Advantage of Entrepreneurs in Gulf Countries - Case Study Example

Advantage of Entrepreneurs in Gulf Countries Name: Tutor: Subject: Institution: Introduction Entrepreneurship has been changing in line with the ever-changing global market environment. As a result of globalization, markets have expanded and most entrepreneurs want to have a share in the global market. This has seen many businesses and entrepreneurs expanding their businesses in foreign countries where there is ready and new emerging markets. However, making the right choice for a new market in the global context requires a lot of consideration. In this regard, the gulf countries have been identified as a growth destination for new companies and businesses as they are progressively becoming friendlier to entrepreneurship. This is as a result of immense entrepreneurial ecosystem that is gradually developing. Additionally there is a free economic environment and also favourable incentives and regulations that are beneficial to any entrepreneur. These inducements include; Infrastructural development, new emerging markets in bordering countries, technological advancements, liberal and permissive business regulations, Free foreign ownership of businesses, tax exemptions in some of the free zone sectors as well as free capital repatriation. To start with most of the gulf countries are very liberal and enhances a good social scene which is favourable to any business operations. According to Rinawi (2014), this way the countries tend to be very welcoming to foreign entrepreneurs which are then complimented by their liberal and permissive regulations. For example, in Dubai free foreign ownership of businesses makes it easy and possible for businesses to acquire trading licenses in a smooth manner. Dubai for instance has in place a number of free zones. The free zones represent areas that have low or minimal standard trade practices and regulations. For example, removal or lowering of trade barriers and tariffs entices new investments mostly international or foreign investments. This makes it easier for entrepreneurs to invest in various sectors such as financial, media, internet and automotive, among others with free zone licensing (Rinawi, 2014). There are also other plans in place to extend the free zones with introduction of new zones for textiles, flowers, carpets and auto parts as well. Abu Dhabi on the other hand is also planning to come up with a competing financial free zone. Another advantage of becoming an entrepreneur in the Gulf countries is the emergence of the Gulf as an entrepreneurial hub. This has been highly aided and facilitated by the rapid increase in the access and use of the internet as well as infrastructural development. This has opened up doors to a whole lot of new opportunities and knowledge with respect to entrepreneurship. Dubai for example, is with no doubt the region’s top trading hub hence becoming a primary locale for a wide array of flourishing industries and activities. According to Rinawi (2014), this has not only been brought forward by its charming commercial and nautical traditions but also its incisive insight, innovative amenities and infrastructure in addition to the government’s favourable economic policies and regulations. The appealing nature of the gulf as an entrepreneurial destination is also attributable to the strategic location of these countries. According to Davidson (2009), traditionally, the gulf has been less linked with entrepreneurial undertakings, with oil being the major revenue in these countries. However, with the decline in the oil deposits and the need for economic diversification, these countries have embraced entrepreneurship hence becoming the most sought after and appealing places to become an entrepreneur. This way, opportunities have been opened up for entrepreneurs to invest in the wide range of entrepreneurial activities that have not been fully exploited in the past. This has led to an increased need for foreign investors with the required skills and knowledge in these sectors, thereby creating more job opportunities. For entrepreneurs, this gives them a chance to exploit and invest in the new markets especially with even more ambitious new and up coming markets available in the bordering countries. Some Gulf countries for instance the UAE, has economies that have an ambitious blend of cost, commerce and advantages hooked to the environment and location that make it attractive and inducing for both local and foreign investments. Lastly, most of these countries are welcoming to foreign investors and their entrepreneurship regulations are favourable (Selina, 2013). The free and open economy is key to attracting investments and businesses. This is as highlighted by the minimal government control and regulations over the private sector in some countries. The tax burden is not as big as there is no direct tax charged on corporate profits or personal income. The custom duty is charged at a low rate of 4 per cent and also 100 per cent permission for capital and profits repatriation. This increases the disposable income of an entrepreneur hence making it favourable to run a business. Favourable Visa policies also enhance a smooth import of varying levels of labour from around the globe. There is also a benefit of acquiring substantial cost benefits that are not commonly available anywhere in the world. These include among others; lack of controls on foreign exchange, lack of trade barriers and quotas, competitive real estate costs, competitive financing costs and high liquidity levels (Selina, 2013). This has also been championed by the extensive promotion of economic opportunity and entrepreneurship activities by the governments as they encourage more entrepreneurial investments and promote a free and peaceful economic policy. This has led to an outstanding international image that inspires both national and foreign finance in most areas of the economy (Looney, 1994). On the other hand, there is a projection of minimal jobs which is a continuing trend in most of these countries. This has led to promotion of economic opportunities and entrepreneurs who can create job opportunities. Davidson (2009) notes that, the continuing infrastructural developments in the gulf countries are also advantageous in enticing entrepreneurs into the region. Presence of a stable and efficient legal system enhances and plays a part in attracting new foreign investment for instance in Dubai. This is aided by independent commercial law courts and common law courts. This underlines the importance and relevance of the rule of law which is central to any business growth, hence the need to have a transparent and a clear legal system. This also enhances democracy and good leadership which bring forth a favourable economic environment. This is because markets are freed from politics thereby freeing the economy which enhances creation of more jobs (Selina, 2013). To end with, it is important to underline the fact that the gulf countries represent a region with a lot of potential and expansive economic opportunities. For this and other reasons, it should be one of the most likely destinations for any entrepreneur to set up or expand their business or operations. Democracy and good leadership are important for the economy to thrive through a free and peaceful economic environment. Most of these states have laid a great focus to freeing their economies thereby enhancing more entrepreneurial activities and creation of more jobs. The liberal and favourable regulations are appealing in addition to the many other incentives available to the local and foreign investors. Moreover, any entrepreneur should consider the emerging markets and entrepreneurial opportunity in this region. This is also as characterized by the governments in promoting and encouraging entrepreneurial activities by both locals and international investors. References Davidson, C. (2009). Abu Dhabi’s new economy: Oil, investment and domestic development. Middle East Policy, 16 (2), pp. 59–79. Looney, R. (1994). Industrial development and diversification of the Arabian Gulf economies. Greenwich, CT: JAI Press. Rinawi, N. (2014, Feb 12). Start upoverseas. Retrieved May 11, 2014, from www.startupoverseas.co.uk:http://www.startupoverseas.co.uk/starting-a-business-in-uae. Selina, D. (2013, Jan 25). The difficulties and benefits of becoming your own boss in the UAE. 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