The UAE was recently recognised as the most ideal country for entrepreneurs by Global Entrepreneurship Monitor (GEM). The recognition comes as yet another feather in the UAE’s cap, having constantly excelled at ‘ease of doing business’ rankings year after year. The countries were ranked based on how favourable they are for setting up new business ventures. A total of 50 countries were evaluated by the report over factors like government policies, infrastructure, initiatives for business education, socio-political conditions etc. The below table shows the 13 Entrepreneurial Framework Conditions (EFCs) over which the countries were evaluated.
|A1. Entrepreneurial Finance||Are there sufficient funds for new startups?|
|A2. Ease of Access to Entrepreneurial Finance||And are those funds easy to access?|
|B1. Government Policy: Support and Relevance||Do they promote and support startups?|
|B2. Government Policy: Taxes and Bureaucracy||Or are new businesses burdened?|
|C. Government Entrepreneurial Programs||Are quality support programs available?|
|D1. Entrepreneurial Education at School||Do schools introduce entrepreneurship ideas?|
|D2. Entrepreneurial Education Post-School||Do colleges offer courses in starting a business?|
|E. Research and Development Transfers||Can research be translated into new businesses?|
|F. Commercial and Professional Infrastructure||Are these sufficient and affordable?|
|G1. Ease of Entry: Market Dynamics||Are markets free, open and growing?|
|G2. Ease of Entry: Burdens and Regulation||Do regulations encourage or restrict entry?|
|H. Physical Infrastructure||Is this sufficient and affordable?|
|I. Social and Cultural Norms||Does culture encourage and celebrate entrepreneurship?|
Source: Global Entrepreneurship Monitor
The countries were assessed over the 13 factors and assigned a score for each. A National Entrepreneurial Context Index (NECI) was calculated by computing the average of the 13 scores. The UAE lead the chart with a NECI score of 6.8 beating countries like Saudi Arabia, Canada, Norway, and Israel. The UAE scored the highest for factors such as government support, post-school entrepreneurial education, and research and development transfers. Besides these, the UAE was the top performer for factors like support for female entrepreneurs and prioritization of environment.
What makes UAE the ideal destination for business setup?
Let’s analyse the reasons why the UAE constantly excels at global rankings for business-friendly destinations.
1. Tax benefits
The UAE is known to have one of the best tax regimes in the world. At 5% and 9% respectively, the UAE’s VAT and the soon-to-be imposed corporate tax are amongst the lowest in the world. Moreover, free zone and offshore companies in the UAE are exempt from paying any taxes.
2. New ownership laws
While free zones in UAE have always permitted 100% foreign ownership, the latest regulations allow complete foreign ownership for mainland companies. With these new reforms, a local sponsor is no longer required and an expat can own 100% shares in a mainland company.
3. Abundance of labour and talent
With a diverse pool of talent and labour from across the world, the UAE has never faced any kind of shortage of skilled professionals. Besides an employee-friendly labour law, the newly introduced initiatives like the golden visas have ensured that the country continues to attract a highly skilled workforce from around the globe.
4. Economic stability
The UAE can be easily counted amongst the most economically stable countries. Adequate financial reserves, strong international relations, and progressive economic policies are some of the many reasons behind the UAE’s economic stability.
5. Strategic location
With easy access to multiple seaports and airports, businesses in the UAE have immense logistical benefits. The UAE’s strategic location between the east and the west has strengthened its stature as a regional trading hub. Suffice it to say that the UAE is home to the world’s busiest airport and the busiest seaport in the middle east.
Considering the factors above, it can come as no surprise to conclude that the UAE has every desirable quality of an ideal business destination. However, setting up a business can still be daunting task no matter how favourable the business destination can be. Selecting the right jurisdiction, figuring out the costs involved, and obtaining the trade license are just some of the many things that need to be addressed before setting up a business. This is where there is a need to have a business setup advisory by your side. InZone is a leading corporate services provider in the UAE and offers end-to-end assistance in setting up businesses.