With 47 Banking and many more financial institutes, the financial sector is highly competitive in UAE. Considering that they operate with little or no regulatory framework applied on their customers, UAE banking has developed its own flavor. Financial statements are re-organized for internal assessments of credit analysis. This is due to the fact that most companies do not show Positive Net Income, with all the Operating Income paid to the management/Directors as management fees. And this is only one example of financial manipulation that occurs here.
But this is set to change. Among the proposals in the pipeline is a Valued Added Tax and allowing businesses to have 100% ownership of companies outside the freezone areas. (compared to 51% - 49% ownership structure at present) All these regulations will help UAE to develop their financial sector.
Yahoo News has a related news article.
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