The UAE has become a major financial and economic hub for the Middle East, Africa, and South Asia. It attracts visitors and investors, ex-pats from all over the world. What is the key to success in this thriving market and what are the top business opportunities you could get into to succeed in this market?
Is there any chance for you to become successful as an entrepreneur and investor in the country? If yes, what are the industries which are growing fast in the country, and how you could take advantage of the high growth prospects?
The UAE government has shown consistent resolve to diversify its oil-dependent economy and continues to take giant strides in its diversification agenda. It is working meticulously in rolling out plans to boost economic sectors especially healthcare, education, food & beverages, and logistics industries. And it is not only huddled on the drawing board, but it is also making visible efforts to lure in foreign investors, by working closely with institutions and implementing legislation that will help create a conducive investment environment.
Despite the challenges due to the COVID-19 pandemic, the Dubai Expo 2020 attracted a large number of investors and entrepreneurs from around the globe. The economic activities in the country boomed and it created around 270,000 new jobs during the period 2015–2021
we comb through some of the most popular businesses in the country and highlight what makes these sectors attractive to potential investors and entrepreneurs from other countries.
Related: Top 10 Halal Businesses You Can Start Right Now
According to Deloitte, although healthcare represented a small proportion of the UAE’s GDP in 2013 at 3.5%, it is expected that this share will rise during the period 2014-2018. It is estimated that overall healthcare spending will increase by 6.9% a year, from an estimated $14.0 billion in 2013 to $19.6 billion in 2018. PWC, in a recent survey on the healthcare sector, pointed out that new entrants and investors are poised to promote growth within the healthcare market by developing new products, services, and channels, particularly across the digital landscape.
The UAE government’s initiative to establish the country as a hub for medical tourism is evident from its ambitious strategic plans, commitment to quality standards, and substantial outlays. It has been encouraging foreign companies to support the growth of its healthcare industry through strategic tie-ups and collaborations. The UAE currently has the highest number of hospitals accredited by the Joint Commission International (JCI) in the MENA region.
In 2014, the private sector invested $66.4 million in the UAE healthcare sector, and two UAE-based hospitals made successful listings on the London Stock Exchange: Al Noor Hospitals with GBP1.15 billion, and NMC Healthcare with GBP940 million. H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, implemented a new law in 2014 requiring compulsory health insurance for all Dubai residents. In its 2015 budget, the government allocated 49% of its total planned expenditure to social development and social benefits, of which healthcare forms a significant component. Between 2004-13, the UAE was reported to be the largest recipient of private equity deals in the MENA healthcare sector, with deals valued at $453 million. Therefore, the UAE’s healthcare sector is set to expand, and it presents huge opportunities for both businesses and investors.
The UAE’s growing expatriate population and the government’s commitment to its social agenda are making the education sector (along with healthcare) one of the most popular investment sectors in the MENA region. As advisory firm Grant Thorton pointed out in a report, it’s mainly due to the emphasis on sectors like education (among others) that the UAE has been able to sustain its economy.
According to Al Masah Capital, the growing majority of expatriates in the UAE (which constitute 88.5% of its total population) is driving up the demand for private schools with international academic facilities, despite coming at high costs. It is estimated that in 2014, there were around 440 international schools in the UAE, a number that is said to have doubled since 2004. The demand for technical and vocational training in UAE is also on the rise, with airlines and telecom sectors driving this demand.
The government is especially focused on establishing higher education institutions, both locally and with foreign partnerships with world universities. In doing so, it created 2007 a special economic zone, the Dubai International Academic City (DIAC), to provide credit facilities and tax benefits to several institutions. Today it is the world’s largest free zone dedicated to higher education.
Rapid urbanization, a growing expatriate population both in terms of numbers and diversity, and a popular tourist destination make UAE of particular interest for its food and beverage (F&B) sector. KPMG estimates that the number of food and beverage outlets will increase by 1,600 by 2019.
The government is actively encouraging private companies to establish food storage and distribution facilities to support its ambition of establishing Dubai as an important hub for the re-export of food products to other parts of the Middle East and Africa. Dubai Chamber is playing an active role in realizing H.H. Sheikh Mohammed Bin Rashid Al Maktoum’s vision to establish Dubai as the center of the Islamic economy and create opportunities in the halal food industry.
Dubai expects to receive 20 million tourists during Dubai Expo in 2020. This is likely to have a tremendous impact on the country’s food and beverage sector, which will be requiring hefty investments to expand and support the growing demand.
Dubai has been established to become the most important trading hub in the region with logistics and infrastructure that allow seamless movement of goods and services. It is estimated that more than 4 billion people live within 8 hours of flight from Dubai covering major markets in Africa and Asia. Its status as a regional haven helps remain the preferred destination for global businesses entering the Middle East, Iran, and Africa.
Compared to other sectors, logistics remains the most intertwined with global trade and its performance is likely to co-move with a slowdown in world trade expected in 2016, albeit in the short to medium run only. However, the government’s commitment to improving infrastructure and legislation is likely to boost the sector and help sustain returns.
The UAE is committed to building world-class economic sectors as its engines of growth. The potential in each of its priority sectors will out-weight the challenges that it may have. For investors, these sectors are unique economic entities and are proving to be one of the most sound and stable investment avenues the region has to offer.
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