The UAE Advances as a Global AI Powerhouse

Through a combination of strategic investment, regulatory foresight, and partnerships with top technology firms, the country is positioning itself as a global AI powerhouse. With AI expected to be a major driver of economic growth, the UAE is well on its way to becoming a world leader in artificial intelligence and digital transformation.

Strategic Investments and Innovation Position the UAE at the Forefront of Artificial Intelligence

The UAE is solidifying its role as a global leader in Artificial Intelligence through strategic investments, supportive regulations, and a commitment to digital transformation. AI is projected to contribute $100 billion to the country’s GDP by 2030, reinforcing its status as a premier destination for AI talent and startups.

AI Driving Economic Growth and Innovation

The UAE continues to establish itself as a major player in the AI sector, with a clear vision that extends beyond economic benefits. According to a PwC report, AI is expected to contribute 13.6% of the UAE’s GDP by 2030, placing the country among the top three globally, behind only the US and China. The nation’s focus on AI is not just about technology but about fostering a long-term economic and societal transformation.

The country’s regulatory landscape plays a critical role in its success. Analysts highlight how the UAE’s frameworks support innovations in financial technology and digital payments while maintaining robust cybersecurity measures. These regulations encourage investment and protect businesses and individuals, making the UAE a favorable environment for AI-driven enterprises.

Government Leadership in AI Implementation

Abu Dhabi is spearheading government adoption of AI, aiming to become the first fully AI-powered government. This initiative includes the full integration of sovereign cloud computing and a complete digital transformation of government operations. Such efforts set a benchmark for other nations looking to modernize their public sectors with AI.

The UAE’s early adoption of AI strategies—starting with its 2017 National AI Strategy—has laid the foundation for its rapid growth. With a target of becoming a global AI hub by 2031, the strategy prioritizes advancements in education, healthcare, transportation, and energy. This focus ensures that AI development aligns with national priorities and serves as a catalyst for broader technological progress.

Collaboration and Talent Development

The UAE’s success in AI is further strengthened by strategic partnerships with industry leaders such as NVIDIA, Google, and Oracle. These collaborations enable the country to stay at the forefront of AI innovation while attracting top talent from around the world. The UAE has seen a 40% increase in AI professionals since 2022, further solidifying its position as a prime destination for experts in the field.

FTA waives Penalties for late Corporate Tax Registration

The FTA, in collaboration with the Ministry of Finance, has initiated a temporary waiver of these penalties. This initiative encourages voluntary compliance and provides a grace period for entities to fulfill their tax obligations without incurring fines.

Termination of Fixed-Term Employment Contracts under the New Saudi Labor Law

Recent changes in Saudi labor law now allow employees to resign from fixed-term employment contracts early. These reforms provide more flexibility and increase mobility in the labor market, contributing to a more dynamic working environment in Saudi Arabia.

Tax Audits in the UAE

Tax audits in the UAE often trigger apprehension among businesses due to the country’s rigorous tax compliance regime. This article outlines the legal foundation of tax audits under UAE law, delineates the rights of both the Federal Tax Authority (FTA) and taxpayers, and provides strategic guidance for businesses to prepare effectively. Emphasizing readiness, procedural awareness, and system reliability, the article aims to foster a proactive compliance mindset among UAE-based enterprises.

FTA Publishes New Guide on Interest Deduction Limitation Rules under UAE Corporate Tax Law

The guide reflects the UAE’s intention to bring its corporate tax regime in line with international best practices, particularly the OECD’s BEPS (Base Erosion and Profit Shifting) framework, specifically Action 4, which addresses excessive interest deductions. Companies are well advised to incorporate these rules into their tax planning strategies to avoid adverse consequences and to benefit from the flexibility that the legislation offers when applied correctly.

Author

Omar Sami

Managing Partner
Rechtsanwalt | Lawyer