How the UAE is addressing top challenges faced by entrepreneurs
Priya Wadhwa
10x Industry
Published:

How the UAE is addressing top challenges faced by entrepreneurs

Top challenges are being recognised and addressed.

69 percent of employees in the UAE want to have their own business, according to a recent study by Bayt. The romanticism of entrepreneurship, startups and the evolving culture of being your own boss is seeing more and more businesses setting up in the region. DIFC recently announced the registration of over 100 firms — a three-fold growth since end of 2018.

With so many startups being founded and receiving attention from the ecosystem, the economy is certainly happy. However, there are still some major challenges being faced by entrepreneurs, such as fundraising, hiring, customer acquisition, and more. However, these struggles haven’t gone unnoticed by the Dubai and UAE government.

Following are some of the most commonly faced struggles of entrepreneurs and what the UAE government is doing about it.

Banking and setting up

UAE has one of the largest number of free zones in the world, which makes setting up a lot more easier for expats, with 100 percent ownership. Moreover, in just 2019, the UAE announced that 122 economic activities on the mainland will allow 100 percent foreign ownership.

This week, it also announced the launch of Virtual Company Licence with which non-residents can partake in the economy and run a business without needing residence. Citizens of 101 countries can apply for this licence.

Banking has been recognised as one of the challenges in setting up. This has also been answered by Mashreq and Emirates NBD who have launched their digital banks for businesses, along with many other value additions.

Banking has been recognised as one of the challenges in setting up. This has also been answered by Mashreq and Emirates NBD who have launched their digital banks for businesses, along with many other value additions.

Moreover, Abu Dhabi has launched multiple initiatives to attract and support startups in the country’s capital. It launched the AED 535 million fund, set up to invest in tech startups and venture capitalists at Hub71. Through a government matching scheme, the fund has started co-investing with VCs since April, 2019. The fund is also going towards providing subsidies for licences, insurance and office spaces as well as accommodation.

Fundraising

UAE financial bodies launched the new fund passporting facility that allows investors more freedom to invest in the country. Moreover, the Virtual Company Licence will also allow international investors to partake in the growing economy.

In addition, the governments have been attracting international accelerator programmes that support startup and invest in them as well.

There are also new funds that have been set up for startups. Funding activities have been growing year-on-year, with many more investors interested in the startup ecosystem, especially family businesses.

Hiring

Hiring is a challenge faced by most investors, especially in sales and computer engineering. Many call it hard to find talented individuals.

In 2017, H.H. Sheikh Mohammed bin Rashed Al Maktoum launched the 1 Million Arab Coders Programme initiative that offers free educational programmes for individuals interested in developing their digital skills. They have also partnered with Coded, who is helping youth learn how to code and help businesses find talented individuals.

Customer acquisition and revenues

With so many startups being launched with a niche solution that caters to a small segment of the market, competition naturally increases.

A recent white paper by the Dubai Chamber of Commerce highlighted the importance of data, citing it as crucial for entrepreneurs to realistically evaluate their market size and potential before launching their products and services. The paper encouraged companies as well as governments to share data.

In addition, the UAE government has brought about a number of reforms, such as reduction in a number of fees, abolishment of certain fees, reduction in the time frame of payments that SMEs receive from 90 days to 30 days, along with many others.

A notable example is also the government’s initiative for SMEs to receive 5% of government capital projects, worth up to AED 400 million.