The coronavirus pandemic has confined one fifth of the world's population to their homes and the number of infected people has risen to nearly half a million. Unfortunately, the victims of coronavirus are not limited to those who have contracted the disease. Millions of people are at risk of losing their source of income overnight.
In Lebanon, on Tuesday, taxi driver Salim Khadouj set himself and his car on fire in despair, after receiving a fine that he could not afford to pay for violating lockdown rules. He is still recovering from severe burns at the hospital. The father of four and sole breadwinner of his family had seen his financial situation deteriorate over the past months and felt he had no choice but to put his health at risk to provide for his loved ones. The country is reeling under an unprecedented financial crisis, which is now further compounded by the coronavirus.
Mr Khadouj’s story is not an isolated case. From Lebanon to the US, France, the rest of Europe and indeed, across the world, the pandemic has put businesses big and small in a tight economic spot, jeopardising the livelihoods of millions. In the US alone, the number of people who have lost their jobs and now seeking unemployment benefits has soared in just a few weeks.
In response, communities have shown extraordinary solidarity. A GoFundMe page has been set up to help Mr Khadouj and it garnered more than $10,000 in one day.
Governments and responsible companies have also launched initiatives to save jobs and, by extension, the economy. Countries around the world are announcing initiatives to deal with this unprecedented situation. The US is planning to roll out a stimulus package of $2 trillion to curb the economic impact of the virus.
Economists are expecting the impact of COVID-19 to be far-reaching and it is already being felt, especially in the tourism and aviation sectors. Airplane maker Boeing, for one, is seeking $60 billion in US government loans, but while big companies usually get their fair share of support during times of recession, it is important to also provide help for the small and medium enterprises, the businesses run by ordinary citizens.
In the words of Sheikh Mohammed bin Rashid, Vice President and ruler of Dubai, now is a time “for unity, cooperation and solidarity to fight the worst enemy of humankind.” Sheikh Mohammed Bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces said "I'd like to recognise all the small, medium and large businesses in the UAE that have risen up with initiatives and programs that support the people of the UAE'.
In times of crisis, big businesses need financial help, but the safety net needs to be expanded to cover smaller businesses
The UAE Central Bank has allotted Dh126.5 billion to keep the economy afloat. Electricity bills have been reduced by 10 per cent for people and businesses. Abu Dhabi has decided to waive road toll charges and cut utility bills for the rest of the year to support everyone during these difficult times.
Al Futtaim Group also announced it will offer Dh100 million fund to lend a helping hand to retailers affected by the pandemic, including three months of rent relief in its malls across the UAE. Abu Dhabi government has announced that financial institutions have come up with 17 financial initiatives to help individuals and small and medium businesses.
Some companies have found creative ways of saving their employees’ jobs. Majid Al Futaim's Vox Cinema and Ski Dubai will redeploy 1,000 staff workers to Carrefour supermarkets, which are facing a larger number of customers during the current crisis.
In times of crisis, big businesses need financial help, but the safety net needs to be expanded to cover smaller, family-run businesses and neighbourhood stores. A holistic approach is required to curb the spread of coronavirus, but also to save jobs, and provide relief for individuals. We must come together to save lives - and livelihoods.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
