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Saudi Arabia’s big-event dreams face a reality check as a skills shortage threatens to slow progress on giga-projects ahead of the 2034 World Cup and Riyadh Expo 2030. In the UAE, the Ministry of Finance has rolled out a new tax option for unincorporated partnerships, offering greater flexibility for professional firms and joint ventures. Meanwhile, Saudi oil giant Aramco is exploring asset sales to free up cash as lower oil prices squeeze earnings and international ambitions grow.

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Skills Shortage Casts Shadow Over Saudi Arabia’s Big-Event Ambitions

🔹 What Is It About

• Saudi Arabia is facing a critical shortage of skilled workers in its tourism and hospitality sectors as it gears up to host a series of global mega-events, including the 2034 FIFA World Cup, Riyadh Expo 2030, and Asian Winter Games 2029.

• Jerry Inzerillo, CEO of Diriyah Gate Development Co., flagged the issue during a panel hosted by the Atlantic Council, calling it the biggest challenge facing Saudi giga-projects.

• Diriyah is one of five state-backed giga-projects, collectively requiring up to $1 trillion in investment and serving as key pillars of the Vision 2030 economic transformation plan.

🔹 Why It Matters

• The success of these global events — and the larger Vision 2030 agenda — depends on having a workforce capable of delivering world-class experiences in design, tourism, entertainment, and marketing.

• Despite a talented population, the lack of trained professionals is driving up labor costs, as companies compete for a small pool of qualified Saudis due to strict Saudisation quotas.

• Saudi unemployment has declined, notably among women, but the shortage threatens to undermine the country’s ability to execute on its ambitious plans — including attracting millions of visitors and international attention.

🔹 What’s Next

• Saudi Arabia must accelerate training programs and education reforms to develop local talent in underrepresented industries.

• Collaboration between government, giga-project developers, and private companies will be essential to close the skills gap.

• As timelines for major events approach, expect more incentives and pressure for companies to localize their workforces — potentially reshaping the region’s labor market and project costs.

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Markets

UAE Introduces New Tax Option for Unincorporated Partnerships

📰 What Is It About

• The UAE Ministry of Finance has introduced a new tax treatment option for unincorporated partnerships, allowing them to elect to be taxed as a legal entity instead of taxing individual partners separately.

• This is part of Cabinet Decision No. 100 of 2024, issued under Federal Decree-Law No. 47 of 2022, which governs corporate taxation.

• Unincorporated partnerships — such as joint ventures, law firms, or real estate partnerships — are business arrangements not registered as separate legal entities, but still conduct commercial activity in the UAE.

• With prior Federal Tax Authority (FTA) approval, such partnerships can now be treated as resident legal persons for corporate tax purposes.

❗ Why It Matters

• This move aims to boost tax transparency and align UAE tax law with international standards, improving ease of doing business.

• It provides clarity and flexibility for unincorporated partnerships, many of which have complex structures or multiple partners.

• The ability to be taxed at the partnership level rather than at the individual partner level allows for streamlined reporting, simplified compliance, and potential access to corporate tax exemptions and reliefs.

• It supports the UAE’s corporate tax regime introduced in 2023, where businesses with income above AED 375,000 are taxed at a 9% rate, and individuals are subject to tax only if business turnover exceeds AED 1 million annually.

🔍 What’s Next

• Partnerships can apply to the FTA to opt into this tax treatment, particularly if they:

  • Have multiple or foreign partners

  • Want centralized compliance or simplified legal liability

  • Plan to attract external investors and prefer a clear capital structure

• If approved, the partnership will be treated like any other resident company, paying 9% corporate tax on total taxable income.

• If not opted in, partners continue to pay tax individually on their share of the profits.

• Analysts expect this flexibility to benefit professional firms, real estate partnerships, and foreign joint ventures with UAE-sourced income.

Reuters Exclusive: Aramco Explores Asset Sales Amid Global Push And Oil Price Pressures

🔹 What Is It About

• Saudi oil giant Aramco is exploring potential asset sales to raise funds, according to sources quoted by Reuters familiar with the matter.

• The move comes as the company contends with lower crude prices and aims to accelerate its international expansion.

• Investment banks have been invited to pitch ideas for monetizing Aramco’s assets, though specific assets and banks were not disclosed.

• Aramco plans to reduce its dividend payout by nearly a third this year due to declining oil revenues.

• The company has a vast business portfolio, including aviation, construction, and sports, and has previously sold stakes while retaining majority control.

🔹 Why It Matters

• Aramco is the financial backbone of Saudi Arabia, and any move it makes has significant implications for the kingdom’s economy.

• The potential asset sales are part of a broader cost-cutting and efficiency strategy amid pressure from the Saudi government.

• With oil prices hovering around $60 per barrel — far below the IMF’s estimated $90 per barrel needed for Saudi Arabia to balance its budget — the kingdom is facing a widening fiscal deficit.

• The push for asset monetization signals a shift in how the kingdom manages its state-owned enterprises in a volatile energy market.

🔹 What’s Next

• Aramco will evaluate proposals from investment banks to determine how best to proceed with asset sales.

• Analysts expect the company to retain control over core assets, replicating previous infrastructure deals.

• The funds raised could support Aramco’s global ambitions, including recent investments in China, Chile, and the U.S.

• With the kingdom doubling down on economic diversification, more pressure is likely on national champions like Aramco to generate cash and support Vision 2030 projects.

🔍From Smashi Business’ Desk

• Pro-Palestinian staff say Microsoft has quietly filtered out key terms from internal emails.

• “How Do You Run Out of $400 Million?” Saudi entrepreneur questions QIA-backed Builder.ai's insolvency.

• Dubai founder Maryam AlMansoori opened up about the hidden emotional toll of leadership.

🔍In other news…

• Arab war-torn countries severely hit by US tariffs, says IMF.

• DLD launches MENA’s first tokenised real estate project through ‘Prypco Mint’ platform.

• New oversight rules in Dubai set clearer penalties for financial misconduct.

• Saudi Arabia's digital economy grew in 2023 and now makes up 15.6% of the country’s GDP.

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