Dubai start-ups surge 45% as cost to launch business dips

If the global economic recession has had one positive side-effect, it is that the cost to start a new business has declined, boosting entrepreneurship across the world and indeed in the UAE and particularly in Dubai.

Data shows that the number of new companies registered in Dubai surged by 45 per cent in the first nine months of 2010. “The cost of starting business in Dubai has become more competitive and affordable, which has led to an increase in new businesses established during the first three quarters of 2010,” Hamad Buamim, Director-General of Dubai Chamber of Commerce & Industry (Dubai Chamber), told a packed news media gathering yesterday.

According to the Dubai Economic Development (DED) Department data shared by Buamim, the number of new companies established in Dubai during the first nine months of 2010 stood at 11,007, 45 per cent more than the 7,566 established in 2009.  “Most of these businesses are in the services sector,” Buamim added.

Moreover, he shared that the number of new members of Dubai Chamber increased by 20 per cent during the first 10 months of 2010, from 6,600 in 2009 to 7,927 by the end of October this year.

“Most of these companies are in the trade sector,” Buamin said, adding that that is where “the growth is in the Dubai economy.” He also revealed the total membership of Dubai Chamber stood at 220,000 members until the end of October 2010.

According to a presentation that Buamim made to global and local media persons yesterday, trade is playing an increasingly important role in Dubai’s economy, contributing 39 per cent to the emirate’s GDP in 2009 (2008: 38 per cent).

“Many people don’t understand the core business of Dubai, especially beyond the last few years,” Buamin said. “A look at Dubai’s GDP over the past decade shows that the services sector contributes a majority to its GDP,” he said, adding that during the period 2000 to 2008, the services sector contributed 71 per cent to the emirate’s GDP.

“What’s even more important is that trade contributed 33 per cent to the overall GDP on an average over these years, and has been the largest economic sector in Dubai for the period,” he said.

In the first eight months of 2010, Buamim said Dubai’s direct trade grew 18 per cent, from Dh320 billion in 2009 to Dh377bn by the end of August 2010. “What’s important is that the annual growth rates are highest in five years, which underlines a recovery in trade,” he said, adding that he expected this growth to continue in the future.