What Makes UAE A Global Business Magnet?

• Business
• Mar 22, 2023

What is driving the global entrepreneurial phenomenon in the UAE, and what are the key factors strengthening UAE’s appeal as a global commercial hub?

Interestingly, UAE outperformed the Netherlands and Finland in the Global Entrepreneurship Monitoring Report 2022 cementing its startup ecosystem reputation and commercial hub positioning. According to data platform Magnitt, the MENA region reported a whopping US$ 2.6 billion in VC funding in 2021, out of which 45% of all funding was raised by startups. These developments in turn spur investor confidence, with the latest reports recording that companies in the UAE raised $699 million in the first half of 2022.

There is a growing trend of businesses migrating from other countries to reap these commercial benefits: Dubai Chambers reported adding 28,000 new companies in 2021, registering an increase of 66.8% as compared to 2020.

Here are some of the factors that contribute to the attractiveness and reliability of the UAE in general and Dubai in particular as a global business hub:

• Strategic geographical location: Dubai is favorably positioned geographically at the juncture of new and existing trade routes, standing as a gateway to emerging markets across the MENA region. Being a tourism hotspot, Dubai has a well-developed logistical network of sea, road, and rail (in the pipeline) transportation. The World Bank Logistics Performance Index places the UAE 5th in the world for international shipments and 4th in timelines. This is especially attractive to businesses looking to expand operations across the region as a well-connected business hub draws both talent and capital from across the globe. Dubai’s popularity and ease of access have led it to emerge as a destination of choice for conferences and other such networking events for local and regional businesses to establish business linkages and scale up.

• Favourable Government Policies: The UAE is politically stable with a strong economy and a government vision focussing on progressive diversification strategies by opening tourism, manufacturing, real estate, and technology sectors. Initiatives like the formation of free zones and globally competitive tax regimes are attracting global leaders to set shop and hire talent. 100% foreign ownership and ease of business set up in hubs like Ras Al Khaimah has streamlined set-up procedures and adding to the reputation of UAE has a dynamic commercial ecosystem. Complete ownership eligibility has also been expanded to businesses in renewable energy, space, and agriculture.

Initiatives such as Operation 300bn, the Dubai Creative Economy, the UAE Net Zero Strategy, as well as tech-focused strategies in artificial intelligence, cybersecurity, and, most recently, the metaverse, are further fuelling UAE’s growth in emerging sectors.

• Conducive Environment & Incentives: Platforms like in5 which offer an integrated innovative platform for entrepreneurs and startups to be incubated and nurtured in their next phase of growth, along with strategies in the metaverse, healthcare, and sustainability are creating new opportunities, incentives, and promoting entrepreneurship. Policies like golden visas, and remote work continue to attract talent, businesses, and investment in Dubai.

• Ease of doing business & robust infrastructure: UAE offers sophisticated infrastructure, high rate of internet penetration, e-government services and a strong banking system is further feeding into the already thriving business hub. A high quality of life together with a smooth and seamless entrepreneurial climate attracts skilled talent who have access to mentorship and state-of-the-art creative facilities.

There are several success stories in the region like Dubai based startup Careem (the region’s first unicorn in2019 after being acquired by Uber), Souq.com, Desert Control (an Agri-tech startup listed on the Oslo Stock Exchange) which all chronicle the vibrant startup ecosystem.

All the above-mentioned factors coupled with the deft handling of the COVID-19 pandemic has ensured global confidence in the nation’s systems and governance. Further, the recent success of Dubai Expo 2020 has elevated the soft power status of the UAE. Recent measures like aligning the work week with the world standard (Mon-Fri) has added to the ‘ease of doing business’ status of the region. Ambitious programmes like ‘Projects of the 50’ to mark UAE’s 50^th National Day aim to double the size of the economy in the next 10 years by focussing on technology and innovation.

Conclusively, it would be safe to say that the UAE is well equipped to lead the global economy in all the GCC and MENA region and is at the forefront of an entrepreneurial evolution.

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