New businesses launched by entrepreneurs are undoubtedly important to economic development as they create jobs, fill gaps in the market and attract international talent.
And, as economies around the globe continue to recover from the negative impacts of the COVID-19 pandemic, it’s vital that government policies and initiatives are put in place to not only support but also measure entrepreneurial outcomes.
One nation that is well on its way to redefining itself as a global leader in this area is the United Arab Emirates (UAE).
As the UAE and Saudi Arabia begin to strategize their way out of relying purely on oil production as a wealth generator, entrepreneurship is taking off like never before.
Interestingly, these two nations have the highest numbers of internet users, according to a recent study by Proxyrack – a key indicator of widespread digital adoption. This finding coincides with a comprehensive action plan for Dubai to become the global capital of the digital economy.
Pulling out all the Stops
In the Global Entrepreneurship Monitor (GEM) 2022 ‘National Entrepreneurship Context Index’, the UAE took first place as the most favorable economy in which to launch a business, followed closely by Saudi Arabia.
GEM Executive Director Aileen Ionescu-Somers explains that as new players emerge on the world stage, governments would do well not to become complacent.
“The UAE is investing large amounts of money and large intellectual resources to develop how it can occupy a very important space in the entrepreneurship arena,” she says.
The Index, which examined entrepreneurship across 50 countries, included essential parameters that developed economies should be addressing. According to Ionescu-Somers, the UAE is focused in on these.
“The UAE is investing large amounts of money and large intellectual resources to develop how it can occupy a very important space in the entrepreneurship arena.” – Aileen Ionescu-Somers
“Our Index indicates that it has really pulled out all the stops to tackle each and every one of the parameters that we have identified at GEM as being the parameters that make contexts attractive to entrepreneurs.”
Set to become home to 20 unicorns (startups valued at more than US$1 billion) by 2031, as outlined by the Entrepreneurial Nation project, The UAE Centennial Plan 2071 confirms that the nation is thinking decades into the future when it comes to building a knowledge economy with a focus on entrepreneurship.
In a region where family-owned businesses contribute to 80 percent of the workforce, the government has also issued a new law that ensures such companies are led by successive generations within the family. There are also plans in place to accelerate the adoption of tech by family-owned businesses.
“In the Middle East, there is a tradition of family entrepreneurship, with informal investment from friends and family very common,” Ionescu-Somers says.
“But the government is really making an effort to point entrepreneurs to sources of formal investment as well, and to move that very much along.”
The Metropolis of Tomorrow
Not just a mecca for luxury consumers, the expat-friendly city of Dubai is fast becoming an attractive global hub for both investors and entrepreneurs who benefit from word-of-mouth marketing, a culture deeply rooted in business relationships and access to a wide range of business events.
“With its world-class infrastructure, strategic location connecting continents and wealth of attractive business set-up options, Dubai serves as an ideal gateway for companies seeking to expand in the Middle East and beyond,” says Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers.
While small and medium-sized enterprises (SMEs) already comprise 95 percent of the emirate’s economy, the government has outlined plans to boost its support of “high-potential” companies and the commercialization of new tech.
“With its world-class infrastructure, strategic location connecting continents and wealth of attractive business set-up options, Dubai serves as an ideal gateway for companies seeking to expand in the Middle East and beyond.” – Mohammad Ali Rashed Lootah
“The city’s business-friendly environment and the government’s commitment to supporting startups through initiatives like Dubai Economic Agenda D33 ensures that new businesses have access to the necessary resources and support to start and scale up,” explains Ammar Al Malik, Executive Vice President of Commercial at TECOM Group.
“D33 will help to strengthen Dubai’s knowledge economy through projects that focus on building a supportive community for entrepreneurs and encouraging collaboration between entrepreneurs, investors and the government.”
The new D33 strategy, which includes 100 transformational projects, is ultimately designed to generate US$27 billion annually, thus strengthening Dubai’s economy and its position as the top third global city.
The emirate stood out in The Economist’s index of prominent global cities for its lenient regulations, economic growth plans and year-round warm weather, placing it ahead of New York, London and Paris.
Connecting Pioneers and Investors
A key player in nurturing techpreneur startups and driving local innovation, Dubai Internet City (part of TECOM Group) also brings startup founders and investors together to encourage collaboration.
“in5 [TECOM Group’s start-up incubator] has a dedicated space to accommodate angel investors, venture capitalists and institutional investors at the heart of the in5 tech center in Dubai Internet City,” Al Malik says.
“The space allows investors to engage startups at in5 for funding and partnership opportunities.”
Dubai Internet City is strategically located within one of the city’s numerous free zones that offer tax and ownership benefits for foreign investors. For startups and SMEs, these zones are also ideal meeting places in which to engage potential clients and business partners.
But that’s not all. Through the Golden Visa and Green Visa, which enable self-sponsorship, the government is actively minimizing the bureaucratic barriers to attract highly skilled individuals, investors and entrepreneurs.
These interventions also increase the appeal for entrepreneurs looking to relocate their business headquarters to Dubai – the government has set a target to attract 300 digital startups within the next two years.
This, coupled with programs dedicated to growing entrepreneurial skill sets, is moving the needle for the emirate from expat-friendly to the global center for digital businesses and innovation.
For Natalia Sycheva, who has been residing in Dubai for a decade, the city is unlike any other in terms of its rapid growth, cosmopolitan atmosphere and tolerance.
The business management executive, entrepreneur and investor says that some of the distinct advantages are the ease of starting a business, the location and transparency of government rules and policies.
“I believe that the whole process, from business idea to testing it in the market and then deciding on registering the business, is just easy and seamless. That has been my experience with my enterprise, and that of thousands of entrepreneurs I have mentored and supported over the past years,” she says.
“Dubai is a small and dynamic city where it is very easy to connect with someone you’d like to learn from, do business with.”
“Dubai is a small and dynamic city where it is very easy to connect with someone you’d like to learn from, do business with.” – Natalia Sycheva
Coming out of the global pandemic and into 2023, Sycheva has observed an increase in the adoption of technologies, which is good news for companies and investors in fintech, ecommerce and logistics. However, there’s one trend that stands out the most.
“The pandemic and global lockdowns have highlighted the importance of food security and food innovation. As a result we have seen the rise of investment in technology related to smart farming” she says.
As the emirate continues to evolve with the times and build on its rich trading history, it’s clear where future-thinkers and pioneers will likely be heading.
A few decades down the track, its ambitious targets could serve as a textbook example on how to reinvent and shift perceptions, as it pertains to a business or an entire nation.
Ten-year Golden Visa
Who is it for?
Entrepreneurs and investors
What are the benefits?
- The freedom to travel in and out of the UAE at your convenience
- Become a tax resident of the UAE
- Open a branch of your existing business or start a new business in Dubai
- Work, reside, travel and invest in the UAE
- Open personal and corporate bank accounts under your business
Five-year Green Visa
Who is it for?
Entrepreneurs, skilled professionals, freelancers and investors.
What are the benefits?
- Long and flexible grace periods for six months after the residence permit has expired
- Obtain residence permits easily for family members
- Eliminates the need of an employer or a UAE national to sponsor for the visa