Choosing where to base your business is one of the most important decisions entrepreneurs have to make. You need access to a growing market, great trade connections, and an environment that is supportive of new companies.
In the UAE, a growing number of new businesses are being founded by entrepreneurs from the CIS region (Commonwealth of Independent States). Russia is the largest of these, but business people from all nine CIS member states are attracted by the UAE’s high-quality infrastructure and can-do approach.
These new businesses are following in the footsteps of entrepreneurs across the globe. So let’s look at five reasons why the UAE is so attractive to new business ventures.
1. Good economic outlook
Every business owner knows the importance of the wider economy when it comes to the successful launch and expansion of a business. But right now, many economies across the world are struggling.
For example, according to economic analysts FocusEconomics, Russia’s economy is set to grow by 1.1% in 2019, rising to 1.8% by 2020. This is similar to the economy of the Eurozone which is expected to grow by 1.1% in 2019.
By contrast, the UAE’s economy is expected to grow at a healthy 3.2% by 2021, which means that companies launching here can expect a prosperous future.
2. Fewer barriers to business
Entrepreneurs often complain about the difficulty of launching a business. Obstacles range from regulations and compliance to high costs and lack of up-to-date technology. While many fantastic businesses do emerge from all corners of the globe, and there is a wealth of skilled talent, these barriers can be disheartening.
The UAE actively seeks to streamline the set-up process for new businesses. It is currently ranked as the world’s 11th easiest country to do business in, and the second best for its tax regime.
Entrepreneurs can confidently start a business in the UAE knowing that they will avoid expensive fees for licenses. A company can be registered in a matter of days rather than weeks, and the technology and infrastructure are all in place – not to mention that other vitally important detail, a consistent electricity supply.
3. Favourable taxation
When launching a business, the sums have to add up. One of the biggest challenges for entrepreneurs is meeting the various costs – and taxes come high on the list of financial concerns.
Relatively high taxes can make it difficult for a new business to get off the ground. Unless you have very wealthy backers, it can be a real stretch setting aside the money needed to invest in your company and grow.
In the UAE the government’s attitude is very pro-business in this respect. For startups working in free zones, taxation is set at 0% for businesses and individuals. That means you retain all your profit and can really invest in the growth of your business.
4. Minimal governance difficulties
A common complaint among entrepreneurs is the wider issue of governance. Business people often face challenges that make it more difficult to grow their new company.
For example, when infrastructure development is limited it can cause problems, impacting the speed and efficiency of exporting. Many countries have high levels of bureaucracy too, and corruption is sometimes another obstacle. While these kinds of governance issues remain unresolved, companies find it hard to achieve their potential.
The governance framework for UAE businesses is relatively straightforward, with bureaucracy limited. The rule of law is well respected in the UAE, and businesses enjoy some of the world’s best infrastructure.
The region actively pursues anti-bribery and anti-corruption policies too. The UAE currently comes in 23rd place in Transparency International’s Corruption Perception Index.
5. High levels of entrepreneurship
A wider entrepreneurial culture such as the one the UAE offers, can be invaluable for a small business as it starts to grow. Being surrounded by likeminded companies that can provide advice, tips and support is incredibly useful.
Just under 11% of the UAE population runs their own early-stage or small business, while another 2.5% of the population runs an established company. This means that new startups have access to better resources and information, and there are also more opportunities for selling to other companies.
Where entrepreneurship is seen to be successful, other ambitious business people are drawn to that region. So it is no surprise that the UAE has become such a magnet for entrepreneurs from the CIS and many other parts of the world.
A home for entrepreneurs
The growing economy, and a range of business-friendly government initiatives, has put the UAE on the international entrepreneur’s radar like never before. The final piece of the puzzle for new businesses is where exactly the company should be based.
When choosing somewhere such as Umm Al Quwain as a location for a free zone setup, new entrepreneurs receive all the services and solutions needed to grow their business fast. With a favourable combination of geography, infrastructure and a startup-friendly culture, it’s the ideal place to launch your business.