Dubai Startup Hub Releases Report Tackling Banking Challenges For UAE Startups
Over the past decades, the UAE has cemented its position as the major financial hub of the Middle East. With numerous locally established banks and branches of foreign banks offering commercial banking services in the UAE, the range of banking services on offer is plentiful and competitive. That, coupled with the country’s excellent infrastructure, safe-haven status, business-friendly economy and sound regulation, make it the ideal place for businesses to setup and flourish.
But entrepreneurs often tell a different story when it comes to banking in the UAE. Despite the number of options, for startups, the banking experience can be rather challenging and laborious. It is with this pain point in mind that Dubai Startup Hub (DSH), the entrepreneurship arm of Dubai Chamber of Commerce and Industry, as part of its advocacy efforts to address entrepreneurial challenges in the UAE, has released a whitepaper report looking into the current relationship between banks and entrepreneurs- and how it could be made better.
Through this new report, Dubai Startup Hub, in partnership with global consulting firm Roland Berger, is shedding light on entrepreneurs’ challenges with banking services and in particular, the obstacles to opening a bank account. For instance, the initiative recognizes that being a startup is “difficult enough”, and therefore it is “obvious” that there is significant room for improvement, calling for dialogue and support from different key stakeholders including banks, the Central Bank and entities issuing trade licenses, among others, to drive best practices.
The whitepaper also cautions that not addressing the concerns risks a situation where startups might choose other locations over the UAE, a move that could ultimately jeopardize the country’s image as a global business and innovation hub. Proposed recommendations include developing partnerships between free zones and banks to offer a one-stop solution for trade license and bank account. More transparency and guidance on process and document requirements is also high on the agenda, as well as leveraging technology for a better and more cost-efficient process.
It’s no surprise that the UAE ranks 21st globally and is consecutively among top of Arab countries in the World Bank’s Ease of Doing Business 2018 report. In terms of setting up a company, there is no other destination in the region that offers a choice between 45 existing free zones, of which 30 are in Dubai, and another 10 under construction, and business ownership structures that permit 100 percent foreign ownership without any corporate taxes or import and export duties.
But having an operational bank account is a fundamental prerequisite for running a business, and entrepreneurs need more and better support to ease the current painful processes they often encounter. Promoting the UAE’s startup and SME landscape plays a vital role in supporting the nation’s journey to achieve global leadership in driving innovation.
To support this vision, the whitepaper recommends that the UAE should aim to become a global case study for best practices when it comes to opening startup bank accounts: “simple, transparent, and fast, while meeting compliance needs”.
This is the first whitepaper in a new series by Dubai Startup Hub focused on entrepreneurship advocacy topics, which will be published on a regular basis. Read and download the full report in English | in Arabic.