It is perhaps a sign of the times that one of the UAE’s many small businesses is a company that produces an emergency response kit. Dr Daamini Shrivastav, a Dubai physician, co-founded the business with a friend to produce the Trooper Box – a package to help a family weather a storm with first-aid supplies, food bars and candles. Although the idea came after the floods that hit parts the Emirates in 2024, the Iran war led to a pick-up in business at home and abroad.
Dr Shrivastav’s brainchild is just one of the many small and medium-sized enterprises that make up more than 94 per cent of the UAE’s businesses and contribute over 60 per cent to the country’s non-oil gross domestic product. Such employers and innovators are what help keep growth moving, even in volatile times.
However, for some of these businesses a new set of challenges have resulted from the outbreak of war on February 28. The ripple effects from disrupted supply chains, shipping and energy exports have pushed up operating costs for many. “When we launched last year, we made sure we had enough stock to tide us over for what we projected our two-year sales would be,” Dr Shrivastav told The National this week. “But we did not anticipate a war; a sudden surge of sales that impacted actual logistics.”
In an effort to introduce some certainty into uncertain times, the UAE government has taken action. Last week, the Ministry of Finance announced that it was extending its small business relief programme for corporate tax until December 31, 2029, in a move intended to support the Emirates’ many small companies, start-ups and entrepreneurs.
For a young company, the difference between paying a tax bill and retaining cash can mean the difference between hiring a new employee, buying stock, increasing marketing or simply staying afloat in another difficult quarter. And while many business owners have welcomed the move for the breathing space it brings, it would be a mischaracterisation to regard it as welfare or generosity. It is more accurate to regard it as policy with purpose.
For years, one of the UAE’s most powerful economic calling cards was its reputation as a low-tax business environment. A more mature economic model has arisen, and the corporate tax’s proportionality shows how the state can raise revenue while still nurturing businesses and supporting entrepreneurship.
This latest measure will ultimately be judged by outcomes, such as whether more companies invest, hire and grow. In volatile times, governments cannot remove every risk facing entrepreneurs such as Dr Shrivastav, but they can avoid adding unnecessary ones. For the UAE, helping the small businesses that have diversified its economy is an investment in resilience.
