x Abu Dhabi, UAEFriday 28 July 2017

Cut the red tape for aspiring new entrepreneurs

The idea of something close to "one-stop shopping" for anyone launching a corporate venture is good. But in other fields, too, life must be made easier for business.

You have a good idea, one that can make you some money. Full of entrepreneurial zeal, you decide to go into business. But your enthusiasm may soon bleed away as you suffer countless scratches, nicks and cuts while traversing the thicket of regulations and paperwork required of any new business.

This scenario is not exclusive to the UAE; all over the world governments regulate, supervise, tax, monitor and control businesses. There are often good reasons for this, but the net effect can be a brake on economic progress.

Small and medium businesses are vital to most economies. Yet while big firms can deploy a brigade of lawyers to comply with myriad regulations, small-firm owners with fewer resources may grow discouraged.

The authorities in Abu Dhabi, aware of this problem, have responded with a welcome fast-track method to help businesses get their doors open. By the end of this year, the Abu Dhabi Business Centre will unite 15 different government agencies that an entrepreneur may need.

The idea is to offer something close to "one-stop shopping" for anyone launching a corporate venture. The plan, with 28 other recently-announced Abu Dhabi measures, is intended to encourage the private sector, which is rightly seen as a good way to diversify the economy.

But the development of the new Centre itself reveals the magnitude of the problem: the 15 departments, agencies and other units to be involved in the Business Centre will not have integrated operations until year-end, if the schedule is met. In bureaucracy, everything takes time.

As welcome as the new Business Centre is, it is only one effort in a multi-front war against the costly and time-consuming paper burden companies must bear.

In fact, starting a business is not the only hurdle facing new businesses. The World Bank's International Finance Corporation annually ranks countries on the ease of doing business, and while the UAE ranks a satisfying 22nd in the world in starting a business, the real paperwork challenges come at other stages of a business's life: this country ranks 128th in protecting investors, 101st in resolving insolvency and 104th in enforcing contracts.

Sweeping away some of the red tape for start-ups is, in other words, the least-difficult part of encouraging private small business. The real challenges can be met by careful, comprehensive and bold improvements in the nation's companies law - which the FNC is discussing this week - a new bankruptcy law and related reforms.