Giant Leaps Forward for Future World Capital of the New Economy

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CORONAVIRUS IMPACT

The Government of Dubai kicked off the new year with announcements on major plans for global promotion strategies for the emirate as an investment destination. New financing, infrastructure and incentives are on the horizon to make it easier and more efficient for new economy companies to be created, especially for start-ups and entrepreneurs.

On 14 January, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, launched the Dubai Future District, which will be dedicated to the new economy.

“Dubai Future District will connect DIFC, Emirates Towers & Dubai World Trade Centre, making it the Middle East’s biggest future economy-focused district. It will include a future economy research centre, incubators & accelerators and an innovative space for future economy pioneers,” said Sheikh Mohammed bin Rashid Al Maktoum on Twitter.

Sheikh Mohammed also announced the launch of the Dubai Future Economy Fund, a Dh1 billion fund to support new economy companies, which will operate out of Dubai Future District.

The Government of Dubai has set a new Dh2 trillion target for the volume of Dubai’s foreign trade by 2025, which will be supported by the creation of 50 offices around the world to promote Dubai’s investment, trade and tourism services.

“Creative Zone plays a key role in supporting the development of start-ups and helping entrepreneurs set up their businesses, so we will be working closely with the Dubai Future District to ensure its success. It will undoubtedly be a powerful motor for innovation and economic growth. Dubai’s company formation sector is booming. Just last year, Dubai’s Department of Economic Development issued 90% more business licenses than the previous year. That’s phenomenal,” said Lorenzo Jooris, CEO of Creative Zone, Dubai’s largest and most trusted business setup advisory firm.

“We are a strongly competitive investment destination, and we expect growth will continue, especially now that companies can be formed with 100% foreign investment in certain sectors, since the change in the government’s policy in 2019.”

Last year, Dubai issued 38,377 new licenses to businesses, creating 184,437 jobs. Foreign investors are mostly from the United Kingdom, Saudi Arabia, India, China, Bangladesh, Pakistan, Egypt, Jordan, and Sudan. In 2018, a total of 20,129 of new business licenses were granted.

Also, the World Bank’s Ease of Doing Business ranking for 2020, confirmed the UAE as 16th best country in the world, as well as the 1st in the Middle East and Arab region, according to a variety of indicators that illustrate how simple it is to set up and run a business in the country.

This year will also be a milestone for the emirate as it will hold, for the first time in its history, the World Expo, where 192 countries will attend, with an expected 25 million visitors to Dubai. As a celebration of human progress and imagination, the Expo 2020 Dubai will enable people to connect and explore the best of science, technology, innovation, and invention.

Economic performance

Dubai’s GDP is forecast to grow by 3.8% in 2020 and 2.8% in 2021, according to the government, but much will depend on external factors, such as global trade.

In the 2019 Knight Frank’s Global Residential Cities Index, Dubai posted a 7.3% decline in property prices between Q3 2018 and Q3 2019, which is a considerable concern for some investment analysts. Yet, for others, it is a signal for expected economic diversification, which has a strong perspective for solid returns.

“We need to stop assessing Dubai’s economic performance in terms of the price of real estate. It’s clear to everyone that the over-supply of real estate stock is hurting prices. But I believe, like a number of other market analysts, that a market correction will take place in the near future,” said Mr Jooris.

He added: “Also, the fact remains that Dubai’s economy is more than just about real estate today. The economy has shifted from being a real-estate-driven investment destination and is developing into a hub for innovation and new economic opportunities, such as the digital economy with blockchain and fintech prospects. And let’s not forget the green economy. Recently, Sheikh Mohammed launched the Green Economy Initiative, with the aim of making the UAE the centre for the export and re-export of green products and technologies.”

In 2020, Creative Zone is focusing on implementing new initiatives that will continue supporting the development of SMEs, start-ups and entrepreneurs in the region. Creative Zone’s new Start-up Accelerator programme, in partnership with key government and financial institutions, will support entrepreneurs in accelerating their journey by providing professional advice, coaching, marketing resources, tax and accounting support, human resources, access to investment, banking solutions as well as company formation support.

New products and services for Creative Zone clients are also being announced in Q1 2020 that will further expand the company’s position as a hub of support and solutions for entrepreneurs in the UAE.

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