The ever-changing skyline of the UAE's major cities is a daily reminder of ongoing development in the country's markets. But behind expanding cities, another aspect of the Emirates continuously evolves: its business environment. In recent years, the government has enacted new policies to make it easier for domestic and foreign companies to operate in the country, and ultimately make the UAE not just a market, but a commercial home.
Today, starting a business in Abu Dhabi just got a lot easier. Company set-up fees will be cut to Dh1,000 ($270), a reduction of 94 per cent. The new charges apply to six activities within the business licence. This will be a particular boost for smaller enterprises and start-ups, central pillars in the UAE's plans for economic growth, which do not have the same financial resources as bigger, global firms.
This is not an isolated reform. From ongoing changes in the country's visa system to attract talented professionals, to vast investment packages such as yesterday's news that Abu Dhabi Investment Office will provide $24.5 million in funding to help three technology companies develop their operations in the emirate, government is turning its attention to creating the conditions needed for a business to grow and thrive.
The agenda appears to be working. The value of foreign direct investment in the UAE, an indicator of a country's competitiveness, increased by 11 per cent last year to almost $20 billion. This makes it the 15th-largest recipient globally, an especially striking achievement given that global rates plunged by 35 per cent last year, according to UN numbers.
Helping business has become particularly important in a world locked down by Covid-19. Major disruption has hit most markets, and differing rates of recovery across the economy means diversification makes even more sense than before. Abu Dhabi has supported all sorts of companies throughout the pandemic with rent rebates, discounted bills, loan guarantee packages and wider plans to encourage economic growth through investment. The main goal of this programme is alleviating economic pain in the short to medium term, but commitment to business paves the way for positive change after the pandemic, too.
Government support throughout Covid-19 has been particularly important for small and medium-sized businesses, a key part of the UAE's economic development plan, but which due to their size are more vulnerable to financial shocks such as the pandemic. Last month, in a package that demonstrated the country's commitment to growing the number and strength of these firms, the government launched a series of initiatives, including business accelerators to create ties between family companies and start-ups, an academy to teach entrepreneurship to UAE residents and plans for an investment summit next March.
Private enterprise has taken the limelight throughout this years-long reform programme. But it is important to remember the symbiotic relationship between business and government, whose decisions make private sector growth possible. Most importantly, a competitive UAE is more than just a domestic success. It is a financial one for the region, boosting trade and offering jobs that are in short supply elsewhere. It shows countries across the Middle East that governments do not have to be an inherent part of the problem. Listening to the private sector and weighing in when necessary, especially in crises, is good practice that should be followed by all.