Land access a hurdle for firms
Problem hits investment in physical and human capital by 22% and 35% Moreover, the study showed that when access to land is a problem, this has adverse impacts on the investment behaviour of entrepreneurs.”
Fifty-three per cent of firms in Dubai find access to land as the major obstacle for their business operations, a study developed by the Dubai Economic Council said yesterday.
Hani Al Hamli, secretary general of Dubai Economic Council, said: “Land is a fundamental input among the factors required to start up a business.”
“Moreover, the study showed that when access to land is a problem, this has adverse impacts on the investment behaviour of entrepreneurs.
“The problem of land access in Dubai is likely to be associated with institutional and regulatory problems, given that its economy offers ample supply of commercial property to business.”
In particular, the study said that the probability of investing in physical and human capital drops by 22 per cent and 35 per cent, respectively, for firms claiming access to land to be a major obstacle in their operations.
Recommendations
The study suggests that the economic authorities should enhance the transparency and predictability of land market regulations and dispute settlement in Dubai as well as consider introducing access to commercial land ownership in the Free Zones.
There are three key aspects that underline a study of ‘land’ as obstacle for business operations in Dubai, according to the paper.
The vast majority of entre-
drop in probability of ivnestment for firms claiming access to land to be a major obstacle in their operations.
preneurs opening and running businesses in Dubai are foreigners.
Only 10 per cent of the population in Dubai is local, and only about 2.5 per cent of enterprises in Dubai are solely owned by locals.
The second aspect is that foreigners wishing to set up a business in the free zone are not allowed to buy land for commercial purpose, they can only rent land or build up premises while they can do so in the free hold areas of Dubai Main.
The third important aspect attributed to the difficulties of land access in Dubai is the sponsorship rules operating in the UAE non-Free Zone that ties each foreigner willing to invest in Dubai with a sponsor who acts as the legal representative of the entity in the UAE, the study said.