The Rise of Small Businesses in Dubai
The role of small businesses in Dubai’s economy should not be underestimated. According to Gulf News, more than 40% of Dubai’s GDP comes from the small-to-medium enterprise (SME). With such an incredible number, is not hard to see why small businesses are now thriving and coworking space Dubai is on the rise as well.
Different types of small businesses in Dubai
Small businesses are also known as SMEs. There are subgroups of SMEs: micro, small, and medium. How these groups are defined depends on which industry they fall into and the size of office space for rent they use.
There are three main industries for SMEs. These are trading, manufacturing, and services. If your business falls under trading, your business is considered as micro if you have less than 10 employees, small if you have 11-35 employees, and medium if you have 36 to 75 employees. That’s just one example of how SMEs are categorized.
Contribution of SMEs to the Dubai economy
It is estimated that more than 50% of Dubai’s workforce are employed by SMEs. They give job opportunities to the vast majority of UAE nationals and even foreign workers. Thus, it is no wonder that SMEs are considered to be the backbone of Dubai’s economy.
In the UAE, the Ministry of Economy estimated that more than 90 percent of the companies in the country are considered to be SMEs. Not only that, but more than 80 percent of the total workforce is coming from the SMEs. It is estimated that these figures would even increase by the year 2021.
Challenges faced by small businesses
In Dubai, it is estimated that about 50% of small businesses are only five years old and only five percent are older. This shows you the challenges that SMEs face in the midst of the UAE economy.
Like any businesses, SMEs aim to achieve growth and sustainability. Along with this goal, the main challenges would include raising funds, improving sales, maintaining cash flow, finding the right serviced office, and improving customer services.
Aside from these internal struggles, there are also external factors that make life tougher for SMEs. These include red tapes, cost of visas for expats, licence fees, and even lack of insolvency regulations.
The government and SMEs
Thankfully, the government got the back of SMEs in Dubai. Overall, Dubai is for the growth and prosperity of its SMEs.
Recently, Dubai’s government decided to speed up payments to SMEs. It is aimed that payments would be given to SMEs within 30 days instead of 90 days. Since the government provides lower interest rates on loans compared to banks, more SMEs would now have a better way to grow their business. This gives SMEs improved cash flow.
For expats, there will be new visas available for older people. This allows expats and foreigners to obtain extended residency visas even after they retire. As you may know, some SMEs are owned by seasoned and older entrepreneurs who are from other countries. Giving expats a chance to stay longer in Dubai would help them better take care of their business.
With the government continually and actively looking for ways to help SMEs, there’s no doubt that they will keep growing and supporting Dubai’s economy.
Starting your own business?
The future of small businesses looks bright in Dubai. If you are planning to start your business in Dubai or in business center Tower Media City, then let Austria Business Center help you. We offer offices for rent as well as legal, administrative, PRO, PA, and telecommunication services. Give us a call today and see how your business can take off with their help!