UAE remains preferred location for SMEs as number of new registered companies increase by 30%

▸ Technology, healthcare and education emerge as top priority sectors for SME investors according to a new report


Dubai, United Arab Emirates, 24 September – A new report published today highlights the enduring appeal of the UAE to small and medium-sized enterprises (SMEs) and business start-ups.

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The report by Diligencia, Gulf Capital and MEED reveals that the number of small and medium-sized enterprises (SME) entering the UAE has grown by 30 per cent over the past decade.

It says that the rise in SMEs in the UAE is being driven by the introduction of new policies designed to boost private sector growth, such as allowing for 100 per cent foreign ownership of limited liability companies (LLCs) in certain sectors.

The report says that SME growth is particularly strong in the technology, healthcare and education sectors.

The development of non-oil sectors is a key objective of the UAE’s strategic development vision to diversify the economy away from oil dependency,

According to the Ministry of Economy, SMEs account for about 94 per cent of all companies operating in the UAE and they employ about 86 per cent of the country’s private sector’s workforce.

The report by Diligencia, Gulf capital and MEED highlights the leading role played by Dubai in providing the required business environment and economic infrastructure to support new companies.

It reports that an average of 1,000 new company licences were registered every year in Dubai from 2015 to 2018.

“With the UAE aiming to provide a robust environment for the SME sector to flourish, new and innovative companies continue to enter the market and use the UAE as a base for their regional operations. Despite the softening of the economic market in recent years, existing companies have shown resilience,” said Dr Karim El Solh, CEO of Gulf Capital.

“At Gulf Capital, we are continuously monitoring the investment landscape and identifying which sectors are growing at the fastest rate. Our findings suggest that innovation, technology, health, education and business services are the most promising sectors where SMEs will flourish the most,” he added.

SMEs from the 2018 generation have entered the technology, healthcare and education sectors in an apparent move to diversify away from the oil and gas sector.

With the UAE aiming to be at the forefront of innovation, the technology sector in particular has witnessed the highest growth in SMEs since 2015, from 11% to 47% during 2018.

The healthcare industry has grown consistently over the last 10 years with a significant peak in 2018. 51% of the new SMEs preferred Abu Dhabi as the location during 2015-2018, followed by Dubai housing 48% of SMEs in the sector.

The growth is attributed to pharmaceutical and biotechnology start-ups in particular, which continue to drive innovation in the delivery of healthcare services. In addition, SMEs in the pharmaceutical sector are expected to grow rapidly as the UAE cabinet now introduces 100% foreign ownership.

New companies have been active in driving the education sector across the UAE as the number of SMEs registered during 2014-2018 increased by 55%. Private investors have selected key focus areas in terms of educational real estate, public sector foundations enhancing youth facilities, and investing in initiatives that highlight career paths for the younger generations.

“Over the past decade, we have witnessed spectacular growth of the SME sector in the UAE,” says MEED editorial director Richard Thompson. ”SMEs account for more than 90 per cent of all businesses in the UAE. They are a key driver of growth and are the backbone of the country’s economic vision. The government is putting enormous efforts into supporting the development of the SME sector because it understands the importance of SMEs to the UAE.”

“MEED is proud to be able to support the UAE’s SME sector,” says Thompson. “And we are delighted to be a part of an initiative that recognises and celebrates the best achievements by SMEs in the UAE, and which supports the development of new companies entering the market.”

The data from the report has shown an overall landscape of the majority of SMEs established between 2016 and 2018, and those that have survived the competitive market and continue to thrive.

Gulf Capital and MEED will be hosting the Gulf Capital SME Awards to recognise the achievements of SMEs on the 25th of September. For further information, please visit

Editorial Staff
Editorial Staff

The Editorial Staff at LAFFAZ encompasses fandoms of startup culture, crazy researchers, data analysts and writers who decrypt strenuous information into graspable news, produce noteworthy features and compelling stories.

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