Complex Made Simple

Number of new registered companies increase by 30% in UAE

A new report published today highlights the enduring appeal of the UAE to small and medium-sized enterprises (SMEs) and business start-ups.

 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% 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% 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% of all companies operating in the UAE and they employ about 86 % 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.

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.

 Says MEED editorial director Richard Thompson: “The government is putting enormous efforts into supporting the development of the SME sector because it understands the importance of SMEs to the UAE.”

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 Capitalis one of the leading alternative asset management firms in the Middle East and currently manages over AED 11 billion ($3 billion) of assets across 8 funds and investment vehicles.

MEED is a senior management media brand, its flagship subscription products are the MEED Business Review publication and website. 

Diligencia is a specialist information services provider, focused on company data within emerging markets.