Author: Mohammed Shahraiz Rahiman

The United Arab Emirates is a country famous for its commitment to integrating futuristic technology in the daily lives of its people. This is where the implementation of augmented/virtual reality can impact the economy directly. Both AR & VR are metaverse enabling technologies, which support over 6,700 jobs and contribute around USD 500 million to the GDP. The Dubai government aims to create over 40,000 jobs & bring in over USD 4 billion (1 per cent) to the emirate’s economy with Metaverse and Web 3.0 based technologies. Several emirates such as Dubai, Abu Dhabi, Sharjah and Fujairah already have smart city initiatives in place, which aim to fulfil the following goals: 

• Resource utilisation for maximum efficiency 
• Integration of services 
• Creating enriching lifestyle & business experiences

Augmented/Virtual Reality: Impact on economy 

Augmented Reality and Virtual Reality can have a lasting impact on the UAE economy. As an industry, it is expected to boost global economy to USD 1 trillion (1.8 per cent) by 2030. In businesses, AR/VR can help with developing modern customer experiences, faster product development, improved workforce training, and ultimately better efficiency & collaborative willingness. A breakdown of both techs shows that AR will contribute USD 1.1 trillion to global GDP in 2030. Meanwhile, VR will have a USD 0.4 trillion contribution to the same.  

Difference between Augmented Reality and Virtual Reality 

Both VR and AR have been around for a while now. They have emerged as overarching trends that are gaining momentum. Augmented Reality (AR) refers to the enhancement of the physical world through the integration of digitally generated content. This includes visual elements, sound or other sensory stimuli. In AR, users can interact with people while remaining accessible on the digital plane (e.g. navigation applications, text messages, etc.).

On the other hand, Virtual Reality (VR) is a 3D simulation that submerses the user in an interactive environment. This immersive experience is created through the use of electronic devices like headsets. The Oculus is among the most popular VR hardware in the world right now. Currently, virtual reality is highly popular in the gaming industry, where it has applications in creating experiences that completely go against elements of reality. 

The impact of AR and VR in the UAE business world 

Augmented/Virtual Reality are no longer just used for experiential enhancement. As the technology has developed, businesses have started using them for enhancing product design & delivery and reducing risk. The biggest impact that augmented/virtual reality has on the economy is that it makes training employees and testing procedures far easier. This is especially relevant for simulating realistic on-job scenarios and recreating high-risk environments.

An example of this is Emirates NBD, one of UAE’s largest banks, forming their own Virtual Reality academy for their employees. The organisations use virtual environments to help employees go through real-life issues, but from the perspective of the customer. In the current marketplace, the integration of AR/VR can also help enhance your brand image as an innovative and forward-thinking company. Keeping up with the advances of time helps in creating better business networks, building beneficial partnerships, strategic investments and attracting fresh talent.

Businesses in Dubai have long since recognised the opportunities that AR/VR raise in creating new revenue streams while expanding existing ones. Industries like retail, hospitality and automotives are among the top three sectors which use augmented/virtual reality in their business practises to promote their products. Additionally, gaming and entertainment companies have already been using them to revolutionise their products’ experience.

Economic impact of Augmented/Virtual Reality on different sectors 

The impact of AR and VR in the UAE are not just limited to gaming. These technologies can help boost other industries such as e-commerce, retail and other consumer leisure experiences. Here is how augmented reality and virtual reality can help enhance the scope of operations of different industries.  

Healthcare 

Potential contribution to global GDP by 2030: USD 350.9 billion 

The biggest benefit of Virtual Reality in healthcare business is that it helps create risk-free simulations for medical students to practise their skills in the operating theatre. Augmented reality can also help improve communication with medical experts on a global level resulting in faster information sharing.

Virtual Reality has proven to be effective in treating medical issues such as balance disorder, cerebral palsy, Parkinson’s Syndrome, etc. The UAE’s Ministry of Health & Prevention (MoHAP) intends to integrate VR rehabilitation for physiotherapy. Virtual reality can reach even the remotest corners of the world to train medical experts. Thus, leading to better healthcare access and improve quality of service. 

Training & development 

Potential contribution to global GDP by 2030: USD 294.2 billion 

AR and VR can create stimulating learning experiences hence leading to effective teaching. It will be possible to create extreme and unlikely environments to boost learner engagement and encourage participation. With the help of virtual classrooms, learning become more accessible, and can reduce the burden of additional costs such as travel, accommodation, etc. VR/AR can further add to the training of employees and create a safe space to experience otherwise impractical or unsafe environments. 

Products and service enhancement 

Potential contribution to global GDP by 2030: USD 359.4 billion 

Augmented/virtual reality can help create 3D prototypes that can completely revolutionise the design and manufacturing of products. This leads to an efficient, productive and improved end product. The Dubai Electricity and Water Authority (DEWA) provide smart helmets and goggles to their engineers and technicians ensure faster communication while conducting repairs.

The use or AR and VR in the manufacturing process can help create a faster workflow with a better understanding of the assembly process. This will lead to reduction in faulty manufacturing thus leading to reduced costs.

