HOW THE UAE HAS BECOME a top
BY TONY PALLADINO
In the interconnected world of ours, creating a business start-up is a brave decision entailing both opportunities and challenges. No wonder businesses look for destinations where there are maximum opportunities and minimum risks. In a world where almost every second country is laying the proverbial red carpet for businesses and is looking to attract investments, the United Arab Emirates (UAE) stands as a beacon. In terms of dynamism, infrastructure, government incentives, growth opportunities, strategic location, and the availability of a skilled workforce, very few can compete with the UAE. In fact, it won’t be an out-of-line comment to state that the UAE is arguably the most favoured global destination for the start-up ecosystem to prosper.
Global businesses are increasingly looking at the UAE, especially Dubai, to set-up startups and enjoy a smooth run and profitability.
Citizenship offer for select foreigners: According to an amendment to the Citizenship Act, the UAE shall allow select foreigners to obtain naturalisation or citizenship. These include investors, specialized talents and intellectuals, and professionals such as doctors, scientists, artists, engineers, authors, and their families. This offer is touted to be the biggest incentive for startups to set up businesses in the UAE, especially in sectors like real estate, fintech, hospitality, education, technology, healthcare, and others. Thanks to the citizenship offer, select foreigners can get the much-coveted UAE passport and enjoy benefits such as a high standard of living backed by an excellent welfare system.
A growing economy: Since the last two decades, the UAE has emerged as one of the most technologically advanced countries in the world. Economic prosperity in the UAE is due to a slew of factors such as the rebounding oil prices, an increase in the oil output, budgetary stimulus by the government, and the infusion of global business capital, among others. Notwithstanding the COVID crisis, the growth rate is expected to touch 6.3% in 2020. Thus, a growing economy, a robust infrastructure, easy residency and citizenship offer, attractive finance options, and government support act as a magnet for the global startups to head to the UAE. The country is home to three unicorns, namely, Souq.com, the Emerging Markets Property Group (EMPG), and Careem.
Its state-of-the-art start-up ecosystem is expected to drive talent and investment in areas such as ecommerce, food & beverage, fintech, real estate, logistics and transport, and healthcare, among others. Importantly, the government’s support, guidance, connections, funding, and mentoring have created a well-oiled start-up ecosystem consisting of accelerators, incubators, and financiers. The country has hosted a few accelerators such as Startup Bootcamp, Techstars, and Plug N Play, contributing to the worldwide sentiment of it being a leading innovation hub and a business friendly destination.
Free zones: The UAE has several free zones where startups are incentivized with sops like fast track procedures for company setup, reduced cost of operations, 100% retention of equity, exemption from corporate income tax, and tax holidays for employees ranging from 15 to 50 years. Moreover, the presence of several accelerators helps the setting up of start-ups by funding the latter in exchange for equity. The accelerators even link start-ups with government institutions. To cite an example, in Abu-Dhabi, a tech incubator called Hub 71 worth 1 billion dirhams ($272 million) has been set up in a free zone to accelerate the growth of technology like AI in the region. Thus, the accelerators and incubators offer start-ups the support, tools, guidance, and expertise to establish themselves and march ahead in the competitive global business landscape.
STARTUPS
14 | BIZPRENEUR MIDDLE EAST March 2021
DESTINATION FOR GLOBAL START UPS
BY VARIS SYED