UAE Government Is Boosting Startups & SMEsAuthor businessconsultantsdubai
Strategic graphical location, strong monetary reserves, vast sovereign wealth fund, continuous government spending for investment promotion and support, progressive policy of economic diversification, free zones and increased FDI contribute to UAE’s enormous and robust economy.
All of the success has been achieved because of the visionary leadership and continual support of government to find ways to boost the economy, bring in FDI and encourage global companies for business setup in UAE.
Another proof of this proactivity is the large amount of new initiatives introduced by the government for ease of doing business and fostering growth. Here we have pulled together some of the latest and most exciting business friendly initiatives and have summarized how they can help you in your business activities.
1. Relaxation on Foreign Ownership Restriction
On 20 May 2018, the UAE Council passed a resolution allowing 100% ownership of mainland companies in the UAE and instructed the relevant authorities to implement the resolution by the end of 2018. The game changing move reinforces the country’s commitment to becoming the primary destination for international investment, innovation and entrepreneurship around the globe.
The relaxation on foreign ownership restrictions, once implemented will lead to increased company formation in UAE mainland and restructuring of many existing investment structures.
2. Long Term Residency Permit to Foreign Investors
UAE government has also announced to provide 10-year visas to certain sections of the expatriate population. The move is beneficial for start-ups and multinationals alike as it will surely provide them with confidence in their long-term prospects in the UAE, which in turn should encourage them to setup and expand their business in UAE.
3. Freeze on Government Fees
Another move to facilitate SMEs was the decision to freeze government fees (such as business licensing and real estate approvals) for next 3 years. The decision was met with much praise and relied as it came at a time when SMEs are struggling to secure funds for working capital and business expansion with banks also employing tight lending standards.
Settling the pending payments will increase the liquidity of SMEs and also help to offset the impact of VAT-induced slowdown while strengthening investor confidence to pick-up in foreign direct investments.
4. FDI e-platform
A new digital platform has been launched in April 2018 to facilitate the flow of FDI in UAE. The UAE ranks first among recipients of FDI in Arab countries and 12th top recipient worldwide, according to the World Investment Report 2017.
In order to continue its lead, government has introduced this easy to use and navigate web portal; it will help record the flow of FDI and promote investment opportunities in UAE among foreign investors.
5. SME e-platform
A new electronic platform to help serve the country’s National Programme for SMEs and projects has also been launched in order to boost UAE’s reputation as an investment destination and help promote a culture of research, creativity and competitiveness.
This means by getting registered into the National Programme for SMEs and projects will let members to tap new markets; reach out to prospective partners from federal, local government institutes and the private sector and develop marketing opportunities for their products.
6. Government Procurement Programme
This programme supports SMEs, promotes national entrepreneurship and contributes to Dubai’s Gross Domestic Product (GDP). According to Dubai Media Office, the total value of the contracts provided by Dubai SME (government body responsible for supporting and promoting Emirati-owned SMEs) under this programme increased from AED 857.76 million in 2016 to AED 1.5 billion during 2017.
Apart from Dubai SME, Dubai Municipality developed more than 30 initiatives to support SMEs, including assisting entrepreneurs to establish shops at less cost by allocating specific units to them, and by focusing on SMEs in projects such as Dubai Safari, Hatta Development Projects and the Marmoom Desert Conservation Reserve. In total, the municipality awarded SMEs contracts valued AED 482 million in 2017.