Looking To The Future As the UAE Cabinet announces its largest-ever Federal Budget, Servcorp is ready to empower the nation's entrepreneurs.

In the same way as the visionary economies of Singapore, China and South Korea, the UAE has clearly crystallised its future vision for the nation's economic growth. The Abu Dhabi Vision 2030 and the Dubai Industrial Strategy 2030 are already creating a diverse, forward-thinking platform for expansion, and the contents of the celebrated UAE Vision 2021 blueprint have already been generating powerful infrastructure initiatives for half a decade. Yet, in a country already ranked 21st in the World Bank's Ease of Doing Business Report, few would have predicted the dramatic announcement by the UAE Cabinet - on September 30th - of the largest-ever Federal Budget. This explained that the fiscal year of 2019 will have a budget of no less than Dh60.3 billion - an increase of 17.3 per cent from this year's Dh51.4bn.

This is quite simply the largest federal budget in the country's history, and takes a notably citizen-first approach, in which Social Development programmes receive Dh25.5bn (42.3 per cent of the 2019 budget), Education will receive Dh10.25bn (17 per cent), and the Healthcare sector will receive Dh4.40bn (7.3 per cent). In addition, in the Cabinet session Chaired by HH Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, a budget of no less than Dh180bn for 2019-2021 was also approved.

Striking in themselves, these announcements are actually the culmination of a series of bulletins from the Government in 2018, spanning fiscal and procedural issues, and aimed at helping both individuals and businesses alike. Many of the proposed changes and reforms benefit the SME sector in particular, introducing as they do factors helpful to businesses with limited cashflow and giving fresh routes to staff retention and business ownership.

When discussing the September 30th budget announcements, HH Sheikh Mohammed explained that "The citizen is our top priority" and this is very much a theme apparent throughout the series of reforms in the first nine months of 2018.

The quest for a visa

One of the areas that has seen the most dramatic change is the new scope offered by selected categories of visa. Visa regulations can either be a limiting or an empowering force when it comes to the ability of a business to attract and keep good quality staff - and here, the news has been overwhelmingly positive.

For example, on May 20th, 2018, the UAE Government announced the arrival of a new 10-year visa for investors and professionals in medical, scientific, research and technical fields (along with their families). This dramatic step was allied to the further announcement in the same month of a five-year residency visa for students - and a 10-year option for students proven to be outstanding in academia, sport or special skills. What is perhaps most significant here is the direct planning for the future talent pool - and the vision of what a strong student culture can go on to deliver to the nation's economy in the medium term.

The greater flexibility and confidence this gives to professionals was mirrored company-side with a cluster of highly significant reforms. For example, as of June 13th, 2018, companies no longer have to pay AED3,000 deposit when recruiting a new employee. Instead, they pay only AED60 for an annual insurance policy for the employee, which will cover end of service benefits, vacation allowance, return tickets and also redeem up to AED20,000 of insurance cover per worker. They also have a better chance of finding staff with the right professional fit, since at the same time, job seekers were granted the bonus of a six-month visa without fees, and for those changing jobs, any alteration in visa status can be handled without having to exit the country. A considerable change which makes life for employee and employer alike a good deal simpler, faster and more affordable.

A major sea-change:100% foreign ownership

One of the reforms set to have the most long-lasting impact on the nation's business culture was the announcement by the UAE Federal Government on May 20th, that it would start to relax company ownership rules and allow 100% foreign ownership. This scenario, only previously possible within a free zone, can now offer many advantages to 'onshore' licensees - especially to reputable international businesses who may previously have been deterred by the thought of surrendering ownership of a new regional branch to a local partner. It can also be a catalyst for driving entrepreneurship back into the onshore sector, with its traditional advantage of being able to market direct to the public (unlike a free zone-registered business, which technically can only market outside the free zone through an onshore entity).

