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UAE is third top global hub to launch business in 2024

Latest ranking reinforces the UAE’s reputation as a magnet for start-ups

Published: Wed 17 Apr 2024, 3:29 PM

By
Issac John

A view of Dubai Internet City. Tecom Group’s incubator in5 has reported that funding raised by its start-ups since inception increased by 25 per cent in 2023. — File photo

Underpinned by proactive government initiatives and a thriving start-up ecosystem, the UAE figures as one of the most preferred global hubs for entrepreneurs to launch business in 2024, a new research reveals.

The study by Business Name Generator ranks the UAE in third position, after Hungary and the Netherlands, out of 52 nations analysed, and affirms that the second-largest Arab economy is an advantageous location for new companies. It takes just four days to legally establish a business in the UAE thanks to a business-friendly regulatory environment. Besides, the country offers a reasonable cost of living ($983.62 without rent) environment. Another highlight of the UAE is its extremely competitive nine per cent corporate tax regime, the second-lowest figure in the study.

Other factors including VAT, WiFi speeds, GDP growth predictions, and happiness scores were also assessed to determine the best places to launch a start-up.

According to start-up experts, the latest ranking reinforces the UAE’s reputation as a magnet for start-ups, offering an environment conducive to innovation and growth. As a frontrunner in the global start-up arena, offering a potent blend of economic vibrancy, favourable regulatory frameworks, and quality of life. “As entrepreneurs embark on their quest for success, the UAE stands as a beacon of opportunity, poised to catalyse innovation and growth on a grand scale,” an expert said.

“Entrepreneurs face many important decisions when launching or expanding their business, and choosing the right location is one of the most crucial. The location of a business can have a significant impact on its success, affecting access to resources, market demand, and competition,” said Linus Näslund, COO for Business Name Generator.

The UAE ranked reasonably for happiness, with a score of 6.6 out of 10, suggesting positive lifestyle benefits for entrepreneurs located there.

Finland was ranked the happiest country for entrepreneurs, with India coming out top for affordable living costs. The research named the Philippines, Italy, and Brazil as the most challenging locations to launch a start-up, due to high taxes and bureaucracy.

“Entrepreneurs must carefully consider the economic, demographic, and cultural factors of potential locations. They must also evaluate the legal and regulatory environment, including taxes, labour laws, and zoning regulations, and how these will impact their operations. Ultimately, the decision of where to launch can be a make-or-break factor for success, therefore, is vital for entrepreneurs to weigh up all relevant facets,” Naslund said.

Coupled with a projected GDP growth of four per cent in 2024 and a robust GDP per capita of $47,663, the nation presents a compelling case for start-ups looking to thrive amid a favourable economic landscape, the report said.

Abdulla Bin Touq Al Marri, UAE’s Minister of Economy, has said that the development of start-ups will play a critical role in bolstering the nation’s economy and contribute significantly to helping the nation achieve its target of doubling the GDP by 2031.

On the back of a thriving entrepreneurial ecosystem, the UAE, which ranks second in the Middle East region and 28th globally in the Global start-up Ecosystem Index, has been leading the Mena fundraising in January amid a VC winter, according to data provided by Lucidity Insights.

According to the index, in 2023, the UAE ranked second in the Middle Eastern region and 28th worldwide. In 2024, tech start-ups in the UAE are poised to experience a more conducive ecosystem with an expected surge in funding thanks to the country’s booming venture capital market which is projected to reach $1.1 billion.

Tecom Group’s incubator in5 has reported that funding raised by its start-ups since inception increased by 25 per cent in 2023 as Dubai continued to nurture homegrown innovation. The surge in funding, which reached Dh3 billion last year, is indicative of growing interest in Dubai’s homegrown enterprises, catalysed by government strategies to enhance the city’s position as a global innovation capital conducive to high potential enterprises. “It is a testament to Dubai’s entrepreneurial credentials and robust investor confidence in the city’s pro-business environment,” Tecom Group said in a statement.

Hub71, Abu Dhabi’s global tech ecosystem, has on-boarded more than 190 start-ups that have raised Dh5.4 billion collectively in venture capital since it launched five years ago to accelerate entrepreneurship in the emirate. Building on the 22 per cent increase in fundraising performance year-on-year, Hub71’s start-up community has created more than 1,100 jobs in Abu Dhabi and generated Dh3.5 billion in revenue, signing 118 corporate deals in the past two years valued at Dh658 million. Today, Hub71 start-ups operate in 22 sectors led by more than 320 founders from 54 nationalities who have established operations in Abu Dhabi to pursue further business growth and scale internationally.