SME Revolution with Expo 2020
The economic figures related to SMEs looks quite impressive. UAE government’s Vision 2021 has predicted SME contribution to reach 70% of UAE’s non-oil economy. Around 400,000 SMEs are currently operating in UAE which makes up the 60% of non-oil economy and provides employment to 86% of the private working class. Some other interesting contribution share numbers of SMEs are: (source: NBF Report on SME)
- 73% of the UAE’s wholesale and retail trade sector
- 16% of the services sector
- 11% of the industrial sector
Dubai is all set for Expo 2020 represent UAE to the world as one of the most business friendly country, supported by recent amendments to visa and ownership legislation, as well as corporate fees aimed at creating the finest business environment in the country.
Government vision to revolutionize SME
Many new ruels and policies have been implemented by the government and the central bank to enhance the capabilities and output of SME sector. Innovation is one thing that is strongly recommended, encouraged and supported by the government of UAE. A dedicated body – The National Program for SMEs have also been established by the ministry of Economy. The body would provide the SME’s with the frameworks, guidelines, advisory, training & any technical and managerial support they would need to setup business in UAE.
Government initiatives to support SME
1. Platform for entrepreneur
To achieve a sustainable & flouring environment for the SMEs for long run, the most important factor is the financial security and support that it can get from the UAE Government. To address this concern the ministry of Economy in UAE has collaborated with Securities & Commodities Authority (SCA) and Organization for Economic Co-operation & Development (OECD) to create a platform to fund budding SMEs.
2. Banking Support
Emirates Development Bank (EDB) launched AED 100 million credit guarantee scheme in February 2019 to support SMEs. To distribute these funds, EDB has already signed agreements with banks like NBF, CBD, RAK Bank, Mashreq Bank, Al Masraf & Commercial Bank International. Apart from financial assistance the banks are also helping SMEs by organizing seminars to address key challenges in the sector, government policies, information about VAT, etc.
3. Dubai SME
To help the SME entrepreneurs easily establish their business and rise on the index of ‘ease of doing business’, DED has announced new regulations for “Incubators & Business Accelerators”. The main aim of DED to have this body is to inspire potential SMEs to invest in innovation & people. Dubai SME which is the agency of Department of Economic Development (DED) in Dubai has launched an Equity Investment Initiative, aimed to provide investment and funding to SMEs through equity participation of venture capitalists, angel investors, and private equity companies.
Recent SME trends in UAE
The fintech start-ups have seen a rapid growth in the region. The sector which today is about USD 2 billion is expected to see annual growth of USD 123 million by 2022. The other industry that has seen an upward trend is hospitality. It is a billion dollar industry in Dubai and with Expo 2020, this industry is set to see huge upward trend.
Online business and tourism related business activities are also the fields that have a great future. Dubai has always been the most sought after tourist destination for people around the globe and new attractions being added each year will have a multiplier effect on the industry.
Conclusion
Expo 2020 has already created lot of hope and excitement about new business opportunities among investors and entrepreneur community. Many surveys already predict the substantial positive impact of expo 2020 on UAE economy. Expo 2020 will create many new job opportunities in tourism, services and banking sectors. Above all the UAE government continues to support the SME sector, by all means, it’s going to rise with lots of fortune creation!
This blog post is written by Ms. Divya, Senior Business Advisor at Flyingcolour business setup, accounting & VAT services in Dubai and across UAE. Call us for a more detail on your business setup enquiry. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.
