High-flyers have long been setting up businesses on the shores of the UAE and this trend is far from slowing down. However, although the country is known for attracting highly ambitious entrepreneurs from all corners of the world and from various walks of life, right now, it’s attracting a whole new set of burgeoning businesses, with the technology sector, in particular, gaining traction.
“Emerging UAE businesses are predominantly centred around innovative technology sectors, with a significant focus on artificial intelligence (AI), blockchain, and fintech. Notably, AI is the leading trend, garnering substantial interest and investment,” says Mahima Sharma, Managing Partner, Smart Zone.
The prevailing trends encompass tech start-ups, cryptocurrency ventures, sustainability and eco-friendly initiatives, as well as the booming e-commerce sector. Additionally, the integration of virtual reality (VR) and augmented reality (AR) has gained prominence, representing the future of hybrid businesses, Sharma says.
With AI, fintech and cryptocurrency, this surge of interest in newer business models could partly be due to how the UAE business landscape adapts to global trends.
Mohammed Firoz Khan, Director of Business Development and Strategic Alliances, A&A Associate, says, “The UAE has been evolving its approach to attract industries and businesses, adapting to global trends and changes in the economic landscape. The country has shown increasing interest in cryptocurrencies and blockchain technology. Dubai has set up the Virtual Asset Regulatory Authority (Vara) as the world’s first independent regulator for virtual assets. As a result, there is an influx of demand and queries related to cryptocurrency licences in the UAE.”
Such is the demand in this sector that business consultants are gearing up towards specialised assistance for start-ups in these areas.
“In recent years, we have definitely seen accelerated growth in the technology sector, particularly in activities related to Web3, blockchain, crypto and fintech,” says George Hojeige, CEO of Virtugroup. “Recognising that these start-ups and their activities require specialised
market knowledge, we have established VZX, a Virtuzone entity that focuses on providing corporate structuring advice and licensing services to companies engaged in activities such as crypto trading, NFTs, AI, metaverse and software development.”
Digital marketplaces have witnessed huge growth in the UAE and Hojeige suggests that e-commerce is one of the fastest-growing economic sectors in the UAE, with revenues expected to reach $10.2 billion (Dh37.4 billion) this year. “Anticipating this market trend, we have previously launched AMP, Mena’s first e-commerce accelerator programme, to help e-commerce start-ups get ahead in this highly competitive market.”
With e-commerce booming, perhaps it is not surprising that business consultants are receiving a barrage of enquiries about such potential businesses.
Kallol Ghose, General Manager of SRTIP Accelerator, says, “We are experiencing a surge in enquiries for e-commerce and information technology consultancy. These business segments have seen substantial demand since the onset of Covid-19. The online business sector is flourishing in the UAE, with numerous start-ups achieving unicorn status within a few years. At SRTIP Accelerator, we play a pivotal role in assisting and supporting these start-ups to accelerate their business growth.”
Despite a number of such companies already setting up here, it seems there is still room for more.
“The UAE is a dynamic and rapidly evolving business environment with numerous opportunities for entrepreneurs. Some business opportunities that are prominent in the UAE are technology and innovation, tourism and hospitality, real estate, logistics and transportation, education and training, sustainability and green initiatives, fintech and cryptocurrency among others,” says Firoz Khan from A&A Associate, adding, “According to the Dubai Statistics Centre’s recent data, the emirate’s population grew by 86,607 within a year and its population will double by 2040. This growth will create a huge demand. The market is not saturated; there is still room for growth in the UAE.”
Rising demand for green ventures
In an ever-changing world, it isn’t easy to predict what business models could become the next success story. However, as sustainable solutions become increasingly in demand globally, this could be one area that sees further growth. “Dubai, in particular, is actively striving to become an eco-conscious city by encouraging the establishment of sustainable and forward-thinking businesses,” says Sharma from Smart Zone. “This commitment is evident through various green initiatives, the promotion of renewable energy sources, and the adoption of sustainable practices across diverse industries. Prominent examples include the Dubai Clean Energy Strategy 2050 and the Dubai Green Economy Partnership, demonstrating the city’s dedication to fostering a greener and more sustainable future.”
Nevertheless, whether it is a sustainable enterprise or a tech company, starting a new business is not always easy, and it can be especially challenging when venturing into a nascent sector.
Overcoming the common challenges
“Starting a new business comes with its own complexities. There are many aspects the entrepreneur must look into before venturing into a business in any sector. Key factors to consider are the business activity, company structure, office space requirements, the addressable market, competition, product feasibility, logistics support requirements, storage of products, service delivery, legal documentation, and more,” suggests Syam P Prabhu, Founder and Managing Director, Aurion.
“Additionally, when it is a niche or specific sector, the business journey could be further more challenging due to specific business requirements. For start-ups and entrepreneurs looking at emerging sectors such as sustainable manufacturing and advanced technology, they must consult an expert business consultant,” he says.
Indeed, since many of these businesses are treading on relatively new territory, for anyone considering a start-up, the correct legal framework must be set up with the assistance of a business consultant to ensure success.
“We have noticed a significant surge in business set-ups across the UAE particularly in AI, renewable energy and fintech sectors. Our decades of experience allows us to provide specialised, sniper-focused solutions to these sectors,” says Steven Charles Wilson, Business Consultant at Axiom Mark.
“These sectors are regulated by competent authorities and require a distinctive and sustainable business approach. Right from providing business set-up solutions like furnishing appropriate regulatory framework, recommending the right licence type, visa assistance to protecting their brand through IP registration services, we do it all.”
Starting a business off on the right foot could certainly contribute to the number of new formations that are witnessing success. Moreover, since the UAE is adaptable and welcoming to these new business trends, it is considered to be the ideal landscape for these industries to prosper. An added benefit includes the myriad initiatives that are on offer, making the nation an attractive location. Last year, the announcement of a $100-million venture capital fund set to assist entrepreneurs, was undoubtedly a welcome news.
Ghose, from SRTIP Accelerator, explains, “The UAE attracts entrepreneurs seeking new ventures by offering investor-friendly regulations, 100 per cent foreign ownership, access to a diverse market, ease of doing business, long-term visas, a supportive entrepreneurial ecosystem, access to capital, innovation initiatives, strategic infrastructure, a diverse and multicultural environment, investment incentives, and global events and expos, making it an ideal destination for start-ups and businesses to thrive.”
Therefore, with so much on offer, it looks like we will certainly witness many more forward-thinking business leaders setting up in the UAE for the foreseeable future.