New government initiatives are trying to spark a growth in the number of business startups in the Emirates.
UAE offers extra incentives to encourage start-ups
The Abu Dhabi Government is offering new incentives that include a discount on land as part of a longstanding drive to encourage business start-ups in the UAE.
ZonesCorp, which oversees specialised economic development zones in the capital, will soon offer new businesses a 25 per cent discount on the cost of land compared with its market price.
The special rate will be given to ventures funded through the Khalifa Fund, which has started to expand its presence to help entrepreneurs in emirates beyond Abu Dhabi, including Ajman, Fujairah and Ras al Khaimah.
"Not everyone is wealthy in the UAE," said Quentin Lowcay, the managing partner of Kensington Swan, a law firm with an office in Abu Dhabi. "People probably assume everyone is a millionaire and if they wanted to do anything, they could, but of course that's not the case. If you want to start a business, looking to employ people and looking to get premises, there are a lot of initial set-up costs."
As part of an agreement signed last week, ZonesCorp said it would also commit at least 50,000 square metres of land in the capital to new companies supported by the Khalifa Fund.
"But this is to begin with," said Samer al Haira, the vice president of marketing and communications for ZonesCorp. The Khalifa Fund "might call us back very soon and ask for bigger land. We have no problem with the size of the land - whatever they need", he said.
ZonesCorp, which gives companies in its zones duty-free import access to machines and raw materials as well as duty-free access to GCC countries, will also be working with the fund on joint seminars to help new businesses to plan and manage their growth.
Sessions are expected to include specialised health, safety and environmental training. The combined effort is part of a broader push to encourage the creation of more small and mid-sized companies.
In Dubai, similar attempts are being made to spur new ventures after a sluggish start to the year. Officials from the Dubai Department of Economic Development (DED) expect the number of new companies setting up in the emirate to fall this year, due in part to a drop in demand for new property-based ventures.
Last year, the number of new businesses grew 18 per cent, while this year that figure is expected to halve to 9 per cent.
One strategy to seed growth has been moving more of the services DED offers to the internet. The red tape that companies have to cut through for a new business application or renewal of an existing licence, for instance, has been sped up by moving both processes online.
Last week, the foreign investment arm of DED, known as Dubai FDI, also held a special seminar on the business start-up process and general investment guidance within the region. It joined efforts with the Links Group, which helps companies to get established in the UAE and is the first private company to have partnered Dubai FDI.
Experts say more still needs to be done to foster growth of new ventures in the region.
"Banks need to move in as well," Mr al Haira said. "Today, for expansion, Khalifa Fund has a max it can allocate. In the future, if [a] factory wants to expand, banks have to wake up and support this as well."