Dh150,000 company start-up hurdle axed



The Dh150,000 capital requirement for start-up companies has been scrapped by the Government to help small businesses get off the ground without the burden of expensive red tape. The change is expected to provide a boost to small and medium-sized limited liability firms which have been among the hardest hit by the global financial crisis.

"Smaller businesses are generally the main drivers of any economy and make up the bulk in terms of employment," said Robert McKinnon, the head of research at Al Mal Capital, a Dubai-based investment bank. "This is a step in the right direction." Under new rules announced yesterday, partners in new business ventures will be able to determine the start-up capital needed to run their businesses. The previous system required a minimum commitment of Dh150,000 (US$40,000).

The changes were contained in a decree issued by Sheikh Khalifa bin Zayed, President of the UAE, the state news agency WAM reported. It amends a federal corporate law dating back to 1984. The change may help entrepreneurs such as Sabri Pozam, 29, from Turkey, who moved to Dubai five years ago and is starting his own business. "It's a big relief, to be honest with you," he said. "It's going to speed things up and affect our initial investment so we have more money to invest."

Mr Pozam plans to establish a business called Jungle Models, an online modelling portfolio website aimed at the fashion industry. He said he was shocked by the costs involved in establishing a new venture. "It's very expensive. The system has been designed for medium and big companies, but not for small businesses. You can see the effects on the economy," he said. The removal of the capital requirement represents the latest attempt by the Government to provide assistance to small businesses and start-ups that have struggled to overcome tightening credit, late payments and declining orders across many sectors of the economy.

In June, the Federal Cabinet approved the creation of the Emirates Development Bank, aimed at helping small businesses owned by Emiratis, while Sharjah has also launched a stimulus package to encourage banks to lend to small and medium-sized firms. The Government has also made about Dh120 billion dirhams available to banks to stimulate lending. "The issuing of the decree is aimed at limiting bureaucratic procedures as the investor won't need any bank certificates, for instance. This will limit the process time to set up private business in the country," WAM reported.

Hamad Buamim, the director general of the Dubai Chamber of Commerce & Industry, said: "We believe the new decree will definitely help in enhancing the UAE's appeal to investments and will provide the private sector with the right impetus it needs in these challenging times." The changes could help the UAE become more competitive, according to Jitendra Gianchandi, who runs a company that advises start-up firms.

He had received about 200 inquiries a week from people seeking advice on forming their own businesses before the financial crisis hit the region last year. Since then, that number had halved. "Clients had started complaining about the UAE's high capital requirements for would-be partners," he said. "It was very high and used to put off many ventures." The change will affect companies operating outside free zones, enclosed business parks that allow companies to operate without a local sponsor and to repatriate 100 per cent of profits.

"So far, the law is for the LLCs [limited liability companies] which are outside the free zones. Different free zones have different requirements of capital for different classes of companies," said Mr Gianchandi. Sultan bin Saeed al Mansouri, the Minister of Economy, described the move as "a positive step to attract more investments to the country". He added: "This decree underlines our leadership's vision and strategy aiming at developing the investment environment in the UAE, diversifying sectors and activities of our economy to ensure economic prosperity."

skhan@thenational.ae mkwong@thenational.ae

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Founder: Omar Onsi

Launched: 2018

Employees: 35

Financing stage: Seed round ($12 million)

Investors: B&Y, Phoenician Funds, M1 Group, Shorooq Partners

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Director: Navdeep Singh

Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain

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The specs: 2018 Mitsubishi Eclipse Cross

Price, base / as tested: Dh101,140 / Dh113,800


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Source: Federal Office for the Protection of the Constitution

Navdeep Suri, India's Ambassador to the UAE

There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.

It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.

What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.

When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.

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This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.

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  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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OPTA'S PREDICTED TABLE

1. Liverpool 101 points

2. Manchester City 80 

3. Leicester 67

4. Chelsea 63

5. Manchester United 61

6. Tottenham 58

7. Wolves 56

8. Arsenal 56

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10. Everton 50

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India
Virat Kohli (captain), Rohit Sharma (vice-captain), Shikhar Dhawan, Ajinkya Rahane, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni (wicketkeeper), Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Shardul Thakur

New Zealand
Kane Williamson (captain), Martin Guptill, Colin Munro, Ross Taylor, Tom Latham (wicketkeeper), Henry Nicholls, Ish Sodhi, George Worker, Glenn Phillips, Matt Henry, Colin de Grandhomme, Mitchell Santner, Tim Southee, Adam Milne, Trent Boult

Du Plessis plans his retirement

South Africa captain Faf du Plessis said on Friday the Twenty20 World Cup in Australia in two years' time will be his last.

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Moment of the day Given the problems Sri Lanka have had in recent times, it was apt the winning catch was taken by Dinesh Chandimal. He is one of seven different captains Sri Lanka have had in just the past two years. He leads in understated fashion, but by example. His century in the first innings of this series set the shock win in motion.

Stat of the day This was the ninth Test Pakistan have lost in their past 11 matches, a run that started when they lost the final match of their three-Test series against West Indies in Sharjah last year. They have not drawn a match in almost two years and 19 matches, since they were held by England at the Zayed Cricket Stadium in Abu Dhabi in 2015.

The verdict Mickey Arthur basically acknowledged he had erred by basing Pakistan’s gameplan around three seam bowlers and asking for pitches with plenty of grass in Abu Dhabi and Sharjah. Why would Pakistan want to change the method that has treated them so well on these grounds in the past 10 years? It is unlikely Misbah-ul-Haq would have made the same mistake.

Company profile

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Based: Abu Dhabi

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Initial investment: Dh150,000 from personal savings