The cost of establishing small companies in the Emirates is high

A recent economic report said that “the costs of establishing companies in the Emirates are high compared to the countries of the world,” noting that support for small companies is the basis for a stable and growing economy in the Emirates. The report, prepared by “Al-Tharaa Holding Company”, stated that “the economies of developed countries are based mainly on small and medium business sectors, which represent about 60{77486d9119e5be11b51ba1bf2083cb42adb34355d1614e8815c79db902641e13} of the national product of these countries and employ about 80{77486d9119e5be11b51ba1bf2083cb42adb34355d1614e8815c79db902641e13} of the population,” pointing to the unlimited support provided by those Economies for SMEs due to their role in the sustainable economy and job creation.

Investment promotion

The report stated that “most Arab countries see medium and small companies as a burden on the economy, and that any support for these institutions is based on social responsibility and charitable work, and not from being a cornerstone of the economy.”

He said that «Canada, for example, is one of the most encouraging countries in the world for small projects, where it is possible to register a services company within an hour, at a cost that does not exceed what is equivalent to 350 dirhams, and that the costs of registering the company and renting the office and accommodations for five employees throughout the year amount to 350 dirhams also He pointed out that “Canada also allows business owners to work from home without the need to rent an office.”

“The United States also supports small projects, and there are American giant companies that started from home such as (Microsoft), (Apple), (Google) and (Facebook).” He stated that «the procedures for establishing and licensing small companies in Dubai, which is the most Arab city in support of small businesses, take at least a week, and that the costs of registration and office rent (mandatory) are high, in addition to the high costs of hiring employees and residence visas.

200 thousand companies

“The support that small and medium-sized companies receive in the Arab countries is limited despite the presence of some initiatives,” Tariq Ramadan, chairman of the Board of Directors, “Tariq Ramadan,” told Emirates Today, adding that “According to government data, there are 260 thousand companies in the UAE “200,000 of them are classified as small or medium.”

He stressed that «the Ministry of Economy, and the Economic Development Departments presented several initiatives and measures that supported small companies, including reducing the capital required to establish companies, and establishing specialized bodies to support small companies», calling for more measures that encourage the growth of small business businesses, including «reduce fees Establishment and annual renewal imposed by the development departments, shortening the time of registration, not requiring renting an office, paying the rent or part of it before obtaining the license ».


To that, the report presented the most important challenges facing small companies, which are represented in the «need of foreign investors to a service agent at a cost of 5000 to 10 thousand dirhams, and that the company that wants to be present in all emirates of the country needs to repeat the establishment and other expenses seven times, and bear The cost is seven times. ”

He pointed out that “the need for a foreign investor to appoint a service agent or enter a local partner on the basis of 51{77486d9119e5be11b51ba1bf2083cb42adb34355d1614e8815c79db902641e13} – 49{77486d9119e5be11b51ba1bf2083cb42adb34355d1614e8815c79db902641e13} constitutes a major obstacle for foreign investors, as the investor is forced to enter a citizen partner without the need for it, and loses control of his company and sacrifices half of his profits.” Until “obtaining a work visa for every employee takes at least a week, while residency work needs more than two weeks.”

He pointed out that “the large increase in the costs of residency procedures for expatriate employees, and the high costs of registration and licensing in the free zones, as well as the obligation of those areas to require the investor to rent a separate office for each license, even if he has four licenses in the same area, all of them constitute additional obstacles.”

Lower fees

Al-Tharaa Holding report emphasized the importance of reducing the fees for registering new companies and renewing their licenses, allowing the installment of those fees, and allowing multiple activities in one license. He pointed out the importance of unifying the registration and licensing of companies in the seven emirates while allowing the practice of their activities in the state, reducing residence fees for new companies, fees for cases submitted by small and medium companies, reactivating lending and support operations for small companies, reviewing the conditions for providing facilities and financing, and the interest rate on loans.

The judicial system

The report said that «the judicial and legal system in the Emirates is one of the most important pillars of its economy, but it does not take into account the needs of small and medium companies, whether in terms of high litigation fees or slow procedures, which may be a reason for bankruptcy of companies due to their inability to restore their financial rights in Appropriate time”.

He explained that «the economic crisis imposed limited funding and bank facilities provided on impossible terms and high rates of profits and benefits, and that there is a problem in the lack of government support for small projects’ loans.

He stated that «the cost of marketing the services and products of small and medium companies represented in the advertising campaigns is very expensive and constitutes a great barrier to the continuity of these companies».

Shopping Center

Ramadan said that “small and medium-sized companies in the UAE, especially local brands, face a problem in establishing stores in major commercial centers, where some of these centers raise the rental value (of the same area) to small companies compared to large companies.”

The report called for a unified classification for small companies and medium-sized companies according to which these companies obtain the support allocated to their category, whether it is government support or from government departments or banks or the media and others; it also called for the establishment of specialized centers to support creativity and provide free consultations for small companies, and discussed providing Means of legal support for small companies, and assisting them in marketing their products and services outside the country.


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