Reducing office and infrastructure cost

There is also another area where forthcoming changes will hugely benefit Dubai's entrepreneurs. Start-up businesses need to observe the Regulations for Registration set out by the Department of Economic Development (DED), and these have typically required a minimum office space of 200 sq.ft. Yet now, the DED have stated that we will shortly see the launch of ground-breaking new regulations, proposing a dramatic reduction to the physical space required per licence. Downsizing the minimum office space required for business registration is a move of great importance to Dubai's entrepreneurs, reducing costs and removing a key hurdle to business set-up.

Benefit from the changes - Flexible Working is the Catalyst

Given these reforms, how can companies best convert the new, advantageous climate for business into a cost-effective working model? What is the catalyst that can play a key role in delivering the Government's vision for the role of the SME?

One of the key factors that can all too easily constrain a business in its early days is the cost of office set-up. Reducing costs and fast-tracking operational readiness is an important way of bringing aspirational SMEs to market - and thereby hastening the vision of a powerful, effective ecosystem. A key approach for achieving this is Flexible Working, which has undoubted commercial benefits.

Worldwide, Flexible Working is a key factor in the working practices favoured by a new generation of millennials, start-ups and innovative/creative entrepreneurs. In fact, the vibrant growth of the Flexible Working phenomenon is a headline success story of global business: by 2017, the number of flexible workspaces internationally had reached 15,500 - a staggering rise from the 2011 figure of just over 1,100. By the end of 2018, the figure looks set to rise to 18,900.

Currently, there are estimated to be approximately 1.3 million people working in flexible workspaces globally. According to property and investment titan Jones Lang Lasalle, by 2030, up to 30% of all office space will be, in some form, flexible, or have an open layout design.

Servcorp is playing an organic role in building the profile of Flexible Working in the UAE.

The unique Coworking spaces created by Servcorp allow small and medium businesses to benefit from all the advantages of a prestigious address, landing phone numbers and office support, without committing to dedicated office space. The reality is that Servcorp has invested more than $100 million in IT and telecoms to ensure clients receive the best service possible. Plus, as a specialist in Flexible Workspace solutions, Servcorp can meet the needs of many styles of business, regardless of sector or specialisation.

In the UAE, Servcorp is committed to educating the market about the powerful advantages accrued from Flexible Working- and to this end, has launched a number of leading-edge, Flexible Workspace solutions. These include:

Abu Dhabi

Recently-launched, a superb Flexible Working facility in the Al Mamoura Complex. Further Coworking space is soon to be opened in two prestigious locations - Level 17, World Trade Centre and Level 36, Etihad Towers.

Dubai

Level 41, Emirates Towers, a facility offering comprehensive flexible workspace solutions in a prime location and providing a core template for future Coworking space in Dubai.

Level 54, Almas Tower. At the epicentre of the DMCC free zone itself, offering the best possible strategic, transport and commercial advantages: Not only does this location offer exceptional co-working environments, but Servcorp's registration desk service can even carry out the seamless, end-to-end registration and licensing of a business with DMCC.

Delivering solutions

With 15 years' experience in the UAE, listening to leading industry voices and building a dialogue with the DED, Laudy Lahdo, General Manager, Servcorp Middle East, explains: "We are extremely excited by the UAE Cabinet's announcement of the largest ever Federal Budget, and the very positive impact it promises for the UAE economy. Indeed, the reforms announced by the Government and the DED over the last nine months are committed to creating a culture that makes business easier, more dynamic and a good deal more affordable. With its world-class experience across key markets, Servcorp is well-placed to give businesses exactly the right platform for ensuring they benefit from this new climate. So often, office set-up and facilitation can be a major cost factor, but the solutions that we offer for Flexible Work Spaces and Coworking are game-changers, removing the hindrances to good business and fully aligned with the letter and spirit of the new raft of legislation. We invite all entrepreneurs to discover more about the solutions on offer: this is most definitely the right time to plan for a very positive future."

Related: Change-Maker: How Servcorp Is Empowering Abu Dhabi's Economic Vision