Investors repose trust in UAE's economic resilience
Analysts and economists termed the rise in business licence last month as a positive economic indicator.
Dubai - Rise in business licences indicates early revival of economy after coronavirus
The UAE economy has once again proved its resilience, showing an early sign of recovery by posting a nominal growth of 0.64 per cent in business licences last month, latest data shows.
The total number of business licences issued across the country in June reached 652,885, a rise of 4,201 compared to 648,684 in May, according to statistics from the National Economic Registry of the Ministry of Economy.
This rise reflects the continuity of business and trade in the UAE, following a stable period in March and April despite strict restrictions on movement to contain coronavirus in the country.
Analysts and economists termed the rise in business licence last month as a positive economic indicator and said it reflected investors' trust in the UAE economy.
Atik Munshi, senior partner at Crowe UAE, said the nation is one of the few countries that is highly proactive even for government decisions.
"The apt action taken by the government to tackle the Covid-19 threat and further reopening of the economy on a timely basis has triggered the confidence building in the business community. Most businesses are now not only reopened, they are consolidating efforts to gain back the lost ground which they faced in March - April of this year," Munshi told Khaleej Times.
The statistics also show that the number of registered licences in Abu Dhabi, Dubai and Sharjah amounted to 530,165, accounting for 81.2 per cent of the total licences in the UAE.
"The UAE is among the first nations that reopened for business after containing the coronavirus outbreak through a successful strategy. Investors have once again reposed trust in the government policies and made their intentions clear as far as continuity of trade and businesses in the UAE are concerned," said Shailesh Dash, board member of Allied Investment Partners.
He said the coronavirus pandemic is an event that has created unprecedented social and economic encounters. The challenges have been enormous and systemic shifts are being witnessed across industries.
"With our world now transforming faster than ever, there are enormous opportunities to be seized. Organisations that are slow in making changes will fall behind, while the ones that can swiftly adapt to the changing market needs will flourish," Dash said.
Latest data showed that Dubai remained a top choice of investors who are willing to establish base in the emirate to expand their reach in the international and regional markets. The number of business licences issued in Dubai reached at 300,000 at the end of June, representing around 46 per cent of the total.
"Dubai has emerged an international business hub and the latest data reflected trust of investors in consistent government policies, conducive business environment and strong economic base," Dash said.
In Abu Dhabi, licences registered in June totalled 145,660, accounting for 22.3 per cent of the total while in Sharjah, this figure amounted to 84,505, accounting for 13 per cent. The rest of the licences were distributed between Umm Al Quwain, Ajman, Fujairah and Ras Al Khaimah.
The statistics also highlighted the fact that sole traders accounted for around 41 per cent of the total issued licences, and limited liability companies accounted for 38 per cent, and other legal forms of companies accounted for the rest. "We have identified 10 sunrise sectors that will flourish in the post-pandemic period," Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, told Khaleej Times.
"Since movement restrictions began we have seen big surge in instant licences more particularly enquiries of e-commerce, healthcare, essential items delivery business, EdTech Business [e-learning], IT business, antiseptics and disinfectants, fintech companies, food and grocery business, marketing and advertisement industry and freelancing industry," he said.
The National Economic Registry is a federal e-platform which is part of the UAE Government Accelerators Initiatives launched by the Ministry of Economy, with the aim of adopting the tools of a knowledge-based economy by providing accurate, comprehensive and immediate information.
"With the opening of the aviation over the next few months it is expected that residents stranded abroad will be able to return back to the UAE. Such increase in consumers will have a positive impact," Munshi of Crowe UAE said.
"Other countries around the world are also gradually reopening which too is expected to boost the Dubai transshipment business. Since tourism is expected be on track by the end of the year and since businesses are very keen to come back on track I expect that both second half of 2020 and 2021 would see decent figures of growth," Munshi concluded.