The United Arab Emiraites (UAE) is starting to introduce a long-planned overhaul of the rules that govern small and midsize enterprises as part of a diversification plan to reduce the economy's dependence on oil, the Washington Post said on Thursday. The changes seek to provide entrepreneurs with better access to financing and lower registration costs to set up new businesses, the Post added. A draft law, in the works for over a year, has reached the final stage of cabinet approval, it quoted Sultan Bin Saeed Al-Mansouri, UAE's economy minister, as saying. Provisions in the law will include the creation of a federal body to address financing issues and coordinate plans and policies for small and midsize enterprises, or SME's, across the seven emirates. “Though we are facing a lot of challenges,” Mansouri said, “we cannot build a very solid base for small and medium enterprises unless we take very important positions on federal and legal levels.” The law is one of a series of initiatives aimed at strengthening the small and midsize business sector, which makes up nearly 95 percent of all UAE companies, it said citing data from the Economy Ministry. With a focus on holding them to international standards, Dubai SME, an agency of the emirate's Economic Development Department, will also publish a code of corporate governance to accompany the new legislation. The code will complement the Top 100 SME index, which was created in April and ranks Dubai's top small and midsize businesses in an effort to promote transparency. The introduction of smeconnect.ae is another initiative, announced this month, to encourage growth of the sector. The Web site is designed to be a networking platform for UAE entrepreneurs and service providers. These measures are particularly important to stimulate growth of small and midsize businesses, which cannot rely on oil revenue in the way neighboring Abu Dhabi can. An established SME sector translates into job creation and a diversified economy, which are crucial for economic sustainability in Dubai and in the region generally.
