Setting up a business is still very difficult and costly in the UAE, despite recent advances in improving the business environment.

“We face the typical start-up challenges around the legalities and understanding the system, even with such a large company behind us,” says Samer Choucair, vice-president of Sharjah’s Crescent Enterprises (CE) - Ventures, speaking on the sidelines of MEED’s Innovation Live event in Dubai on 21 November. “We start business all over the emirates and outside in many different industries, there is no one single way to start up a business. I can’t go anywhere and ask for a document that tells me these are the steps you need to follow.”

The legal and financial procedures for setting up a company vary not only by emirate but also by sector, and are complex and expensive.

“Each governmental department has standards which are not necessarily shared and that makes it quite difficult to manage,” says Choucair. “Then you throw freezones into the mix, and while they make business much easier to start up and have full foreign ownership, there is a grey area between freezones and the mainland as a market.”

Companies struggle to understand which services and companies can operate outside the freezone they are registered in. Often they are unable to operate across different emirates as they try to expand.

However, efforts to make the system simpler to encourage entrepreneurship may result in more complexity.

“Every emirate and government department is trying to create new processes to make it easier,” says Choucair. “That increases the disconnect between them. One of our suggestions is to develop a platform which is purely informative where someone can go to it and be handheld through all of it, all the different processes and departments, and it becomes a one-stop shop, not from a licensing perspective but to tell you what to do and make it shorter and cheaper.”

The business environment is improving rapidly as the UAE focuses on innovation, small and medium enterprises and the knowledge economy. The new bankruptcy law is a very positive change.

“The UAE is definitely doing a good job at quickly making these changes but the ease of doing business is not what it should be,” says Choucair. “When we compare ourselves to Silicon Valley, Berlin or Australia, places that can talk about how innovative and how easy it is to do business there, we are still quite a way away.”

The next priorities to improve the ease of doing business should include transparency, clarity on what type of business activities are allowed, reducing cost of setting up a business and the cost of rent, and improving ownership rights for foreign investors.

This would encourage venture capitalists (VCs) and angel investors to come into the region.

“Foreign VCs [venture capitalists] would love to come to the region but just find it too opaque,” says Choucair. “This is one of the richest regions in the world and people don’t know what to do with their money.”

The role of the government is also a stumbling block as it sometimes squeezes out the private sector.

“They’re trying to push as hard as they can to open up the market and if the private sector won’t do it, they do it themselves,” explains Choucair. “But it needs to be carefully watched - you don’t want the facilitator or the regulator to also be a competitor. It’s good in the short term but in the long term it scares the privates sector away.”

Crescent Enterprises Ventures invests in internal start-ups across different sectors, including Global Gumbo Group and Dubai Music Week in the entertainment sector, in food & beverage, industrial uniforms and energy efficient lighting.