My colleague Niall O’Toole was a speaker at the Scale Up UAE event for startups and entrepreneurs in Dubai. He highlighted a number of legal developments that are improving the landscape for startup businesses - as well as areas where more could be done.
Access to capital and high startup costs continue to be an issue, although the Middle East has seen a growth in accelerator programmes that offer support and facilities to growing businesses. Governments are also pushing for more SME involvement in public contracts - small and medium sized enterprises have so far secured more than 50% of awarded contracts for Dubai’s Expo 2020.
The UAE’s new bankruptcy law has so far had limited impact, but hopes are high that the newly-created register of moveable assets by the Emirates Development Bank to help SMEs secure loans and initiatives such as ADGM’s regulatory sandbox regime will help to encourage a culture of innovation. This focus on nurturing a startup ecosystem will be critical as the UAE and other countries in the region continue efforts to diversify their economies.
In Dubai, SMEs account for less than 40 per cent of the emirate’s total gross domestic product (GDP), but the Dubai SME 2021 Strategic Plan aims to increase this to 45 per cent by 2021. The bankruptcy law is one element of this, but the government has also created start-up ‘incubators’ offering discounted wi-fi and other operating costs to small businesses, and are encouraging SMEs to bid for public contracts.