September’s Sharjah FDI Forum will zoom in on the importance of global trade and connectedness for small and medium-sized enterprises (SMEs). With one of the most diversified economies in the region, Sharjah is home to more than 45,000 SMEs and the government has identified SMEs are a key pillar for the emirate’s economic growth.
SMEs have been recognised as critical to the United Arab Emirates’s development at a federal level, with the passing of Federal Law No. 2 of 2014 on Small and Medium-Sized Enterprises and Projects, which aims to boost the contribution of local SMEs to the UAE economy. The law grants SMEs a wide range of benefits including exemptions from customs tax on equipment, raw materials and goods for production purposes, plus exemption from paying government bank guarantees for hiring new employees. The law also led to the formation of the UAE’s Council of Small and Medium-Sized Enterprises and Projects, a body to drive initiatives to support the growth of the SME sector.
The UAE’s strategic location, liberal trade policies and extensive global transport links have made the nation a haven for SMEs. SMEs contribute more than 60 percent of the UAE’s GDP, a contribution that is expected to grow to 70 percent by the year 2021. They also provide 86 percent of all private sector employment. Some 73 percent of small and medium-sized enterprises are active in the wholesale and retail sector, 16 percent in the services sector and 11 percent in the manufacturing sector.
Sharjah’s economy has been a favourite for SMEs and provides an excellent example of how governments can encourage global and local SME investment. The emirate is strategically located both within the UAE and the wider region, providing easy access to Abu Dhabi and Dubai in the south, plus the northern emirates. Sharjah’s overland links connect it with the Gulf Cooperation Council States, and a consumer market of 50 million people. Meanwhile, the emirate’s sea and air connections have made it a successful hub for regional and global trade.
In an effort to develop the economic potential of the SME sector, Sharjah has launched a raft of new initiatives over the past five years, from offering a one-stop-shop for investors setting up businesses to launching new programmes and facilities for entrepreneurs and start-ups.
The emirate’s two main free zones, Sharjah Airport Free Zone (SAIF Zone) and Hamriyah Free Zone, have already proved successful in attracting investment from SMEs across the world, in particular those manufacturing and distribution companies that rely on efficient transport and logistics. This year, Sharjah announced two more free zone developments to help grow the emirate’s knowledge economy: Sharjah Media City and the AUS Research, Technology and Innovation (RTI) Park. The emirate has also been keen to factor in opportunities for SMEs in its tourism and culture plans.
Organised by Sharjah Investment and Development Authority (Shurooq) and the Financial Times, Sharjah FDI Forum takes place 28-29 September 2016. A panel session entitled ‘How important is global connectedness for SMEs?’ takes place on Wednesday 28 September at 3.50pm, moderated by Jacopo Dettoni, Deputy Editor of the Financial Times’ fDi magazine.