Process improvement 

Potential contribution to global GDP by 2030: USD 275 billion 

VR and AR are opening new channels into improving the accuracy of employees and processes. People in the tech field can use an AR interface to access repair diagrams in real time. This way, you can identify problems faster and conduct more efficient repairs/maintenance. The logistics industry also uses smart glasses which allows for workers to streamline their daily process. They can pick the product information, highlight the location, and display product details and packaging instructions. AR/VR can help to create an immersive retail experience, such as virtual fitting rooms or using AR apps to test furniture looks in the comfort of your home.

Bring in the future today 

Both Augmented Reality and Virtual Reality are essential parts of the 4^th Industrial Revolution that is taking place. The economic impact of artificial intelligence, metaverse, blockchain, Web3, AR/VR are far-reaching. It is bound to change numerous industries and Dubai aims to become the digital nexus for it. This makes it the ideal destination and time to invest in the artificial intelligence and augmented/virtual reality business.

Shuraa Business Setup is committed to helping emerging tech industries gain a foothold in the competitive market in the UAE. We track the latest business trends and follow UAE’s laws and customs to help you kick-start your virtual reality business in Dubai. Get additional benefits such as 100% company ownership, banking assistance, crypto payments, residency visa, PRO services and more. Call us at +971 44081900, WhatsApp on +971 507775554, or email at info@shuraa.com to get your journey going.

One of the most important aspects of starting a business in the UAE free zone is managing your finances. The way you opt to track and record your finances can make or break your company over time. Hence, it’s important to build financial literacy for entrepreneurs.

Once you understand and opt for an ideal solution, your company can grow much faster and efficiently. Continue reading to learn about why it is important, how to manage it, VAT and more.

Financial literacy for business

When starting your company, the cost of license isn’t the only key expense that you need to take into consideration. Although it does play an important role, it definitely is not the only essential expense.

There are other crucial spendings that you have to take into consideration. These include salaries for your employees, marketing budget, operational costs, office rents and much more.

After the process of your company setup is complete, you will most likely need access to capital down the line. This can be accomplished through business financing.

Regardless of the size of the company, most businesses seek capital infusions in order to meet short-term obligations. In addition, accounting roles are often overlooked but in fact, it plays a crucial role in the way your company functions.

The hack to balance your business’ finances

• Maintain accurate records and track them regularly
• Ensure you have a separate bank account for your business to keep a clear records of the flow of cash within the organisation
• Set aside savings from your income to be prepared for any setbacks
• Set a clear budget and compare the spendings every month to ensure you stay on track
• Keep track of other records such as VAT as well

Understanding Value Added Tax and the importance of bookkeeping

Value Added Tax is often referred to as VAT in the UAE. It was introduced in 2018 on 1st January and has been implemented as the general consumption tax of goods and services. This applies to all goods exchanged within the territorial area of the UAE.

The Federal Tax Authority’s VAT eligibility criteria are dependent on a company’s total turnover and total taxable expenses. Once a company is formed, they can register for VAT under one of two categories.

• Total sales
• Total expenses

These include the VAT amount paid for any expenses spent for your business. This could include costs such as VAT paid for machinery or other equipment. However, this is not applicable to tax paid internationally. 

For instance, if you were to purchase machinery internationally and paid tax for the equipment’s spendings, it will not be included as VAT expenses in the UAE. It would instead be considered as 0 rated VAT.

You must also take into consideration of the two types of VAT registration services in the UAE:

1.  Mandatory VAT Registration

2.  Voluntary VAT Registration

Mandatory VAT Registration in UAE

It is applicable on individuals or companies that have an annual turnover of AED 375,000 or more. If your business falls in this category, you are required to get a Tax Registration Number (TRN) to conduct your business in the UAE. You can then implement VAT on your supplies and collect VAT on behalf of the FTA. If you do not register for mandatory VAT, you will be required to pay a fine.

You are eligible to apply for Mandatory VAT Registration if you satisfy either of the following criteria:

• Your business turnover and imports were over AED 375,000 during the last 12 months
  OR
• You anticipate that your business turnover and imports in the next 30 days will be more than AED 375,000

Voluntary VAT Registration in UAE

It can be applied by individuals or companies that have an annual turnover of over AED 187,500 but less than AED 375,000. If your business falls in this category, you may apply for VAT registration and get a TRN, voluntarily. Should you choose to not register for VAT, you will not be fined nor will you face any legal issues as long as your total turnover is still below AED 375,000.

You are eligible to apply for Voluntary VAT Registration if you satisfy either of the following criteria:

• Your business turnover or taxable business expenses or imports were more than AED 187,500 in the last 12 months
  OR
• You anticipate that your business turnover or taxable expenses or imports in the next 30 days will be more than AED 187,500

When you do not have a Tax Registration Number (TRN), you are not eligible to mention VAT in your invoice. You will only be eligible to do so once your TRN has been generated. If you proceed to mention VAT in your invoice without a TRN number, there will be a penalty from the FTA. In addition, it is important to ensure that your company keeps records of all spendings and earnings of each year.

Need additional guidance?

Shuraa will help you get started with your company and ensure that the entire process runs smoothly.

Shuraa has been one of the leading business setup companies in the UAE for over 26 years. Furthermore, our goal is to help entrepreneurs build a foundation in the UAE’s thriving economy, from start to finish.

To get in touch with our expert business consultants, call us on +97144081900. Send a WhatsApp message for a chat query on +971507775554. You can also email us at info@shuraa.com. You can also get in touch with our international tax experts, visit https://bit.ly/2Wphtcq.