The Role of SMEs in the UAE
Small and medium-sized enterprises (SMEs) form the foundation of the global economy, contributing a significant share to both employment and GDP worldwide. Figures suggest that these types of businesses make up approximately 90 per cent of all entities out there and furnish half of all jobs. Last year’s estimations revealed that smaller firms are attributable for 70 per cent each in terms of job creation as well as entire GDP production – it is thus clear why we refer to them routinely as “the backbone” when discussing economic matters on an international scale.
Investigating the United Arab Emirates further, one will find a pattern that is consistent with its status as an international financial leader. Approximately 350,000 small and medium-sized enterprises (SMEs) occupy 94% of businesses in UAE while providing 86% of private sector jobs and contributing over 60% to the gross domestic product (GDP). This can be attributed to entrepreneurship combined with effective governmental support.
For each international success such as Netflix, Uber and Airbnb there are similar accomplishments in the region like Kitopi, Washmen and Careem. These organizations have shown great courage, vision, leadership and determination but their sustainability depends on many factors including local regulations and access to financial support. The pandemic has destabilized even successful businesses with inflation pressures, supply chain issues or lack of talent all requiring strategies that will help ensure lasting growth under current circumstances.
The Role of Government in Business Development
The UAE government has put forth a strategy which combines the ability to “step back and let business owners do their thing” with getting involved in order to promote economic growth. They are determined to create an economy that no longer relies on oil, but focuses instead on knowledge-based industries, understanding that small businesses will be at the heart of making this plan a reality. To help entrepreneurs get off the ground or expand operations here, there have been several initiatives launched by The Ministry of Economy such as Entrepreneurial Nation which provides resources for anyone looking into either launching or growing companies in the United Arab Emirates.
The Government of the UAE has made it easier for businesses to operate in the country by providing a corporate tax rate of 9%. Entities based in free zones as well as certain other conditions may be exempt from import or export duties. There is also 100% repatriation offered on both revenues and profits, plus reductions that can go up to 50 per cent on over 1, 500 government fees. Abu Dhabi Global Market provides support with risk management using English Common Law, while its eCourt Platform offers an efficient judicial dispute resolution solution that’s cost-effective and saves time for litigants and attorneys.
The UAE is tackling the global lack of expertise by introducing golden and remote-work visas to attract professionals. As a result, Abu Dhabi has become home to an expansive collection of highly qualified people ranging from engineers, scientists, and technologists whom startups need for success; supplemented by initiatives such as the National Programme for Coders in addition to higher education centres like Masdar Institute Khalifa University and New York University Abu Dhabi providing more talent into this area. Top-notch infrastructure, high internet adoption rates, a strong banking system and digital government services all help to make business operations run smoothly. In addition, the lively culture combined with excellent healthcare facilities and renowned safety makes this an attractive place for entrepreneurs to live and raise their families.
Certainly, the advantages of founding a business in the UAE come with an associated price. It is important for companies aiming to set up shop in this country to understand that there is typically a high cost of living. For such startups to remain sustainable, they must exercise fiscal caution and secure ample financing so their venture will prosper within the region. In addition, because of its excellent healthcare services and renowned security standards throughout major cities across UAE – it’s no surprise why many entrepreneurs consider it favourable destination in which to live and start families .
The Challenges and Opportunities of Startups in the UAE’s Competitive Landscape
The government has put in place the Abu Dhabi Seed Programme to provide mentoring, funding and networking opportunities for SMEs. As a result of this initiative and an abundance of angel investors and venture capitals specialised for technology, the capital city is becoming exceedingly competitive; only those who are able to sustain their effortlessness can succeed. Therefore entrepreneurs must stay motivated at all times lest they become complacent leading them astray from success.
Exploring different markets is a key element of increasing revenue while minimizing risk and ensuring financial stability. DocVita, an Indian healthtech corporation with an AI assistant for medical professionals, recently became aware of the potential that Abu Dhabi offers when it comes to achieving this goal. With assistance from Flat6Labs through the Abu Dhabi Seed Programme, they gained access to legislation and infrastructure designed by the government in order to support budding entrepreneurs in their endeavors. Furthermore, they discovered that customers had high purchasing power which makes doing business even more profitable in this region.
May 16, 2023