There is no better place in the world to be an entrepreneur at this time than right here in the UAE. When it comes to business – and more and more those startups in particular – the UAE is where it’s at. And it’s not just a gut feeling of mine: according to the latest figures from the Department of Economic Development (DED), Dubai alone has seen a 13% year-on-year increase in companies registering for business licenses.
As for what makes the country as a whole such a hub for the business-minded right now, the list is a long one. There are, of course, the stats many of us will already be aware of. For starters, the UAE is the second fastest growing economy in the MENA region, behind only Qatar. Then there is the fact that in a report by American think-tank, The Brookings Institution, Dubai is ranked as the world’s fifth fastest growing city economy, serving as “a global hub for transportation, tourism, trade and professional services”. The large available workforce ready to make it all happen, along with a very competitive tax rate of about 0%, contribute nicely to rounding out the picture.
Dubai has seen a 13% year-on-year increase in companies registering for business licenses.
Here now a closer look at five things that are currently exciting entrepreneurs in Dubai and the broader UAE as we journey into the second half of the 2010s, with apparently no slowdown in sight of “this run” we have been on for so long.
1. Expo 2020 is on its way
Having won its bid to host this prestigious event back in 2013, Dubai Expo 2020 is now less than four years away. When the conference hits our shores, it will be the first time the event has been hosted in the Middle East, and it brings with it many advantages for our city and country – from the tangible to the cultural.
Expo 2020 gives the UAE a unique opportunity to promote itself to a global business audience, promoting stronger links with countries – and investors – from around the world. To see the impact a world exposition can have on a host city, look no further than Montreal, Canada, which saw astronomical growth after hosting the event in 1967. Expo 67 acted as a catalyst for significant infrastructure improvements from new highways to state-of-the-art bridges and tunnels that better connected the city. More recently, Expo 2010 in Shanghai gave China the opportunity to showcase its modern city to the rest of the world and boost international relations by promoting itself as a forward-thinking and technologically advanced nation.
2. A welcoming landscape for startups
While we know business is booming for established organisations in the UAE, what about those startups? In the past years, the level of entrepreneurship in Dubai and across the country has soared, with a whole host of hugely successful startups choosing the UAE as their headquarters.
These include famous names like Dubizzle, which recently sold a 51% stake to global classifieds giant OLX; crowdfunding site Eureeca, which expanded its operations into the UK last year; and the personal finance app, Wally, which has been the number one finance app in 22 countries around the world.
Thanks to a number of government initiatives, the actual mechanics of setting up a company in Dubai and the UAE are very straightforward – and can even be achieved within a matter of weeks. On top of that, the government of Dubai, in its “Vision 2021 National Agenda”, put new business at the heart of its plan for long-term economic stability, and set out to facilitate this through favourable business regulations and a state-of-the-art investment infrastructure designed to support small and growing organisations.
In the last five years, the level of entrepreneurship in Dubai and across the country has soared.
3. A diverse economy
An accusation that is often levelled at the UAE when it comes to its booming economy is that is an empire built on oil, and when barrel prices take a hit so too will the country. There is no doubt that Dubai’s oil discoveries decades ago made a tremendous contribution to transforming it from a small trading community in the 1960s to one of the most vibrant social and business locations in the world, but Dubai has worked very hard to ensure its foundation would be built on much more.
Thanks to various government strategies aimed at diversifying the economy, oil revenues today only account for around 5% of Dubai’s GDP – with the service industry accounting for over 70% . In the UAE as a whole, the large and diverse non-oil sector accounts for almost 70% of the nation’s GDP, which is helping to promote more sustainable growth in the private sector as investors and business owners show continued faith in the economy.
Oil revenues today only account for around 5% of Dubai’s GDP.
4. The buzz of the bright lights
OK, so this one is somewhat subjective, but let’s face it, who wouldn’t want to live and do business here? It’s just plain exciting, and Dubai knows it, and the tourists know it, and those of us living here know it.
The city is like a triple espresso on the rocks shot through a straw. The energy here is incredible, and bright lights, flashy cars, giant skyscrapers and “five-star everything” are looked upon with awe from every corner of the world. And suffice it to say, it is far from just me who feels this way.
In a 2012 report titled “Why Dubai”, the Dubai Foreign Direct Investment Office (Dubai FDI) found that it is, in fact, Dubai’s incredible lifestyle and cultural choices that are among the main reasons why both people and businesses move to and invest in the city. The study found that for a vast number of multinationals who set up in Dubai, lifestyle factors – such as shopping, leisure and entertainment – were just as much of an attraction as the city’s infrastructure and proximity to key markets in both the East and West.
And I have to say, I am not the slightest bit surprised. If New York is the city that never sleeps, then Dubai is a certified insomniac. You simply never lose the buzz that comes just from being out here. In fact, every time I get back from a holiday or business trip abroad, I can feel my energy levels rising back up to those “Dubai levels” that I simply have not experienced anywhere else in the world to date. It is, quite simply, “in the air”.
5. 0% tax
I know. I know, I know. I mentioned this upfront and in other articles. But who can get enough of hearing about this? And no piece on the lure of the UAE would be complete without mentioning its highly favourable tax rates in comparison to the rest of the world. Taxation across the UAE is effectively zero, with the exception of the oil and banking industries.
Now sure, VAT is on the way, and rumours are floating about that UAE government drafting plans to introduce a flat corporate tax rate across the country eventually (hey, of course we know it is inevitable), but as it stands, we should still be looking forward to a lot of years of this very favourable situation.
Neil Petch; Chairman at Virtugroup
With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching Virtugroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.