UK aims to win over SMEs based in Arabian Gulf
The UK government is looking to attract small businesses from the UAE and Arabian Gulf to start operations in Britain, increasing investment flows.
Retail and e-commerce are the focus areas in the new push for Gulf SMEs as part of the Great Business Award competition.
Next month, UK Trade and Investment (UKTI) will announce a winner for the Gulf-wide competition that was launched in January. The last date for application is March 31. Small businesses with a two-year track record and registered in the Gulf are eligible. The winner will be given access to free legal and tax consultations and mentorship opportunities besides free flight and accommodation to the UK for the award ceremony.
In a break from trying to attract large corporates to invest in the country, the effort to attract SMEs has been paying off. The UAE-based Toy Store, which has outlets in Bahrain, Oman and Qatar besides Dubai and Abu Dhabi, expects to open a 27,000 square feet store on London’s Oxford Street in the second half of the year. Sanipex, a Dubai-based manufacturer of sanitaryware, is also looking to expand in the UK.
“We are looking for indigenous companies that have grown up here and have the prospects to grow out of the Gulf into new markets in Europe and the UK is the gateway,” said Edward Hobart, the UK consul general in Dubai.
Given the large Middle East population in the UK, there is a potential, for instance, of halal products distribution, such as food and cosmetics, he said.
Despite the rise of anti-immigrant populism in the UK, and two recent attacks on Emirati tourists in London, the UK consul general says these will not affect Britain’s attractiveness to entrepreneurs.
“Eventually these entrepreneurs create jobs and economic opportunities, and that’s the whole point and this is welcome,” Mr Hobart said.
UKTI helped to set up 1,773 foreign direct investment projects in the UK in 2013-14, up from 1,559 in 2012-13 from across the world. Only a small portion of that was from the Gulf region, according to Mr Hobart. The United States was the largest source country, accounting for 29 per cent of the FDI inflows, followed by the Netherlands, France and Germany.
The UK economy slowed to 0.5 per cent in the fourth quarter of last year, compared to 0.7 per cent in the previous quarter, with the services sector pulling most of the weight as the production and construction sectors contracted, according to Schroders asset management company.
“Today’s SME can be tomorrow’s huge business, and if we can get those companies growing through [us] they will be a part of UK success story as much as a Gulf success story,” Mr Hobart said. His office helped Toy Store, for instance, to navigate the setting-up processes in the UK.
There were 5.2 million SMEs in the UK last year, representing more than 99 per cent of all businesses, according to government figures.
The UK-Dubai Business Centre, which started in April and is housed in Dubai’s Department of Economic Development, helps small to medium-sized British businesses enter the market in the UAE.
The UAE imported Dh37 billion worth of goods from the UK, and exported Dh747 million in non-oil goods in 2013. That was up from Dh20bn in imports from the UK and Dh675m in exports in the previous year.
Although high compared with tax-free Gulf countries, the UK will lower the main rate of corporation tax to 20 per cent in April from 28 per cent in 2010, the joint lowest among G20 countries.
“There may be some local incentives and tax breaks in tech sectors,” Mr Hobart said, referring to the Gulf SMEs who might consider starting operations in the UK.
Similar business competitions were held for the US and Turkish markets last year.
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Updated: March 3, 2015 04:00 AM