The UAE is taking steps to shore up its banking sector and reputation as a tax haven. On Tuesday, its central bank approved an emergency support package to let banks draw down reserves, ease liquidity requirements, and delay classifying loans as non-performing for customers hit by the current crisis. The central bank also emphasized its $270 billion in foreign exchange reserves, aiming to ward off worries about its currency peg to the US dollar.
The UAE’s Federal Tax Authority is also considering relaxing rules so that expats can spend more time abroad without losing their tax status, as the country tries to incentivize residents who fled the Iran conflict to return, the Financial Times reported. People who have left are likely to be given leniency over the minimum number of days they need to spend in the UAE to qualify as tax residents, at least temporarily. The steps are among the first by a Gulf state to bolster its economic resilience to the war.