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March 2022 - News

Life after EXPO - Dubai’s exciting economic prospects

EXPO 2020 is drawing to a close, and there’s much talk about how Dubai and the UAE economy will fare after the magnificent six-month-long exposition ends.

So, this is a perfect moment to review the last few months, and examine the future trends. Our research has revealed an exciting future for Dubai this year, despite global economic pressures, ongoing pandemic issues and supply chain glitches. One of the most promising economic performance measures is business growth in Dubai: we can look at the number of new business licences issued.

Data from the Business Registration and Licensing (BRL) sector at the Department of Economy and Tourism (DET) released in January shows a staggering 72,152 new business licences were issued in 2021. Despite the pandemic, this marks a growth of some 69% compared to 2020, when 42,729 licenses were issued. And in 2019, pre-pandemic, just 38,377 new business licences were issued.

The BRL says 59% of the new business licences issued in 2021 were professional, while 41% were commercial.

Underlining the encouragement offered for entrepreneurs from state level down, the biggest majority of new licences were ‘Sole Establishment’ companies (37%), followed by Limited Liability companies (26%) and Civil Companies (13%).Another boosting factor in Dubai’s dramatic growth in company formations is the relatively new ‘instant licence’. The so-called ‘instant licence’ was taken up by some 15,196 companies in 2021 – a phenomenal 427% growth year-on-year. (In 2020, just 2,884 instant licences were issued.) While it’s not ideal for every type of business, a solopreneur looking to launch a side hustle couldn’t possibly set up a business faster.

Instant licences are issued online electronically, online or in person, including a digital Memorandum of Understanding and a virtual company site for one year. After the first year of business, you need to register your trade name and provide a rent contract.

No better place to be an entrepreneur

Another measure of economic success and prowess is how open the economy is to entrepreneurs and how easily the government and business community make it for entrepreneurs to operate in-country.

While several steps have been taken to ease and encourage business set up globally, the UAE is now recognised as the best place to start a new business, according to the latest Global Entrepreneurship Index.

The data suggests the UAE beats 47 major global economies, including the UK, US, Japan, Canada and South Korea. It scored highest across all of the 13 ‘framework conditions’ identified by the survey company, Global Entrepreneurship Monitor.

The UAE celebrated its golden jubilee on the 2nd December 2021 and launching the results at Expo2020, UAE Minister of Economy Abdullah bin Touq Al Marri told media: “The UAE is entering the next 50 (the UAE celebrated its Golden Jubilee in 2021) with the accomplishment of this achievement, by being at the forefront of global economies through the development of an exemplary entrepreneurship system and a highly enabling environment for companies. Today, the country serves as an ideal incubator for entrepreneurs and attracts leading projects, especially those operating in new economic sectors, innovation and emerging technologies.”

This significant recognition underlines Dubai and the wider UAE’s efforts to create an entrepreneur-friendly economy. There’s a raft of programmes and initiatives to help start-up SMEs thrive, and this strategy is paying off, increasing the UAE’s non-oil GDP and bolstering the transition towards technology, innovation and a knowledge economy.

In fact, as of mid-2020, there were some 350,000 Small and Medium Enterprises in the UAE, representing more than 94 per cent of all companies operating in the country.

Turning Expo into a new city-within-a-city

The sprawling Expo 2020 Dubai site is not being abandoned, of course. It is being re-modelled into District 2020, a new, people-first community fostering fantastic opportunities for business set-up and lifestyle.

While the reconstruction of the site takes place this year, the major attractions will remain open to the public, but what will emerge is expected to be a new benchmark in creating an innovation ecosystem and an integrated community lifestyle.

Most notable from an entrepreneurial perspective is the Scale2Dubai initiative, a programme encouraging businesses to locate (or re-locate) in District2020 with a raft of benefits. These include free workspace for two years, a two-year visa, and business set-up and licensing support.

What’s more, in a move surely destined to help Dubai and the UAE retain its title as the world’s best place to start a business, District 2020 offers another competitive free zone environment.

There’s zero per cent corporate and personal tax (excluding VAT), one hundred per cent foreign ownership, dual licensing, and repatriation of capital.What’s most exciting about the Scale2Dubai programme is that it aims to attract leading minds and technologically advanced companies. It is hoped District 2020 becomes an innovation hub, centering on smart cities, smart logistics, smart mobility and Industry 4.0.

There’s a strong focus on attracting those involved in Artificial Intelligence (AI), big data, 3D printing, robotics and the Internet of things (IoT).Expo 2020 brought a world of innovation to our shores. What’s next will push the envelope, pushing a new industrial technology category to the fore in an environment designed to maximise work and lifestyle opportunities.

With such a wide variety of business opportunities and set-up variants available in Dubai, it’s good to have an experienced, trusted partner on board to help you navigate the best process for your circumstances. Swiss Group is standing by, ready to answer your questions, reveal the best course of action and ensure your business fulfils all the necessary legal, financial and regulatory requirements.