DUBAI MEANS BUSINESS
dubai — Unfazed by a slowdown in the global economy, Dubai continues to stay on a growth path and retains its appeal as a business destination in the region as more investors have preferred to renew their trade licences in the first nine months of the year.
The latest report issued by the Business Registration and Licensing Sector of Dubai’s Department of Economic Development (DED) showed a 0.47 per cent year-on-year growth in renew-modify trade licences during the January-September period as the department issued 23,963 licences in the category compared to 23,850 in the same period last year. During the period, the department also issued 13,825 new trade licences.
The DED, which has launched various initiatives on ease of doing business by cutting red tape in line with the government policy to attract foreign investors, reported a huge growth rate of 236 per cent in instant trade licence issuance during the first nine months of 2018. The department issued 840 instant licences in January-September against 250 compared to the same period last year.
Atik Munshi, senior partner, Crowe
Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group
43%
Utilised the DED’s auto-renewal service
Instant licences take less than five minutes for issuance and it is one of the most popular categories among investors. The instant licence is issued in a single step without the need for either a memorandum of association or an existing location for the first year only.
The commercial category remained a top choice of investors as it accounted for 61.2 per cent of the total licences issued during the period. The professional category (36.4 per cent), tourism (1.2 per cent) and industrial (1.1 per cent) also attracted investors from across the globe to start new business in Dubai. The report showed that the top nationalities that secured licences were from India and Pakistan, followed by Britain, Egypt and France.
Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, said Dubai provides an ideal business environment as well as a strategic location for investors. “Dubai has an edge over other Middle East countries, such as political stability, excellent infrastructure and ease of doing business. Cost of living and operating cost to run a business are also coming down because rent is becoming cheaper,” Gianchandani told Khaleej
Times on Saturday. According to the ‘Business Map’ — the digital platform of the DED — 204,319 business registration and licensing transactions were completed in the first nine months of 2018. This reflects the ease of doing business in Dubai and the economic dynamism of the emirate, as well as the city’s attractiveness for companies across sectors seeking growth opportunities.
Atik Munshi, senior partner at Crowe, said Dubai has been a business destination for decades. It offers a free business platform for both startups as well as large corporations. “Quality of life is one of the best in the world. A zero rate of income tax on most sectors makes is a huge draw. Most businesspersons find doing business as a non-bureaucratic and straight forward proposition. Once you stay in Dubai for a few years you are actually hooked to it,” he told Khaleej Times.
The Business Map tracks business registration and licensing in the DED and seeks to provide a picture of Dubai’s economic landscape through vital data on each licence category, including their numbers and distribution as well as investor trends on a monthly basis. The report also showed that licence renewal and modification accounted for 23,963 transactions, while 24,208 were related to licence modification, 80,168 for licence renewal and 1,350 for certificates. The number of trade name reservations reached 26,040, while the number of initial approvals totalled 17,864.
The auto-renewal service of the DED, which takes less than two minutes via a text message, recorded 34,410 transactions in the first nine months of 2018, 43 per cent of total renewed licenses (80,168).
SMEs hold the key
Munshi said small and medium enterprises are the key to the UAE and Dubai economy; they comprise of the largest number of licences issued. SMEs need a little hand-holding support from time-to-time.
“Currently SMEs do not enjoy the required financing from banks, which is one of the hindrances. Central banks in many countries have a minimum percentage of lending reserved for SMEs; if the UAE adopts the same methodology then it will help SMEs. A long-term visa for investors, who have a minimum threshold of investment, will help attract investors to the UAE,” he added.
Gianchandani said lending to SMEs should be made easier, cheaper and less stringent. “I suggest SMEs should have a holiday period-reduction in licence and visa fees for the first five years so that they can survive,” he said.
The report also highlighted the distribution of the new licences in the first nine months of 2018 according to the main areas in Dubai, with Bur Dubai accounting for the largest share (7,628), followed by Deira (6,156) and Hatta (41).
The top sub-regions were the Burj Khalifa (1,721), Bur Dubai (1,102), Al Marar (878), Port Saeed (676), Naif (633), Dubai World Trade Centre 1 (544), Al Garhoud (489), Hor Al Anz (412) and Al Karama (341).
Munshi said the business scenario is currently not at a peak primarily due to low consumer demand. However, most businesses have a positive outlook for the future.
“With Expo 2020 Dubai around the corner, market sentiment is expected to improve. If rents are kept in check then businesses will do much better,” he said.
“We are positive and hope momentum will continue until Expo 2020 and beyond,” Gianchandani said.