rashid City, which will comprise of around 100 hotels and Mall of the World – expected to become the largest shopping mall in the world after completion. These multi-billion projects will further contribute to the emirate’s booming and dynamic economy and of course, to growth in tourism industry. In 2013, tourism represented 20 percent of Dubai’s GDP and it is expected to grow at a rate of 7-9 percent in the years by 2020.
While there were concerns of a repeating bubble scenario several months ago, experts are now confident that the emirate’s growth is healthy and different from the 2005-2007. There is much more regulation – not only in the real estate market, but also in various other sectors such as banking and finance, tourism and hospitality, healthcare, and many more. With the introduction of new laws, the government is creating a more attractive corporate environment – more transparency, better communication between the private and the public sector, and so on. A good example for that is new companies law, which is still to be enacted. It deals with foreign ownership, limited liability companies, public and private joint stock companies, investment funds, and so on. Of course, another great opportunity for businesses are free zones, which offer full foreign ownership of companies, 100% exemption from personal income tax and corporate taxes for 50 years, and complete repatriation of profits, among others.
With Expo 2020 five years away, Dubai is preparing massive infrastructure, as well as more attractive business environment and legislative basis for both existing and startup companies – local and international.