UAE considers 10-year 'golden licence' to boost business

Proposed long-term commercial licences will instil confidence among investors, analysts say

Cloudy skies seen over skyline, Abu Dhabi. Khushnum Bhandari / The National

The UAE government is contemplating a proposal to introduce new commercial licence regulations, including a 10-year golden licence and a five-year silver licence, to boost business activities in the Emirates.

Industry analysts and top executives say if the proposed commercial licences are introduced they will instil confidence among investors and enhance the attractiveness of the UAE for businesses planning to establish operations here.

“It is certainly a good signal to the whole world that the UAE is opening [up] to international companies to come and make the Emirates their primary home for business,” Naeem Aslam, chief investment officer at Zaye Capital Markets, told The National.

The proposal was discussed by the Economic Integration Committee this week during its second meeting of the year under the chairmanship of the Minister of Economy Abdulla bin Touq.

The move aims to boost government revenue, stimulate business activities, and foster sustainable growth and prosperity in the country, the government said in a statement.

This would be an important step for the UAE, the Arab world’s second-largest economy, in more than one way, said Hisham Al Gurg, chief executive of the Seed Group and the Private Office of Sheikh Saeed bin Ahmed.

“If the proposed long-term commercial licences come into play, it will not only add to the confidence of businesses in the Emirates but it will also empower the start-up community from around the world – the ones who are looking to make the UAE their new permanent base,” Mr Al Gurg said.

Seed Group acts as a springboard for global start-ups that are willing to expand into Dubai and the wider Middle East. It has invested in diverse sectors such as technology, cyber security, health care, FinTech, tourism and hospitality.

Currently there are more than 100 companies working under the group’s umbrella through investments or strategic partnerships.

“One of the major concerns of SMEs and start-ups is business continuity and that’s what the UAE government is serious to address. The move will infuse much-needed confidence and will subsequently add to the FDI inflows to the economy, expediting the efforts to move away from hydrocarbons dependence,” Mr Al Gurg said.

In the past few years, the UAE has implemented various policies and legislation, fostering a competitive environment for conducting and setting up businesses and economic activities in the country.

These developments have unlocked diverse opportunities for businesses, investors and entrepreneurs from around the world, leading to a rise in the number of companies operating in the UAE to over 788,000 by the end of last year, according to Mr bin Touq.

The proposed new permits will attract global entrepreneurs as it will promise longevity to their businesses, said Ranjith Kaippada, managing director of the Dubai-based Cloud Box Technologies.

“Sometimes very basic things like renewing a licence keep an entrepreneur away from the market as could be very time-consuming and tedious process.

“A licence for five years or 10 years will boost confidence and let entrepreneurs focus on other constructive stuff. We have not seen any other government taking such bold steps … being an entrepreneur, we feel confident to be here in Dubai at this moment,” Mr Kaippada said.

The UAE has unveiled several initiatives and policies – from allowing 100 per cent foreign ownership of companies to more flexible visa programmes – to help attract more capital and talent to the country.

“Regulation is increasingly driving the strategic agenda, the world over. This is a powerful new proof point,” Sam Blatteis, chief executive of The Mena Catalysts, which advises technology companies on policy and government affairs in the region, told The National.

“The UAE government is doing so much more than setting the rules; it fuels growth in imaginative ways on multiple levels. They are less regulator … more catalyst … it is home to more than 780,000 companies, revealing its magnetic pull,” Mr Blatteis said.

The UAE economy is expected to grow by five per cent this year, driven by a robust expansion in the country's non-oil sector and an increase in foreign direct investment.

The country has also set an ambitious target of attracting Dh550 billion ($150 billion) in foreign investment by 2031 and ranking among the top 10 countries globally in terms of attracting FDI, as part of its diversification strategy.

The proposed business licences will “refine our presence, reduce administration tasks and create more efficiencies to the business”, said Adam Ridgway, the founder and chief executive of One Moto, an electric bike-maker in Dubai.

“I love being a part of the tapestry of change in the UAE. The kaizen decision-making and leadership truly emulates progress and should encourage other global minds to realise the opportunities available in the UAE and hopefully they will be passed forward naturally.”