The United Arab Emirates (UAE) was recently ranked number one globally for the fourth consecutive year by the Global Entrepreneurship Monitor (GEM) report covering the last year, surpassing many advanced economies.
The study measured the quality of a country’s entrepreneurial environment based on expert assessments across 13 key ‘GEM Entrepreneurial Framework Conditions’. The UAE lead the Index with 11 of these conditions, ranking first among some economies, including the UK, the US, Saudi Arabia and Qatar.
The UAE outperformed in many areas including ease of access to funds and supportive government policies.
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While the report was published in February, the UAE government only took notice of it this month.
H.E. Alia Bint Abdulla Al Mazrouei, Minister of State for Entrepreneurship, said “our country has built a comprehensive and forward-thinking entrepreneurial ecosystem”, highlighting the country’s innovative financing solutions.
He added that the UAE wants to increase the success rate of entrepreneurs from 30% to 50% within the next decade.
According to the press release by the UAE government, GEM is recognised by international bodies such as the World Bank, the IMF, the Organisation for Economic Co-operation and Development (OECD) and several UN organisations.
Dubai’s free zones and incubators play major role
Hani Abuagla, senior market analyst at online investment platform XTB MENA, noted that as the country’s primary business hub, Dubai contributes to such rankings significantly through its comprehensive ecosystem that supports startups and SMEs.
He told Business Recorder that “the city offers a robust infrastructure through its numerous free zones” including the Dubai Multi Commodities Centre (DMCC), Dubai Internet City (DIC), and Dubai International Financial Centre (DIFC).
“These zones provide entrepreneurs with significant advantages such as 100% foreign ownership, zero corporate taxes, and streamlined business setup processes.”
Moreover, Dubai’s strategic initiatives such as the Dubai Economic Agenda 2033 and Dubai Future District Fund, actively boost entrepreneurial growth while the city’s various incubators and accelerators like In5, Dubai Future Accelerators, and DIFC FinTech Hive, provide crucial support to emerging businesses.
Abuagla also said major VC firms and government funding initiatives provide essential financial support to entrepreneurs, while the city’s goal to produce 20 unicorns by 2030 demonstrates its commitment to maintaining the UAE’s entrepreneurial leadership position.
“Its vibrant market in trade, tourism, and finance provides fertile ground for new ventures, cementing the UAE’s position as the world’s best destination for entrepreneurship.”
Nearly $9bn investment
According to the GEM report, the entrepreneurship ecosystem in the UAE is driven by supportive business and economic policies, strategic government initiatives, and a competitive investment climate.
A key factor is the country’s investment of $8.7 billion under the “Project of the 50” initiative, aimed at fostering innovation and the growth of SMEs. This, along with the country allowing 100 per cent foreign ownership of businesses and record-breaking foreign direct investment inflows in 2023, continues to enhance the UAE’s position as a hub for entrepreneurs.
The report highlighted that the entrepreneurship culture in the UAE is marked by a high level of awareness and ambition among its people: around 67 per cent of adults either know an entrepreneur or believe they have the necessary skills to start a business.
Additionally, 70 per cent see strong opportunities for launching a business locally, while 78 per cent of new entrepreneurs prioritise social and environmental impact over profitability.
Meanwhile, 75 per cent of early-stage entrepreneurs plan to expand their teams, intending to hire at least six employees in the next five years.
The report also revealed that 80 per cent of entrepreneurs plan to integrate technology into their business operations, and 78 per cent of new entrepreneurs are eager to build significant wealth or earn a high income.
Moreover, 55 per cent of UAE entrepreneurs cater to clients outside the UAE market, reinforcing the country’s position as a global business and investment hub.
Challenges remain
Dubai-based Pakistani entrepreneur Zohare Haider believes access to funding is still a big challenge.
“There’s a lot of capital available, but it’s not always available to smaller businesses,” he told Business Recorder.
According to him, most lenders require SMEs to have minimum AED 2 million annual turnover to qualify for loans, which he says can be difficult.
However, the founder of several startups including a digital agency and a restaurant information aggregator, is optimistic. He notes that a lot of “ecosystem entities have started to come up, like Hub71 in Abu Dhabi, that is providing capital, and they’re really taking in a large amount of startups.”
Their popularity shows how much demand exists for access to capital, but also for such ‘ecosystems’.
“There’s communities like 24six9, which I’m a founding member of, that are providing an environment for people to come and collect their knowledge and experience and share and support one another,” he said.
“Over the last 10 years, I can tell you from a first-hand perspective, the UAE has evolved tremendously, aggressively fast, developing policies and regulations to make it easier for people to set up companies.”
He went as far as to say that “the way the UAE has fostered innovation by creating an environment for anyone at any stage of their journey to be able to come and build a business is quite remarkable.”
“I think the UAE is definitely one of the best places to do business,” he concluded.
Copyright Business Recorder, 2025
