New laws will give business start-ups in Dubai stronger protection to stave off bankruptcy and provide greater access to funding, the head of the emirate's small business organisation says. Abdul Baset al Janahi, the chief executive of the Mohammed Bin Rashid Establishment for SME Development, said new businesses run by expatriates and UAE nationals would receive more government support when the laws were introduced this year.
"You're talking about policy and the legislation cycle takes time, but there are quick things that we are doing," Mr al Janahi said. "Our positioning is as an agency that is responsible for the small-medium enterprises and the entrepreneurship in the emirate of Dubai. For us it's about the whole sector." Small and medium-sized enterprises (SMEs) account for about 85 per cent of all employment in the UAE and contribute to 46 per cent of its GDP, recent government estimates have shown. Yet many entrepreneurs, especially those trying to launch internet start-ups, have found it difficult to start their businesses in Dubai even before they open shop.
Buying a trade licence, gaining a visa and other fees can cost as much as Dh100,000 (US$27,226), taking a significant amount of capital before the business is launched. In the past, Mr al Janahi has said his organisation had lobbied the Dubai Government to amend bankruptcy laws to avoid entrepreneurs having to take drastic measures, including fleeing the country, to avoid insolvency. It is understood a draft law to amend bankruptcy rules was under review by the Department of Economic Development and other Federal authorities.
Abu Dhabi and Dubai are developing laws on frameworks for the recognition and regulation of small companies, and a national approach to supporting entrepreneurs is expected to be finalised this year. The system would create links between the governments' funding bodies such as Abu Dhabi's Khalifa Fund for Enterprise Development and Dubai's Mohammed Bin Rashid Establishment for SME Development. It would also provide more standardised support for Emirati entrepreneurs.
Mr al Jahani's organisation has already undertaken several initiatives to turn the spotlight on small businesses in the country. Last December, it provided a definition of what qualifies as a small business to encourage local banks to create specific financial products for entrepreneurs. dgeorgecosh@thenational.ae
