New Business Potential for British Entrepreneurs in the UAE

Entrepreneurship is flourishing in the UAE. Despite the cultural barriers, many entrepreneurs from abroad are taking advantage of the business opportunities presented by the large, relatively untapped market in the UAE. A success story is Paragon Laundry, a family-run UK-based laundry business. It has set up operations in Dubai, Abu Dhabi, Saudi Arabia and Bahrain. Their managing directors foresee that these Middle East operations will overtake their parent operation in profit in the next three years. There is also a growing number of business-savvy residents who chose to leave the safety of full-time salaried jobs to launch their own businesses. Many of the success stories are encouraged by these factors:

The UAE government is very supportive of small and medium-sized enterprises (SMEs). Dubai SME was formed in 2002 by the Dubai Department of Economic Development (DED) to promote entrepreneurship as a way to diversify the economy into new sectors and as an alternative career choice. Dubai SME is continuing its effort to identify, nurture and promote entrepreneurship by working in partnership with various stakeholders such as government officials, business leaders, financial institutions and educational institutions. One financial institution that has been supportive of the international expansion of SMEs in the UAE is HSBC Middle East. In a Memorandum of Understanding (MoU) signed between the UAE Ministry of Economy and HSBC in 2010, a USD 100m fund was launched for UAE SMEs that engage in cross-border business. HSBC committed a third tranche of Dhs 1 billion to UAE SMEs in 2012 and another Dhs 1 billion in 2013.

There are many domestic and international banks in the UAE, including National Bank of Abu Dhabi and HSBC Bank Middle East that offer a range of products and services to help entrepreneurs manage their business finance. An example is a business credit card whereby owners of SMEs get a primary card and can apply supplementary cards to extend the same benefits to their employees. By assigning limits for each card, the owners can manage and control the official expenses.

The climate for doing business in Dubai, the UAE, Oman and Saudi Arabia is stable, as Mr Michael Oliver, the founder of Oliver’s Valves told The Telegraph. The Middle East is one of the 35-year-old British manufacturing company’s largest export markets and contracts there will make up a quarter of the business.

The rapid increase in internet access and improvement in online security further facilitates the UAE as a hub for entrepreneurship. This massive online growth has created many business opportunities. Nielson’s latest Internet Usage and World Population Statistics indicated that compared with 393 per cent in Europe, internet usage across the Middle East increased by 2,639 per cent over the past decade. The internet has created a level playing field by reducing the cost of setting up, marketing and reaching out to clients.

Another attractive factor is the ease of starting a business. According to the World Bank’s Doing Business 2010, it takes only 15 days to set up a new business in the UAE. The UAE government has granted many incentives to attract foreign investors, including corporate tax holidays for the majority of sectors, exemption of personal taxes, no currency restrictions and freedom to repatriate capital and profits. Entrepreneurs from abroad can choose to set up operations as a branch, representative office or registered company in one of the Free Zones in one or more of the Emirates. Free Zones such as Masdar City and Fujairah Free Zone enable companies to operate in a business-friendly and entrepreneurial environment. Some benefits of operating in the Free Zones include 100 per cent foreign ownership, no currency restriction, zero per cent import tariffs, zero per cent taxes on companies and individuals, no restrictions on capital movements, profits or quotas, and the hiring of expatriate staff.

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