Market for jobs may not be looking very bright but the expatriate population in the UAE refuses to give up and quite a few of them would consider setting up their own business in the next 12 months, a recent survey has revealed.
Their faith in the economy of this region is still intact and more than half of the expats surveyed believe that it is unlikely that they would lose their jobs and be made redundant.
The survey, carried out by market research company Real Opinions, was conducted between February 11 and 18 and covered people from Abu Dhabi, Dubai, Ras Al Khaimah, Sharjah, Fujairah and Ajman.
The cost of these ventures and how soon they are set up will be crucial. With limited budgets that expats are likely to have, it would be a challenge for the authorities to encourage them to set up businesses, said Healy.
"Expatriate entrepreneurs are likely to have limited budgets, so there is a challenge for not only expats but the UAE authorities too to facilitate this for the benefit of all. As many as 34 per cent of the respondents said they are likely to set up their own business and 43 per cent said they are unlikely to leave the UAE in the coming 12 months, which shows their faith in the economy," Dan Healy, CEO of Real Opinions, told Emirates Business.
Ease in setting up a business, less formalities and tax relief are the key advantages that give the UAE an edge above other countries.
"The potential for small businesses to thrive in the UAE is significant. Without corporation tax and other statutory paperwork required here, compared to Europe for example, allows entrepreneurs to concentrate on business rather than paperwork," said Healy.
Comfortable with the quality of life, the expats expressed high satisfaction with the same and their desire to continue living here.
In July last year, the Expat Explorer survey by HSBC had revealed that the UAE was among the top three preferred locations for expats due to the lifestyle and opportunities that it offered.
Anther survey by Zurich International Life (ZIL), at the beginning of this year, also revealed high confidence of the expat population in this region's ability to hold steady and pull through in 2009.
More than half of the people residing in the Emirates feel that things would get better in the coming 12 months even as people were spending lesser on their lifestyle – at least 25 per cent lower on luxuries.
Job security was a concern 70 per cent of the respondents had said they would sit it out. They showed their preference for this place which held better opportunities, the survey had revealed.
On a comparative basis too, expats find the UAE a better country, the Real Opinion survey said.
"For many expatriates, the economic situation and employment prospects back in their home countries are not better than the UAE," said Healy.
The optimism about their future was clearly reflected in the response wherein 70 per cent people said they were either slightly or highly optimistic about their future.
Fifty-nine per cent of the respondents included expats living in Dubai, of which 44 per cent were Asians.
The survey also studied the opinions related to employment prospects for the next 12 months. Over 37 per cent said they were unlikely to look for employment in another country, while 43 per cent said they were not likely to leave the country they are presently living in.
"These results were collected just prior to what appears to be a timely intervention by the UAE federal government's central bank purchasing a $10 billion (Dh36.7bn) bond issued by the Government of Dubai under a $20bn programme.
This should go some way in restoring job security for expatriate employees if the funds are used to re-invigorate organisations and projects, but there still exist some serious challenges and expatriates appear to be using this as a time to evaluate their options rather than to leave their fate to the decision of others," said Healy.
"For those who stand exposed to the risk of losing jobs, a large number might wait for their rental agreements or school sessions to end. The interim period will be crucial to seek alternative employment prospects in the UAE," he said.
Among the reasons frequently brought out by various surveys of expats wanting to continue living this region are their high satisfaction with safety, environment and quality of life. Over 60 per cent of the people expressed their satisfaction with "healthy and safe" environment.
"The largest share of expense for the most is accommodation. As many as 62 per cent said they were dissatisfied with the quality of accommodation for cost, while standard and quality of education too was a cause of discontent for many, the survey said.
"The percentage of income that goes towards paying accommodation is quite a significant amount. If you see the average income of certain groups and the quality of accommodation that is available, it's a big factor," said Healy.
"Retaining the expatriate population is important as they have a significant contribution towards the economy," he said.
Another alternative considered for more than one-third of expatriate population here in the coming 12 months is the idea of starting their own businesses.
"More small businesses would contribute to the non-oil GDP income of the economy and encouraging them would mean a boost to the economy as well.
"It would also mean more competitive industries and better services," said Healy. "We could actually see the emergence of a trend from large to smaller organisations. In fact it could be good for the economy and would be positive if encouraged."
Healy said: "The challenge will be for the UAE Government to ensure the right economic climate and ease of setting up a company… to entice entrepreneurial expatriates set up shops in the UAE and not in another country. The cost of the set-up and rent will be particularly acute for them and viable options will help in this process, together with the general cost of living."
Among the industries that hold a good potential for job creation are services and knowledge-based industries.
"The online industry too offers benefits in terms of cost effectiveness in setting up and reaching out to a wider number of customers. It provides access to a huge market base.
"The internet provides a viable business model for some small organisations, given the comparatively low set-up costs and ability to cost-effectively reach their potential customers or clients. In the UK, we are witnessing many high street stores closing and posting notices on their windows to say that it is business as usual on their online stores. While we may not see this happen to the same extent in the UAE, this appears to be a developing trend and also a potential entry point for the new entrepreneurs in the UAE."
Positive Outlook On Retirement
Expatriates were positive on their retirement plans and 55 per cent of those in the UAE said that they were confident of being able to retire at their ideal age. "One in five plan to stay in the region after they retire," the Zurich International Life (ZIL) survey had pointed out.
Changes in the jobs scenario notwithstanding, a large number of people are keen to continue living through self-employment. More than one-third of the respondents in the survey expressed their keenness on setting up their own business.
"We expect expatriate workers to follow where the investment money flows. If their present employer is unable to cope with the changes in the economy, the research results suggest that employees are taking up the challenge themselves by setting up their own companies, believing they are more flexible and adept to benefit from these changes and in turn increasing competition for certain industries. If left to market forces, we may witness the proliferation of small businesses."
However, the expats are not free of worries. Even though they prefer the UAE in comparison to other countries, 40 per cent said they may look for opportunities elsewhere and leave. The major concern that was highlighted was a high cost of living particularly housing expenses. According to the survey, 75 per cent said they were dissatisfied. This included 46 per cent who expressed high dis-satisfaction with the overall cost of living.