x Abu Dhabi, UAEMonday 24 July 2017

New business start-ups double in Abu Dhabi

The abolition of a Dh150,000 start-up capital law has seen a doubling of company registrations.

Since the announcement in August of the scrapping of the minimum capital requirement, more than twice the number of new businesses have been registered in Abu Dhabi.
Since the announcement in August of the scrapping of the minimum capital requirement, more than twice the number of new businesses have been registered in Abu Dhabi.

The abolition of a law requiring businesses to have at least Dh150,000 (US$40,000) start-up capital has resulted in a doubling of company registrations, according to new data. Since the announcement in August of the scrapping of the minimum capital requirement, more than twice the number of new businesses have been registered in Abu Dhabi compared to the same period last year, according to figures from the Abu Dhabi Chamber of Commerce and Industry. A total of 2,063 new firms have opened, compared to the 974 that started in the same period in 2008. Previously, entrepreneurs would only be granted business licences if they had a bank balance of at least Dh150,000 (US$41,000). This was designed to ensure that the company had sufficient assets to get off the ground. This was changed as part of an effort to streamline the registration process and boost the number of small and medium-sized businesses. Mohammed al Hameli, the director general of the Abu Dhabi Chamber of Commerce, said the decision had helped make the capital a more attractive place to do business. "The decision to change the law has made it easier for small companies to start," he said. "People can now start companies with Dh10,000 to Dh1 million." @Body-Title:Mr Hameli said around 85 per cent of businesses in Abu Dhabi are small and medium enterprises, which were one of the driving forces of the city's economy. "Before, the system of registering a company was slow. Now it is much easier." He said there were several systems for categorising businesses by size, but broadly speaking, a small businesses was one which had a revenue of less than Dh1 million per annum and a medium-sized business had a turnover of between Dh1 million-5 million per annum. The UAE was ranked the 23rd most competitive place to do business, according to the Global Competitiveness Index for 2009-2010; up eight places from last year. Elias Sayah, the vice chairman of AmCham, an American business group, said that he had seen a large increase in inquiries from people looking to open new firms, and said that this was partly due to the fact Abu Dhabi had escaped the worst consequences of the credit crunch. "I think the economic atmosphere in Abu Dhabi is really helping to draw new business here," he said. "The city is growing. It has not been hit hard by the credit crunch like other cities. People think it is a good place to do business," Mr Sayah said. "I have seen a large increase in the number of approaches from people looking to start new companies. Around 30 per cent." He added that he had received most requests from people working in the retail and engineering sectors. chamilton@thenational.ae