Dubai's plan for a new "hassle-free" trade licence for most companies is another big step forward in the battle against the paperwork burden. Questions remain, but this change will be welcomed by many.
Another win for investors in Dubai
As a hub for international business, Dubai is already a global leader. But there are still challenges to setting up shop in the commerce-oriented emirate. Plans by the Dubai Department of Economic Development to begin issuing 120-day "hassle-free" trade licences will, we hope, reduce some of those start-up hurdles.
As the situation stands now, new entrepreneurs must obtain preliminary approval, then begin applying for necessary documents from municipal, legal and economic development authorities before they can open their doors. This process can take weeks or months, depending on the business. It is costly in time and potentially crippling in lost economic potential.
But as The National reports today, these hurdles could soon be hassles of the past. Owners of so-called "no-risk" and "low-risk" enterprises (a translation service, for instance), will be able to obtain a licence on the same day they apply for one and could start operating right away.
Not that this move will be a rubber-stamp. Companies that fall in the "high-risk" category (defined as businesses that could be harmful to human beings, animals, plants or the environment - medical clinics, for instance) will have a more stringent approval process. But these endeavours account for only about 10 per cent of start-ups in Dubai. It is wise, therefore, to give lower-risk firms an easier time setting up.
Many will benefit from such a step, including those already inside the country who want to start up businesses of their own. We hope that other emirates follow suit. In Abu Dhabi, for example, procedures take longer and there are additional requirements and standards for sponsorship.
Several issues require more clarity, such as what the hassle-free licences might mean in terms of visa eligibility, and how much they will cost. Answers on these points will be important in determining how successful this move will be in encouraging new entrepreneurship.
But the step is still important because it is one of a series of reforms taken by authorities in recent years to remove red tape facing investors. As Dubai and the UAE mature economically, keeping an eye on ways to increase competitiveness will be key to the country's success.