The Startup Ecosystem in The UAE


The United Arab Emirates (“UAE”) is ranked as one of the most attractive economies throughout the globe for entrepreneurs to pursue a business. This holds true, especially for businesses that operate in the sectors of import and exports, global value chains and logistical networking. The Government of the UAE provides businesses with a lucrative regulatory environment with less bureaucratic intricacies and fast resolution of disputes. As a direct consequence of these provisions, this economy has witnessed double-digit growth in the number of successful startups since 2012.


Pertinently, the UAE has ranked first among the Middle East and North Africa region, in the COVID Economic Recovery Index published by the Horizon Research Group. This strongly resonates the fiscal and monetary stability of the state’s economy and highlights its strength to channel resources in order to manoeuvre through economic turmoil. Economic stability and economic protection are instrumental for the incubation of startups as it ensures survival of small entities which lack the financial power to deal with any economic downturn. In providing entrepreneurs with proper advisory and financial backing, the Government of the UAE has shown its serious commitment to encourage startups in the country.

In furtherance of these efforts, the World Bank in its Ease of Doing Business Index 2020 ranked the UAE as the 16th most feasible economy for business regulation and operation out of an evaluation of 190 economies. On the criterion of ‘starting a business’, which takes into account the procedural complexities, capital requirements and time taken for the commencement and operationalisation of small and medium sized businesses, the UAE was ranked 17th out of the 190 economies. These rankings stand as a testament to the sincere efforts made by the Government of the UAE to create a supportive ecosystem for the incubation of startups in the country.


In terms of setting up a business, the UAE provides a significant number of ‘Existing Free Zones’ (“EFZ”) to businesses. Thirty of these EFZ’s are located in Dubai whereas another ten are undergoing construction. These EFZ’s are safe havens for businesses as they allow for 100% foreign ownership within companies, zero corporate taxes, no import or export duties, 100% repatriation of revenues and profits, reduced documentation and a smoother visa processes for employees.

Moreover, the Dubai Chamber of Commerce and Industry (DCCI) has launched an advisory board with the objective of boosting the contribution of multi-national conglomerates in the moulding of the business regulatory regime. In 2019, the Government of UAE floated myriads of incentives aimed at cancelling or reducing over 1,500 government service fees by as much as 50% and granting long term residency permits to tech startup entrepreneurs in order to secure the finances of startups.


The challenge still looms over the Government of UAE to augment the startup ecosystem so that the contribution of the small and medium sized businesses can be bolstered from 40% of the GDP in 2017 to 45% of the GDP in 2021. Therefore, the Government still needs to provide incentives, further improve business support measures, reduce the related costs and promote robust commercial regulation.

On the other hand, for businesses, the obstacle lies in the strategy of exponentially expanding the scale of the business. This would require the UAE based startups to go beyond the markets of the state and into the Middle East and North Africa regions with a well chartered expansion plan.

Once these impediments are addressed, the attractiveness of the UAE as a launch pad for startups and entrepreneurs from all across the globe would be unparalleled.


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