New businesses pick up in UAE

The UAE economy gained momentum at the right time by posting a 6 per cent growth in new business licences this year, reflecting growing investor confidence in the country ahead of the one-year countdown to Expo 2020 Dubai that starts next month.

Latest official data indicates that a total of 32,256 new business lincences were issued across the UAE during first eight months of 2019, bringing the tally of active businesses to 572,615 from 540,359 at the end of December.

Abu Dhabi and

Dubai

remained investors' top choices to start new businesses in the UAE as the two emirates accounted for 70.6 per cent of the total number of business licences issued by the end of August, according to the Ministry of Economy's National Economic Register. Dubai held the first spot by issuing 268,574 business licences, followed by Abu Dhabi and Sharjah that granted 135,918 and 82,825 business permits, respectively, in the January-August 2019 period.

Analysts and government officials attributed the steady growth in business activity to government initiatives to protect the UAE economy from slowdown in global economy, US-China trade war and geopolitical tensions in the region.

Khalid Al Kassim, assistant directorgeneral for economic affairs at Dubai Economy, said businesses in the emirate are being innovative and seizing opportunities in spite of a challenging global economic landscape.

"Businesses in Dubai have been able to remain competitive and aim for the next level as a series of measures adopted by the government continue to enhance ease of business and create new economic opportunities," he said.

Experts said the significant increase in business licences corroborates economic growth estimates made by the Central Bank of the UAE, which projected 2.4 per cent economic growth in 2019.

Referring to the UAE government's bold decisions such as waiver of fines and renewal fees, stimulus package and visa reforms, they said the ease of doing business policy to facilitate investors has boosted not only new investors' confidence, but has also given a lifeline to existing ones.

"The UAE, with its unparalleled inclusive society, excellent infrastructure and security coupled with stable political environment, has always attracted investors and visitors alike," Atik Munshi, senior partner at Crowe, told Khaleej Times.

Despite the global downturn where many established countries have seen negative growth, he said the UAE has achieved the expected growth rate and continued to bring in more foreign direct investment.

"The government's proactive stance of reduction of fees and penalties and offering long-term visas has furthered the positive sentiment thus increasing the number of trade licences by a substantial number in this year so far," Munshi said.

"It is expected that the last quarter of 2019 and next year will bring in more such new investors with the Expo 2020 catalyst within eyesight. More needs to be done to attract manufacturing industries to the country which can ensure larger employment and stable growth."

In terms of legal status, latest data indicates that a total of 181,989 licences were issued for limited liability companies across the UAE, while 78,491 were registered for individual establishments and 3,935 for single-member limited liability companies.

Moreover, a total of 2,140 were issued for foreign companies and 848 for Gulf firms, with the rest of the licences divided between public joint stock companies, private joint stock companies and partnership en commendam companies.