The business groups and economic consultancies in Dubai have noticed a spike in enquiries from investors willing to expand their operations or set up their business in the emirate following visa and business reforms introduced by the government this year, experts say.
Business consultancies and industry players said Dubai emerged as a leading commercial hub at global stage as the emirate not only aligned its economic policies with best international standards but also offered a lot of incentives to investors and businessmen. They pin high hopes that majority of these double-digit increase in enquiries will be converted into business licences as the investors repose trust in the resilience of the Dubai economy throughout the Covid-19 pandemic.
The Business Registration & Licensing (BRL) sector in the Department of Economy and Tourism (DET) registered 58 per cent year-on-year growth in new business licences to 24,662 in first quarter of 2022 as investors and businesses repose trust in Dubai’s growth potential across various sectors. It also recorded six per cent year-on-year increase in the e-trader licence, another popular business licence among investors, in 2021 as the department facilitated freelancers, entrepreneurs and startups to conduct business activities online and across social networking accounts.
Pratik Rawal, managing partner, Ascent Partners, said the shorter, fixed-term contracts for private-sector employees and other flexible working hours options, including shared jobs, have given employers the flexibility to hire the talent they need.
“Since the new law has been implemented, there has been a significant increase in companies looking to branch in Dubai and register their business with Dubai Economy and Tourism (DET),” Rawal told Khaleej Times.
Fadi Rizkallah, general manager, Freedom2Work.com, said the visa and labour reform have sparked an interest among different nationalities and different categories of people.
“As the UAE and Dubai has been a point of interest for entrepreneurs around the world the news about new visa reform brought many enquiries, the interest is high as well as the demand, people are eager to move here and the new reform has created different opportunities to do so,” Rizkallah told Khaleej Times on Sunday.
HNWIs, entrepreneurs eye Dubai
With the constant rise of high net worth individuals (HNWIs) moving to Dubai, Rawal said there has been a growing need for HNWI families to set up single family or mulitple family offices.
“A few jurisdictions that have given a promising framework for HNWI are DIFC and DWTCA and create holding companies within the UAE-based free zones to manage their wealth and investment in the region. The investment opportunities for single family or mulitple family offices, from real estate to startups in Dubai, show promising prospects for every startup to scale and strategise business expansion plans in UAE,” he said.
Rizkallah said there is a projected growth in the business setup as more HNWI bringing over their businesses as well as different size entrepreneurs as Dubai in the recent years has been one of the major hubs of business in the world.
“An exponential growth is happening at the moment which will place Dubai at the top of business hubs as we have seen recently the shift and the business migration that is happening from many different countries to UAE,” he said.
Elsafty said Dubai has successfully attracted investors, entrepreneurs and businessmen in past and it will continue to do so in future.
“For the longest time, we have seen Dubai and its business environment on a steady rise. The city has given a platform to several businesses that in due time, have taken their operations to an international stage. Looking at how quickly each sector is advancing, and the influx of HNWIs and entrepreneurs – the government will be implementing many new changes that support the growth of the economy, as well as attract more foreign investors,” he said.
Challenges remain ahead
Rawal of Ascent Partners said the UAE has implemented various reforms for people to start their entrepreneurial journey; every startup at the beginning requires a setup that can be cost-effective as possible for them to test their concept and obtain the guidance and support that can enable start-ups to launch their business.
“A free zone that only focuses on starting an incubation centre catering to various industries and segments will bring in more talent and concepts and nurture startups,” he said.
Elsafty said new businesses have many of the same challenges that several companies have experienced previously in terms of setting up and establishing themselves.
“The first is difficulty in finding a reliable local sponsor. Businesses here struggle to find local sponsors who have adequate knowledge about the market, laws, and how these operations are carried out.
“Another challenge new businesses face is the unavailability of funds. Approvals, licences, renting offices and more can often feel heavy on your pocket. A lesser-known fact, however, is that the UAE offers various funds and incubator programmes aimed at giving new businesses a jumpstart,” he said.
Rizkallah said with many new businesses arriving to Dubai, few major challenges are bound to meet the newcomers.
“As first step in the most critical managing the costs of the start; as some business even though they might be well-established elsewhere, might find it hard to properly establish themselves at the same size. It is best sometimes to start small by sending trust worthy representation on a smaller scale to properly study the market establish the connections and lay the foundation of the company before the big move,” he said.
Business opening; companies should be very careful with the rules and regulations as well as the people that are looking to make a quick buck of newcomers, seeking the help of trust worthy business setup advisory might help them get on the right path in order to avoid any wrong steps and properly invest in their business, he said.
“Another major challenge is to be known in the market and perform well. While people are coming from different areas of the globe with different mentalities it is very crucial and important to understand the aspects of the business and how it is conducted in Dubai. Even though there is plenty of multiculturalism Dubai has its own views and own business mind which must be respected and followed in order to achieve the success wanted,” Rizkallah said.