The emirate retains its appeal as a regional business hub
Unfazed by slowdown in global economy, Dubai maintains its growth path and retains its appeal as the leading business destination in the region as more investors preferred to renew their trade licenses with the DED in the first 9 months of this year.
The latest report issued by the Business Registration and Licensing (BRL) sector of the Department of Economic Development (DED), showed 0.47 per cent year-on-year growth in renew-modify trade licenses during January-September 2018 as the department issued 23,963 licenses in the category compared to 23,850 in the same period last year. During the period, the department also issued 13,825 new trade licenses.
The DED, which has launched various initiatives on the ease of doing business by cutting red tape in line with government policy to attract foreign investors, reported a huge growth rate of 236 per cent in instant trade license issuance during the first 9 months of 2018. It issued 840 instant licenses in the January-September period 2018 versus the 250 issued over the same period last year.
Instant licenses take less than five minutes to issue and is one of the most popular categories among investors. The instant license is issued in a single step without the need for either a memorandum of association or an existing location for the first year of business.
The Commercial category remained a top choice for investors, accounting for 61.2 per cent of the total licenses issued during the period. The Professional category (36.5 per cent), tourism (1.2 per cent) and industrial (1.1 per cent) also attracted investors from across the globe seeking to start new business in Dubai. The report showed that the top nationalities that secured licenses were from India and Pakistan, followed by Britain, Egypt and France.
According to local consultants, Dubai provides an ideal business environment as well as a strategic location to investors and it has an edge over other Middle East countries as it provides a stable political climate, excellent infrastructure and an ease of doing business. Cost of living and business operating costs are also falling as rent is becoming cheaper.
According to the ‘Business Map’ – the digital platform of Dubai DED, 204,319 business registrations and licensing transactions were completed in the first 9 months of 2018. This reflects the ease of doing business in Dubai and the economic dynamism of the emirate, as well as the city’s attractiveness for companies across sectors seeking growth opportunities.
The ‘Business Map’ tracks business registration and licensing in DED and seeks to provide a picture of Dubai’s economic landscape through vital data on each license category, including their numbers and distribution as well as monthly investor trends.
The report also showed that license renewal and modification accounted for 23,963 transactions, while 24,208 were related to license modification, 80,168 for license renewal and 1,350 for certificates. The number of trade name reservations reached 26,040, while the number of initial approvals totaled 17,864.
The auto renewal service of DED, which takes less than two minutes via a text message, recorded 34,410 transactions in the first 9 months of 2018, 43 per cent of total renewed licenses (80,168).
According to Senior Partner of a multinational consulting firm, the combination of a high quality of life and a zero rate of income tax on most sectors makes Dubai a huge draw. Most businesspersons find doing business as a non-bureaucratic and straight forward proposition.
SMEs hold the key
The Senior Partner continued by stating that SME’s are the key to the UAE and Dubai economy as they comprise of the largest number of issued licenses. However, SMEs need a little hand-holding support from time to time.
“Currently SMEs do not enjoy the required financing from banks, which is one of the major hindrances. Central banks in many countries have a minimum percentage of lending reserved for SMEs, if the UAE adopts the same methodology then it will help the SMEs. A long-term visa for the investors, who has a minimum threshold of investment will help attract investors to the UAE,” he said.
“Lending to SMEs should be made easier, cheaper and less stringent. “I suggest SMEs should have holiday period-reduction in licenses and visa fees for the first five years so that they can survive,” he said.
The report also highlighted the distribution of new licenses in the first 9 months of 2018 according to the main areas in Dubai, with Bur Dubai accounting for the largest share (7,628), followed by Deira (6,156), and Hatta (41).
The top sub-regions were Burj Khalifa (1,721), Bur Dubai (1,102), Al Marar (878), Port Saeed (676), Naif (633), Dubai World Trade Centre 1 (544), Al Garhoud (489), Hor Al Anz (412), and Al Karama (341).
“With Expo 2020 Dubai around the corner, the market sentiment is expected to improve. If rents are kept in check than businesses will do much better,” he said. “We are positive and hope momentum will continue until Expo 2020 and beyond,”.
For more information on the company formation options across the UAE, please visit the Loggerhead Services website.
Source: Khaleej Times