Dubai is boosting startups and SMEs – are you capitalising?5 July 2018 Category :
It’s good to know that the UAE government continues in its determined push to make it as easy as possible for entrepreneurs to start and grow an enterprise. Proof of this proactivity is in the avalanche of new initiatives aimed at cutting red tape and fostering growth.
Commenting on the World Economic Forum website, Dr Aisha Bin Bishr, Director General of the Smart Dubai Office explained: ‘We have established an international reputation as an economic and investment centre. And we have achieved this success by diversifying our economy through vast development in sectors such as tourism, real estate, retail, travel, logistics, and finance.’
In fact, the city’s Department of Economic Development (DED) has gone into overdrive to help entrepreneurs start and grow their ventures.
There’s a wealth of information out there, so to help out, I’ve pulled together the latest and most exciting entrepreneur-friendly initiatives from the Dubai DED (below), and I’ve summarised how they can help catalyse your business activities in the UAE.
What Dubai’s DED does for you
The Dubai DED is a government body that ‘is entrusted to set and drive the economic agenda of the emirate of Dubai’. Its objective is to support the transformation of Dubai into ‘a diversified, innovative service-based economy that aims to improve the business environment and accelerate productivity growth’.
The Dubai DED is a government body that ‘is entrusted to set and drive the economic agenda of the emirate of Dubai’.
This is great for Dubai as a city, but what about for your venture specifically?
The good news for startups is that the Dubai DED initiatives help business owners launch and expand their operations without the need for lengthy processes and administration. Here’s how:
1. Freeze on government fees
The recent decision to freeze government fees (such as business licensing and real estate approvals) for the next three years in Dubai was met with much praise, and relief.
The fee freeze comes at a time when many SMEs are facing challenges in securing funding for working capital and business expansion, with banks implementing tighter lending standards. Even more welcome after the UAE’s introduction of a 5% value-added tax (VAT) this year.
State news agency WAM reported in March that the move is aimed at ‘promoting Dubai’s economic competitiveness, enhancing social stability and supporting investments in Dubai’.
Dr Bin Bishr says digitalisation has played a key role in the transformation of Dubai into a global city, and regional business and tourism hub, opening up opportunities for startups and SMEs.
On the e-commerce front, help is at hand for licenced e-traders working from home. In a joint venture, the Dubai DED and Emaratech – part of the Investment Corporation of Dubai – have unveiled plans to launch DubaiStore, the first local online marketplace to focus on SMEs and home-based e-traders.
The new initiative, entitled Digital Economy Solutions (DES), will focus primarily on promoting businesses, and there’s no danger of direct competition since DubaiStore does not own or sell any products of its own.
Due to be launched in the third quarter of 2018, it will provide a platform for these licenced e-traders. Consumers can access a range of products, many of which are not found in the retail market, creating a new sales avenue for SMEs.
3. Stimulating competition
The support doesn’t stop there. The Dubai DED is implementing a new package of government reforms to stimulate competition and achieve sustainable economic development in Dubai, WAM reports. It includes:
- Proposals to allocate 20% of government tenders to SMEs – enabling smaller businesses to gain a foothold in government programmes that might otherwise have seemed out of reach.
- Exemptions from fines and trade violations – to reduce the financial burden on businesses.
- A retail cost reduction programme – to reduce operating costs in the retail sector and ensure retail real estate rent increases are fair and reasonable.
- A local production and procurement support programme – to encourage companies to procure goods and services from local suppliers rather than from abroad. This will support entrepreneurship and increase domestic investment in production by involving local commercial banks in extending facilities and financing to local firms, as well as enhancing cash flows in the SME sector.
- Continued support – to establish, grow and expand startups by attracting the world’s leading business incubators and accelerators with a global network of resources.
The Dubai government’s new package of reforms also includes developing low-cost family tourism systems through a timeshare basis, and the introduction of a mortgage law to enhance demand and prices in the real estate sector.
In terms of the government tender reform, it’s worth noting that before a business can submit a tender for a government job, they must first register with eSupply, the online eSupply portal operated by Dubai eGovernment and procurement firm Tejari. Also, as per dubai.ae, the official portal of the Dubai government, companies must be certain that they can meet departmental requirements before they’re considered eligible for hire.
There are also plans to encourage more involvement from international companies. The new reforms include a proposal for a consultative council whereby international companies will be invited to participate in shaping legislative changes needed to enhance investments and competitiveness. This will be managed by Dubai Chamber of Commerce and Industry according to Reuters.
4. Business as usual
Don’t forget, as well as these reforms, the Dubai DED also provides services to protect day-to-day business operations. This includes support with IP/trademark or agency complaints, payment vouchers, NOC registration and grievances. Assistance is also provided in the form of legal assistance such as help with sale of share contracts and advice on business laws and regulations.
5. Digital transformation
So we’re clear the Dubai DED offers a wealth of support for entrepreneurs, but this is only part of the story. As previously mentioned, Dubai is undergoing a massive programme of digital transformation set to bring major benefits for startups and SMEs alongside the rest of Dubai. Indeed according to Digital Middle East by Digital McKinsey, the UAE government leads the Middle East in digital adoption.
Indeed according to Digital Middle East by Digital McKinsey, the UAE government leads the Middle East in digital adoption.
The transformation is being driven by the government initiative Smart Dubai which describes itself as ‘anchored in the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum to make Dubai the happiest city on earth’.
Launched in 2014, the Smart Dubai initiative is now working towards a 2021 strategy that has six main action areas:
- A smart, liveable and resilient digital city.
- A connected, lean government.
- A globally competitive economy powered by disruptive technologies.
- An interconnected society with easily accessible social services.
- Smooth transport provided by autonomous and shared mobility solutions.
- A clean environment via cutting-edge ICT innovations.
As such, Smart Dubai is developing new technology such as internet of things (IoT) systems, data analytics, blockchain, hyperloop projects, innovative 3D printing, autonomous vehicles and drones, robotics, and artificial intelligence (AI) applications.
Moving forward – Dubai DED and your business
Entrepreneurs seeking to start or grow a business in Dubai should work with a company formation specialist to ensure they tap into the best support available when working with the Dubai DED. This is a great time to create and innovate in Dubai, and those who take advantage now stand all the more chance of gaining significant competitive advantage.
Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to firstname.lastname@example.org, or click here.