Expo 2020 opens window of opportunity for SMEs in UAE

Dubai - There are 36 free zones in the country and a majority of them are located in Dubai. Cost of start-up packages begin from Dh15,000 and go up to Dh50,000.

UAE free zones are a golden opportunity for international and local investors, especially for small and medium enterprises (SMEs), to establish business in the country. Authorities behind these zones facilitate in turning investors' dreams into reality.
There are 36 free zones in the country and a majority of them are located in Dubai. Cost of start-up packages begin from Dh15,000 and go up to Dh50,000.
A recent report by the Dubai SME has termed SMEs as the "engine" for economic growth and vital contributors to the country's gross domestic product (GDP). In the UAE, SMEs account for 85 per cent of private sector employment, according to the 2014 Global SME Survey. They contribute around 46 per cent of the nominal GDP in Dubai and more than 60 per cent of UAE's annual GDP, setting an example of how SMEs can boost a country's sustainable growth and prosperity.
Today, more opportunities continue to emerge from the economy's diversified sectors, especially after the UAE won the Expo 2020 bid. This has enhanced the fundamental benefits enjoyed by big and small investors in free zones, starting from zero taxation, minimal barriers to entry and 100 per cent business ownership.
Historically, the biggest challenge faced by SMEs has been to get funding on easy terms. But in recent times, the government as well as financial institutions have tried to facilitate SMEs with favourable policies.
Despite these efforts, access to funds continues to be a problem for SMEs. To address this, certain companies offer cost-effective serviced offices and business centres that help SMEs working on small budgets to have sufficient office space for operations.
Winning the Expo 2020 will result in inevitable changes to the UAE's business landscape. The UAE currently hosts 12 million annual visitors. Statics show that 20 million people are expected to move into the region - an increase of eight million.
"With this major increase in population, the kind of infrastructure and businesses that will come into the country will be mindboggling. Huge establishments will channel their focus on these major infrastructural changes, making SMEs play a crucial role in running daily services. SMEs are very important to big companies as they cannot work independently," Price Global Group chief executive officer (CEO) Vishal Mahtani told Khaleej Times during an interview.
Founded in 2007, the Price Global Group operates a number of businesses. Office Direct is an e-retail stationery supply store while Privilege Rent a Car is a car rental service and Second Chance is a legal consultancy, debt recovery and legal aid firm. Recently launched business units include Younoh Media, a digital agency, and Price Global Business Centre, a serviced offices and business centre. In addition, the group is also involved in trading business.
Mahtani said the virtual world offers an easy way of doing business with minimum expenses, especially for SMEs. The virtual world is already an extremely popular platform for small businesses, he added.
A survey conducted by LinkedIn said that out of 260 SMEs, 92 per cent have a presence on social media. E-stores will be a new trend as SMEs cut down basic expenses such as the rent of a physical office space. The region will face a huge demand for space which means that setting up stores in malls or other prime outlets will cost more than the profit SMEs may accumulate.
The e-retail system will allow the smooth functioning of SMEs with a small budget. They will also benefit from being centrally located, allowing them to cater to the entire region without limitations. The e-commerce segment is recognised and adopted by people in the region and is expected to boom over the next few years.
- abdulbasit@khaleejtimes.com