Entrepreneurs

Middle East needs to make it easier to launch startups

October 17, 2023, 1:25 PM

Middle East startups — Middle East countries are competing to attract startups, which can make it difficult for entrepreneurs to decide on a base

Middle East appeals as a whole region
Individual countries too fragmented
Competition for startups exists within UAE

The Middle East is a “very attractive” market for entrepreneurs but its fragmented nature is a barrier to entry, even as jurisdictions compete to attract international startups, executives said at an industry event in Dubai.

“None of the countries in the region are large enough or full enough to be an ecosystem on their own,” said Sharif El-Badawi, CEO of Dubai Future District Fund.

“In fact, as a region it’s sellable when you combine it all together. It’s very attractive.”

El-Badawi was speaking to delegates at Expand North Star. The dedicated startup fair, with more than 1,800 startups from 100 countries, is taking place this week at the tech event Gitex Global in Dubai.

Facing fragmentation

Set up in 2021, the AED1 billion ($272 million) Dubai Future District Fund was designed to support technology startups and encourage them to list on the Dubai Financial Markets stock exchange.

It is part of efforts to establish 1,000 tech companies in the UAE within five years and increase startup investments from AED1.5 billion to AED4 billion.

El-Badawi said one of the challenges international entrepreneurs face was the fragmented nature of the region.

“You have to establish entities in every country,” he said.

“Those entities come with visas and costs that are associated with that, and certain regulatory licensing. So that’s something the founders have to contend with, and it causes friction in an already almost impossible task of building a company.”

Internal competition

The UAE is often seen as a springboard into the wider Middle East region, but even within the seven emirates that make up the Gulf state, there is competition to attract entrepreneurs and startups.

Each emirate has its own competing ecosystem with its own distinct regulatory authorities for each sector.

Dubai and Abu Dhabi in particular have made significant strides in positioning themselves as global centres for business, innovation and investment.

Both have introduced unique initiatives to attract startups and entrepreneurs, such as incubators, grants and regulatory easing.

The Dubai Chamber of Digital Economy earlier this week launched the App Olympics, designed to accelerate Dubai’s goal to become the mobile app development capital of the world.

The competition is open to UAE nationals and residents of all ages from any emirate, as well as global tech startups interested in establishing a presence in Dubai.

Neighbouring Abu Dhabi’s global tech ecosystem Hub71 has revamped its incentives programme, offering startups up to AED750,000 in cash and in-kind incentives.

Hub71 will gain an ownership interest in startups selected to join its new Company Building Program, in which it offers comprehensive support packages.