SMEs contribute 60% of the UAE's GDP, creating more job opportunities for Finance Professionals.
- Written on 28th January, 2023
- Updated on 8th February, 2023 10:33 AM
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As of mid-2020, there were over 350,000 SMEs in the UAE, employing 86% of the labour force. With corporate tax coming in, there would be a huge talent shortage of finance professionals in the UAE.
- SMEs account for around 60% of the UAE’s current GDP.
- As of mid-2020, there were over 350,000 SMEs employing 86% of the labour force.
- And now with corporate tax coming in, there would be a demand for Finance Professionals in the UAE.
Why SMEs are important to the UAE economy
Small and medium-sized enterprises (SMEs) are deemed critical for the financial diversification and growth of the UAE.
Their role has grown in importance as the country continues to establish itself as the world's top entrepreneurial ecosystem. They are certainly the backbone of the United Arab Emirates, hence they receive special attention from the government.
According to the Ministry of Economy, the SME sector accounts for more than 94% of all companies in the country. They employ more than 86% of the private sector's workforce.
In Dubai alone, SMEs account for nearly 95% of all businesses, employing 42% of the workforce and contributing roughly 40% of Dubai's GDP.
The UAE government is taking an active role in creating initiatives and programmes to assist with funding sources for SMEs. Some of the initiatives are Mohammed Bin Rashid Establishment for SME Development and Khalifa Fund.
As of mid-2020, there were 350,000 SMEs in the UAE, representing over 94% of all companies operating in the country;
- 73 per cent operated in the wholesale and retail sector
- 16 per cent in the services sector
- 11 per cent in the industry sector
The SMEs employed over 86% of the labour force in the private sector and made up over 60% of the GDP.
The UAE Ministry of Economy has launched an updated programme to assist the country in reaching its goal of ranking first in the world in terms of entrepreneurship.
It aims to develop more than 8,000 small and medium enterprises and start-ups by 2030.
But why are so many businesses and startups emerging in the UAE?
Dubai’s Thriving Economy: UAE’s cutting-edge infrastructure, superior connectivity, incubators, and investors help entrepreneurs grow.
Favourable Tax Environment: The economy of the UAE is regarded as one of the most diverse in the Middle East and North Africa region. Except for branches of foreign banks, hotels, and oil and gas corporations headquartered in the United States, most businesses in Dubai are tax-free.
However, the new corporate tax is going to be effective from June 2023.
Infrastructure: Dubai International Airport (DXB) is one of the best public transportation systems in the world, serving over 100 airlines and 260 destinations worldwide.
It is the largest airport in the region. UAE’s Jebel Ali Port is the biggest and busiest port in the Middle East.
UAE Free Zones: There are economic zones scattered throughout the country where businesses won’t have to pay any customs duty on imported goods. They are a catalyst for the country’s economic boom.
There's no need to be concerned about the logistics of international shipments arriving or departing.
SMEs cover almost every industry, from petrochemicals to legal entities, packaging, and healthcare. This is directly proportional to employment generation.
With corporate tax coming in, owners of SMEs would not want to get into complex situations. That is what would create a demand for finance professionals such as CA or CFOs. They would help companies be compliant with the law.
Check out this video to understand why SMEs are “critical” to UAE’s growth.
FAQ:
Q. How many SMEs are in the Middle East?
The majority of enterprises in MENA are MSMEs, estimated at 23-19 million (formal and informal) in number and comprising 90-80% of total businesses in most countries.
Q. What are SMEs in UAE?
Small and Medium Enterprises (SMEs) Small and Medium Enterprises (SMEs) get special focus from the UAE Government as they are considered vital for economic diversification and growth and because they help build national human resources.
Q. How many SMEs are there in GCC?
With around 1.5 million SMEs now registered in the GCC, the sector has the potential to produce 22 million jobs. It can contribute a considerable percentage of yearly GDPs for several of the region's countries by 2022.
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