Business Setup in the UAE: How the UAE Strengthened Its Financial Sector Performance with Strategic Decisions?

The UAE continues to reinforce its reputation as a global hub for investment and business growth. In 2023, the UAE government implemented 151 key financial decisions aimed at enhancing fiscal efficiency, sustainability, and competitiveness.

These initiatives paved the way for the nation’s ongoing journey to position itself as a world leader in finance, trade, and investment. For foreign investors and entrepreneurs exploring business setup in the UAE, these policy advancements represented a stronger, more stable economic landscape and an even more favorable environment for foreign direct investment (FDI). 

- A Strong Framework for Financial Stability and Economic Growth 

The review led by H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Prime Minister and Minister of Finance, highlighted how these financial measures align with the UAE’s long-term economic diversification goals. 

The UAE’s financial strategies have been pivotal in strengthening public finance systems, boosting transparency, and ensuring resource sustainability—all while maintaining a resilient economy that supports global investors. 

To enhance fiscal efficiency, the government enacted 15 new federal laws within the financial sector and 62 regulatory decisions to optimize financial management. These covered areas include tax regulation, government services, and resource allocation.  

- International Collaboration and Agreements 

A cornerstone of the UAE’s financial policy is its strong commitment to international cooperation. In 2023, the UAE signed eight new international agreements, reinforcing its network of economic partnerships and investor protections. 

These include: 

• Four investment protection agreements with Côte d’Ivoire, Mozambique, Barbados, and Guyana, expanding the UAE’s network to 112 total agreements. 

• Four double taxation avoidance treaties with Côte d’Ivoire, the Czech Republic, Tanzania, and Guyana, bringing the total to 147 global agreements. 

Such agreements are crucial for investors seeking company formation in the UAE. They eliminate the risk of double taxation and provide legal safeguards for capital and returns, thereby promoting confidence and long-term commitment among global investors. 

 - Key Achievements: Strengthening Global Competitiveness 

The UAE’s financial reforms have translated into measurable success on the global stage. In 2023, the country achieved top global rankings in several key indices: 

• 1st in government spending efficiency 

• 1st in the government budget balance to GDP ratio 

• 1st in adaptability of government policy 

• 1st in financial openness 

 These achievements highlight the UAE’s adaptability, robust fiscal management, and forward-thinking governance, factors that attract international investors and businesses looking for long-term stability and growth opportunities. 

The UAE’s advanced digital infrastructure, combined with a flexible legislative framework, continues to create opportunities across financial, economic, and investment sectors. This environment supports both startups and multinational corporations seeking mainland business setup in the UAE or in its free zones.

- Building International Partnerships and Investor Confidence 

Beyond internal reforms, the UAE has taken a strategic approach to global partnerships, engaging with international ministries and financial institutions to strengthen its position as one of the most attractive business destinations in the Middle East. 

By adhering to international competitiveness standards, promoting transparency, and ensuring smooth tax information exchange, the UAE continues to enhance its reputation as a safe and sustainable investment hub. These steps are part of a broader vision to attract USD 150 billion in foreign direct investment (FDI) by 2031. 

In 2023, these strategies yielded visible results as the UAE ranked among the top 10 countries worldwide in FDI inflows, underscoring growing investor confidence in its business environment.

- Fiscal Reforms and Sustainable Development 

Another highlight of 2023 was the UAE’s transition to the accrual basis of accounting, in accordance with the International Public Sector Accounting Standards (IPSAS). This shift improves financial reporting, accountability, and transparency, which are crucial factors for sustaining investor trust. 

The government also launched an extensive real estate asset database valued at approximately AED 62 billion (USD 15 billion) and restructured franchising fees for telecom operators, both of which contributed to enhancing the efficiency and sustainability of national resources. 

Furthermore, the update of the Federal Government Public Debt Strategy (2021–2023) showcases the UAE’s commitment to maintaining fiscal balance while funding development projects that drive non-oil economic growth. 

- What Does It Mean for Foreign Investors? 

For foreign entrepreneurs and corporations planning company setup in Dubai or other UAE free zones, these reforms offer several tangible benefits including: 

• Greater legal and financial transparency 

• Simplified cross-border transactions through double tax treaties 

• Enhanced investor protection via international agreements 

• Stable financial policies ensuring predictable business operations 

• Continued government focus on non-oil sector diversification 

 - Looking Ahead: Continued Financial Excellence 

The UAE’s 151 financial decisions in 2023 underscore a clear vision: to strengthen financial governance, attract sustainable investment, and maintain economic leadership in the region. 

Following the impressive results of 2023, the UAE Ministry of Finance reaffirmed its dedication to maintaining strong financial performance through new laws and policies in alignment with the UAE Economic Principles Document. 

With continued reforms, international collaborations, and a dynamic investment climate, the UAE now stands as one of the most promising destinations for business setup in 2025 and beyond. 

The UAE’s strategic financial decision also aims to position the country as a premier global destination for foreign investment, a goal further solidified by its selection to host the 2026 European Bank for Reconstruction and Development (EBRD) Annual Meeting and Business Forum.