A new category of visa for entrepreneurs hoping to start a business in the UAE will be introduced.
Noura Al Kaabi, the chief executive of twofour54, and a member of the Federal National Council, made the disclosure during the opening address of the Arabnet Digital Summit 2014 in Dubai yesterday.
"The introduction of an entrepreneurship visa will allow entrepreneurs to set up a presence out of twofour54 without the need for a physical office," Ms Al Kaabi said.
This is the latest move to boost entrepreneurship and assist start-ups, in a country where small and medium-size enterprises employ 90 per cent of the workforce. Twofour54 currently issues visas for freelancers working in the creative industries, while Dubai Internet City offers discounted visas to entrepreneurs working with the accelerator company in5.
It is not yet known how much the new visa for entrepreneurs will cost or when it will be available.
Current visa restrictions require foreign nationals to have a definite offer of employment before entering the country. This makes it harder for foreign entrepreneurs to locate to the UAE to start businesses.
Ms Al Kaabi pointed to a number of further stumbling blocks preventing the growth of entrepreneurship, which “include lack of growth funding, limited proper educational infrastructure, government bureaucracy and inefficiencies, and culture”.
According to Sameer Sortur, a director at i360 accelerator, a firm that assists start-ups, “The workaround [for entrepreneurs coming to the UAE] is that [they] come in on short term visas. They start up their businesses through partnerships, then when they have a cash flow they open the start up.”
“The first thing a start-up has to do is to register a company and take a visa – whether or not they know what their business model is going to be.”
“From the day you get you the business licence you have one year – 60 to 70 per cent of start-ups fail after year one.”
A tight visa regime increases the pressure on entrepreneurs, who already have a high failure rate, he said.
Henri Hazougi, manager at Business Setup Consultants, which helps firms looking to launch in the UAE, said: “If the new mechanism with twofour54 makes the process for entrepreneurs easier, this will definitely be a great development for people across the region.
“They could adapt some of the elements from existing free zones, such as pre-approvals and monthly payments to make the process simpler and more customer-focused.
According to Mr Sortur, fees for registering a company, and applying to get a visa as an investor, range from Dh15,000 to Dh30,000, varying from free zone to free zone.
“That’s quite expensive for a start-up,” he said. “The visa system should be more flexible.”
Twofour54 declined to give any further details on the new visa system.
Follow us on Twitter @Ind_Insights