Small Businesses in the UAE

Small business is the pillar of any country's economy. The UAE is not an exception. The market segments where small businesses are engaged include consumer goods, retail trade, tourism, and professional services. The sectors in the segments mentioned above that have the leading role include the hotel industry and catering services. The number of enterprises in these market segments is forecasted to grow rapidly. In the UAE, small businesses account for over 60% of the country's GDP. Qualifying entities make up about 90% of the total enterprises incorporated in the UAE. About 92% of the local labor force in the UAE is engaged in the small business sector. The international economic experts have presented views that small businesses in the UAE will play an important role in the diversification of the economy and save the country from oil dependency.

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Achieving economic growth and stability is not possible without developing the small and medium business sector. The significance of this economic sector has drawn the attention of the UAE government to identify it as an area of priority within the framework of public policy. The intervention of the UAE government includes creating a favorable investment climate and opportunities for the development of small enterprises. Part of the support that the government has offered includes reduction of corporate and value added taxes and waiver of income taxes for employees of start-ups. However, the UAE government providing passive support is not sufficient. The government has launched programs to maintain maximum cooperation to enhance competition and offer commercial and financial support. The entrepreneurs seeking to establish businesses in the UAE can enjoy a wide range of support and resources such as funding, registration, workspaces, media, among other services.

Banking Services

Efficient and affordable banking services are extremely important for business success. The UAE harbors a wide range of institutions to provide banking services. The SME Advance from Gulf Finance offers business financing through loan packages for small and medium-sized enterprises. The packages that include secure-finance and interest-only have an additional advantage as they prevent jail time for bounced checks. The Business Banking Division of Emirates NBD provides financing for micro and small organizations and transaction-only customer. It has established nine dedicated and accessible SME Centers around the UAE. The UAE government set up an AED 100 million government kitty to support SMEs (Tsuruta 2014). The HSBC UAE SME Fund provides trade finance, capital investment finance, post-dated checks, and commercial loans. The Islamic finance options are also available. The National Bank of Abu Dhabi and all its branches have Business Advantage and Business Basic accounts which provide dedicated SME banking services (Caldwell 2015).

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The UAE has various private and government institutions that link companies to investors. One of the institutions is the Investors Angel investor network. The network hosts events to link companies to investors. It has over 1000 private investors, numerous family offices, and funds for start-up businesses. The Khalifa Fund is an AED 500 million worth government fund that stimulates local entrepreneurship. Emirati-owned companies can access training, 7-year interest-free loans, post-funding support, and advisory (compact range aimed at small businesses 2015).

Small businesses in the UAE also receive marketing support from established public companies. The global investment arm of Intel Capital supports innovative technology start-ups by making equity investments in the companies. The companies which benefit from this support include software, hardware, and services targeting enterprises. By making equity investments in these companies, Intel provides marketing support and consultation services on the technology front.

The UAE hosts organizations that offer business incubation to entrepreneurs with business ideas. An example of such an organization is MBC Ventures. MBC is a media-based venture capital fund that invests more than AED 300,000 in young entrepreneurs with significant ideas and businesses in the media industry (Baldwin 2015). MBC incubates these ideas till they become viable enterprises. The financial support and advisory services help people develop their ideas into viable businesses. Also, N2V, a venture capital fund funds Arabic ventures in e-commerce, social media, mobile applications, and digital publishing.

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The government has also created organizations to facilitate business incubation. The government of Abu Dhabi created Twofour54 to fund, incubate, and offer business services to upcoming and small businesses. The facility is located on a large campus to turn Abu Dhabi into a center of excellence in content creation. The facility supports media platforms such as film, music, broadcast, digital media, gaming, events, and publishing (Ghosal, & Ye 2014).

Governmental Services

Governmental services are necessary for entrepreneurs to start businesses. The businesses should be registered and regulated. The government of the UAE has enhanced measures to expedite the process of business registration. In response to this demand, the UAE government has the Dubai Department of Economic Development which oversees business registration and regulation. The authority conducts business registration and issuance of trade licenses for onshore companies. The second authority that regulates businesses is TECOM Investments. The authority regulates and manages Dubai free zones in Internet City, Studio City, Media City, and Knowledge Village (Syla & Lecaj 2015). It supports registered companies to rent office space. Private associations also offer supportive services to businesses. The Young Business Leaders is a facility founded by Mohammed Bin Rashid. The facility has offices that offer support in administration, training, and incubation to develop Emirati-owned small businesses. It also offers support for experts.

Incubators and Accelerators

The government of the UAE recognizes the importance of business incubation and acceleration to entrepreneurs planning to start businesses and those who already own small businesses. The government established the Dubai Enterprise Center (DEC) to provide business incubation consistent with international best practices and to provide a wide range of targeted services and resources to young entrepreneurs. Business acceleration is also at the heart of the UAE government. The government established SeedStartup, an accelerator program with a focus on mobile, digital media web, and software startups. The program invests $20,000 for a 20% equity stake (Dzwolak 2015). The program takes start-ups through a mentorship-focused acceleration program for three months. Private organizations also participate in business acceleration. For example, StartAppz, a mobile application accelerator focuses on exposing the idea stage and early mobile applications to market (Kennedy 2015). The organization locates startups in the Gulf region and sends mentors there. It also provides physical incubation facilities.

Mentorship & Training

Small businesses need more than funding and regulation to continue operating in the competitive business environment. The UAE has vast opportunities for mentorship and training. A wide range of government programs and privately-owned organizations offer mentorship and training to entrepreneurs to start and sustain their businesses (Carraresi, Mamaqi, Albisu, & Banterle 2015). The Mowgli Foundation is a good example of an organization in the UAE that offer mentoring programs for entrepreneurs with struggling financial backgrounds. The potential is a startup support and advisory firm that is in charge of implementing the SME Evolution program. Apart from offering to train, it connects startups to investors. Small business owners can obtain consultancy on strategy, finance, and business planning from organizations such as Tandem (Bruening, Strazza, Nocera, Peek-Asa & Casteel 2015).


Small businesses have a wide range of support in the UAE. The government institutions and programs provide services to all stages including business registration, incubation, training funding, and linkage to investors. Privately owned organizations also contribute significantly towards the provision of essential services and support that small businesses require starting and operating in the UAE. A combination of these facilities makes the UAE an attractive hub for investment.

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