UAE encourages entrepreneurship
The Dubai Silicon Oasis (DSO) hopes to become the Silicon Valley of the Middle East. (Pixabay)
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New markets, new consumers, the rise of Internet technology - Dubai is the new boom town. Social entrepreneurs are creating companies that help the UAE become more globally connected and the government supports entrepreneurs through a variety of ways, especially through the Mohammed bin Rashid Establishment and Foundation.
A 2011 study by Kipp Report and YouGovSiraj has found that many Arabs are still hesitant about starting a new business, however. The research focused on entrepreneurship in GCC countries and found an interesting difference between Emiratis and Saudis in terms of entrepreneurial drive. Seventy-one per cent of Saudis mean to start up and run their own businesses while just 48 per cent of Emiratis are determined to do so. Of note, however, is that 34 per cent of the Saudi participants work in the government so private sector business drive may still belong to Emiratis.
The Kipp/YouGovSiraj report found that although growth potential for small and medium enterprises, or SMEs, in the UAE is great; 66 per cent of Emiratis believe that starting up a new business would be "somewhat or extremely difficult" and that "strict government regulations" are one of the number one obstacles to such a start-up. Emiratis also believe global brands have saturated the market and only 37 per cent would consider making use of online sales. The other thing the study found was potential entrepreneurs think that lack of a sponsor and lack of industry research are other obstacles to setting up a business.
If you're an entrepreneur wannabe, you should realise that these perceptions are skewed. The government has been busy removing obstacles to start-ups for over a decade; new markets are opening all of the time; industry research and statistics are available; and there are plenty of sponsors, venture capitalists, bank loans, advisors and guides to help you put your ideas into action.
The Dubai Silicon Oasis Authority is a government branch designed to help entrepreneurs that want to open up businesses in high-tech fields. It is hoped that Dubai Silicon Oasis, or DSO, will become the Middle East Silicon Valley. At DSO, you can find mentorship programmes, advice on business planning and information about markets, access to the DSO network and business incubation programmes and IP support and protection. You can also get your Entrepreneur Business Licence through the DSO.
The Mohammed bin Rashid Establishment for SME Development has been working hard to ease small and medium business start-ups and growth in the UAE. They are in the last stages of this growth initiative. From 2011 to 2015, the Mohammed bin Rashid Establishment has been working on financing plans, business incubation, entrepreneur relations, SME capability development programmes, market information and research, account management systems, and networking and outreach marketing to encourage, help and support new SMEs in the UAE.
As far as law and policy, the Mohammed bin Rashid Establishment has created the New Companies Law, reducing start-up costs by abolishing minimum capital requirements for entrepreneurs to establish new companies. Two new laws are also in progress: a bankruptcy law meant to reduce entrepreneur's fear of failure and a SME development law to unify definitions, coordinate support polices and improve business statistics.
The Mohammed bin Rashid Establishment is also working on an IP and innovation plan, SME sector studies, an SME Development Council, a five-year plan for SMEs in Dubai, a foreign IP attraction plan, academic and business linkages and a Dubai SME 100 list. The business incubation offerings of the Mohammed bin Rashid Establishment are wonderful. This three-phase, three-year plan offers you virtual offices, an idea lab, research and support, counselling, training and development, business plan preparation, marketing, networking options and help in developing accounting systems.
In terms of funding and financing, the Mohammed bin Rashid Establishment has offered a credit guarantee scheme since 2003, a seed capital programme since 2010 and a venture capital programme started in 2011. The establishment has developed a SME Friendliness Index and an Alternative Investment Market listing for financial institutions. It also offers SME financial reporting requirements. Two studies are underway: an SME development bank and an SME credit rating bureau.
The Mohammed bin Rashid Establishment has procured loans for entrepreneurs up to Dh3 million. As a start-up, you can get a low interest rate, get a three-year grace period and a five-year settlement period. With this programme, you put in just 20 per cent of the total project cost of your business start-up.
Through the capability development programme, you can take short courses that are also offered in the evening, courses in cash flow management and how to bid and how to prepare documents among others. You can learn all about exporting from the Export Development Corporation and learn about new markets and the regulatory issues of importers. You can join the New Exporters Programme and take intellectual property management training.
You can also make use of the entrepreneur relations programme, which has a start-up advisory, a trade licence subsidy, and a three-year membership in the Dubai Chamber of Commerce and Industry. Additional avenues for outreach include events organised by the Mohammed bin Rashid Establishment: the Mohammed bin Rashid Awards for Young Business Leaders, the Young Entrepreneur Competition and the Franchise Middle East Exhibition. Besides there are events like Millionaire Summit taking place from November 19 to 21 in Dubai and launched by Wealth Dynamics Unlimited.
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