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When it comes to global startup hotspots, few places compare to the UAE. Despite facing stiff competition from other countries including New Zealand, Singapore, Norway and Sweden, the UAE has maintained its edge in the battle to attract the world’s top entrepreneurs.
Even countries billed as the best in the world for entrepreneurs – Germany and Japan – would find it hard to match the dynamism, growth, technology, strategic location and government incentives the UAE offers. Do not believe? Here are five reasons why the UAE is one of the most exciting places in the world to start and grow a business:
1. Economic technology
The UAE is a world-renowned technology hub
While the United States is one of the most technologically advanced countries in the world, the UAE is not far behind, according to research from the Fletcher School at Tufts University in Boston. The UAE not only has a healthy economy, but also has particularly attractive financial options and strong infrastructure, not to mention extensive government support for entrepreneurs. It’s no surprise that the UAE is already home to two unicorn companies, Careem and Souq.com.
Digital Planet 2017 Ranking the United Arab Emirates, Singapore and New Zealand as the most important “outstanding” countries in the world. It describes the three countries as highly digitized and showing strong momentum. “They are leaders in driving innovation, building on existing strengths in efficiency,” the report states. The challenge for these countries is to continuously innovate and generate new demand. The UAE is arguably ahead of its closest competitors in this regard, as it is currently rolling out Massive technological innovation plans, and one that can be easily achieved in such a forward-thinking country.
According to the Global Innovation Index, the UAE has the number one innovation environment in the Arab world. The culture of innovation is reflected in the new research institutions and technology centers established to promote research, creativity and innovation, such as Masdar City in Abu Dhabi and Dubai Science Park.
2. Government support
UAE offers special incentives for new startups
An astonishing 95% of businesses in the UAE are start-ups and SMEs, setting the UAE apart from other start-up hotspots. This reflects the entrepreneurial nature of the economy here and the ready customer base of SMEs and fast-growing technology leaders. One of the key drivers of the UAE’s entrepreneurial economy is the extensive government incentives offered to new businesses. Khalifa Enterprise Development Fund is a non-profit development organization dedicated to helping spread the culture of freelance work, encourage innovation and create small and medium-sized enterprises. Although this is currently targeted at nationals, it shows a strong commitment to developing an entrepreneurial culture. In Dubai, the Department of Economic Development (DED) is implementing a new set of government reforms to stimulate competitiveness and achieve sustainable economic development in Dubai. These include proposals to allocate 20% of government tenders to SMEs and provide additional support for the establishment, development and expansion of new start-ups by attracting world-leading business incubators and accelerators with global resource networks.
3. Global connections
Excellent infrastructure and rapid expansion
One of the UAE’s biggest draws to entrepreneurs and investors is its well-established infrastructure, strong banking system and stable political system. The UAE is uniquely located between East and West, conducive to the development of major emerging economies. It connects shipping routes and facilitates the movement of goods between regions in the Middle East, Asia, Europe and Africa. While Singapore also scores highly for strategic location, New Zealand’s relative isolation is a major disadvantage for startups and SMEs that rely solely on online presence.
4. Safety and lifestyle
The UAE is safe and relatively affordable for expats living here
Since the discovery of oil in the United Arab Emirates (UAE) more than 40 years ago, the country has undergone a profound transformation to become a modern country with high living standards, with Dubai becoming the poster child for a major international business center.
The cost of living in the UAE remains relatively low for expats, with Dubai and Abu Dhabi ranked 26th and 40th respectively in Mercer’s 2018 Cost of Living Survey. Hong Kong is the most expensive city, while Singapore ranks fourth. Auckland ranks 80th in the affordability rankings, but New Zealand’s capital is currently suffering from a severe housing crisis.
The UAE remains an extremely safe and stable place to live, with a sunny climate and a society that values good manners and courtesy. In recent years, there has been a concerted effort to make the UAE a more attractive place to live for foreigners. In fact, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has a vision of making Dubai “the happiest place on earth.”
5. Low corporate taxes
Financial incentives are adequate
Compared to Singapore and New Zealand, the UAE offers an extremely favorable tax environment for most industries, which is a huge benefit for new startups, but it is not the only economic incentive. In the case of Dubai, government fees are frozen for the next three years. Meanwhile, the Department of Economic Development (DED) is implementing a new package of government reforms, including proposals to allocate government tenders to small and medium-sized enterprises, local production and procurement support schemes and incentives to attract the world’s leading business incubators and accelerators.
magic combination
What makes the UAE so attractive to entrepreneurs compared to New Zealand, Singapore and other startup hotspots is not just economic and technological changes, but also a number of interrelated factors, including widespread government support, a safe living environment, Vibrant business culture, strong entrepreneurial community and low taxes. Taken together, these factors certainly make a strong case for locating a new business here.
Related: What your startup can learn from the UAE’s multi-billion dollar frontrunners
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