With the new raft of government incentives, 2019 will be the year that places the UAE as the number one location for start-ups globally.
The economy is predicted to grow, Dubai Expo 2020 is fast approaching, and exciting opportunities are being created for entrepreneurs of different ages, genders and backgrounds. The multitude of startup-friendly initiatives include incentives for female business owners and young entrepreneurs, extended five-year visas for older professionals, 100 per cent foreign ownership of companies, and 10-year visas for some business owners and property owners.
So here are six key reasons why entrepreneurs are considering the UAE as the number one spot to launch their 2019 startup.
1. Growing economy
The UAE is already one of the world’s leading startup hotspots. As more businesses flood in, attracted by generous incentives to start and grow, the economy and startup market will strengthen further.
In October, the International Monetary Fund lifted its forecasts for economic growth in the UAE to 2.9 per cent in 2018 and 3.7 per cent in 2019, significantly higher than its April forecast of 2 per cent and 3 per cent respectively. The strengthening economy is down to several factors, one being an increase in oil output and rebounding oil prices, which have given the government more money to spend, a budget stimulus of $55bn, but most of all, the cyclical effect as the UAE comes to the end of its recent slowdown, stabilises and then starts to pick up again.
The UAE cabinet has approved a zero-deficit federal budget of Dhs180bn for 2019 to 2021. Meanwhile, next year’s budget has been approved at Dhs60.3bn – much of which is to be allocated to sectors with a focus on citizens’ wellbeing, health and education.
A stronger economy will especially help entrepreneurs to grow their business fast and attract talent.
2. New visas for older expats
A new law, due to come into force in 2019, will allow foreigners to obtain extended residency visas in the UAE after they retire. This represents a major incentive for older entrepreneurs and seasoned professionals to remain in the UAE and is expected to attract people approaching retirement age to set up companies in the UAE. The new five-year visa will be particularly attractive to those who call Dubai or Abu Dhabi home.
The extended residency visa is good news for entrepreneurs, as it will encourage seasoned professionals to continue to call the UAE their home, long after they would have previously moved to retire elsewhere. This will help to nurture long-term growth, providing a broader and more stable economic platform for startups.
3. Exciting opportunities with Dubai Expo 2020
As Dubai Expo 2020 approaches, there will be an increased demand for companies providing ancillary services for the event. The Expo is expected to attract 25 million visits, bringing a significant demand for local entrepreneurs. Among the startups set to benefit are events companies, hospitality businesses and firms offering services and supplies for the exhibition.
With less than two years to go, purse strings have been loosened and tenders awarded, and this flow of funds will act as an immediate stimulus in 2019 to the economy with funds flowing to all sectors and all industries.
Expo 2020 will provide a ready-made market for a wide array of small and mid-sized businesses specialising in the specific requirements of servicing the influx of visitors. Many businesses will benefit solely from the increased footfall.
4. Green light for 100% foreign ownership
Earlier this year, the UAE government announced its decision to allow 100 per cent foreign ownership of companies in the UAE. This comes as part of a new visa system for international ‘investors and talents’, which includes a long-term 10-year visa for certain categories of professionals, business owners and property owners.
The country has plans to allow for 100 per cent business ownership for most enterprises. This incentive was previously only applicable to companies operating in the free zones – other companies were required to have an Emirati sponsor with a minimum 51 per cent ownership.
This new 100 per cent ownership rule and 10-year visas will result in better planning by business owners and a greater emphasis on the training and up-skilling of top talent, thus making it easier to attract the top talent to the region and make the UAE competitive on a global scale. The global investors’ ownership is expected to reach 100 per cent by the end of the year.
5. Opportunities for female entrepreneurs
Women make up 70 per cent of the region’s university graduates and 44 per cent of the workforce, and there has been a surge in female entrepreneur support groups, advisories and workshops.
The Dubai-based, Women’s Investment Network, is just one which has been set up to help female entrepreneurs and other women with financial management. With more women investors and a more inclusive, diverse and consequently booming ecosystem, there has never been a better time for a woman to open a business in the UAE.
6. Influx of young talent
The new visa system and a raft of incentives for young entrepreneurs look set to attract a new generation of business leaders to the Emirates, as well as boosting the local labour market with new talent.
New five or 10-year student visas are also being introduced to enable students to stay and find work in the UAE once they have graduated.
Other initiatives include Expo 2020’s Youth Connect scheme which aims to encourage young people to become ‘the innovators and thought leaders of tomorrow’. Meanwhile, the government’s UAE Youth programme targeting 21 to 30-year-olds is designed to help innovative young people gain a rounded education in business.
With the UAE economy predicted to grow significantly and with a wealth of initiatives aimed at attracting entrepreneurs and helping startups grow, 2019 looks set to be an ideal time to launch a business here in the Emirates.
Michael Burke is managing partner of EER Corporate Services