Business Setup in UAE Exhibits Strong Growth in July 2020

Business Setup in UAE Exhibits Strong Growth in July 2020

by Zaara 08, Sep 2020

After the decline in UAE businesses due to the ongoing COVID-19 pandemic, the business setup in UAE marked a sign of growth last month.

After the composure in various restrictions that were existing due to the pandemic, there has been a marginal recovery in the UAE non oil private sector in specific.

This boostup has also opened up new opportunities for people who look upon laying new ventures in UAE.

Statistic Growth in Non-Oil Private Sector Companies in UAE

The seasonally adjusted IHS Markit Purchasing Managers' Index, which is an overview for the non-oil private sector economy, rose from 50.4 to 50.8 in July.

These growth statistics have also unlocked the room for further improvements in the coming months.

Conditions for Foreign Sales in UAE

The improvements in customer demand and the rise in new business setup in UAE is a result of the ease in the prevailing restrictions due to lockdown.

There has been a strong upliftment in the overall businesses in the UAE in the month of June. However, some business firms have also reported the downfall continuing in the path of sale overseas.

These decays have also marked a hole in the calendar of June, eliminating the gains so far.

Marginal Recovery in Growth

The overall growth statistics show a marginal upliftment portraying a slight recovery from the excessive fall in rates, which was experienced due to the pandemic.

The orders and demands in the business sector grew in July. Still, the situation for new employment in UAE declined for the seventh consecutive month.

The reason for the same persisting due to only a borderline rise in growth rates in the company formation in Dubai.

Uncertainty In UAE Employment Rate Last Month

After the rise in the need for new orders and subsequent rise in business activities, still, there was no new employment reported as the existing human resources could fulfill the necessary obligations.

Consequently, the company's stipulation to counterbalance the business costs ultimately resulted in the cut of payrolls by various business heads.

This also created a situation of unemployment in the business zones.

Future Outlook of Businesses in UAE

  • After this rise in statistics last month, new business in UAE, creating a greater sense of competition in the target market, which in turn resulted in the fall in overall selling pricing of the non-oil private sector.
  • This condition also lowered the enthusiasm among the individuals to foresee an optimistic business approach for the upcoming year.
  • Though some positive responses were observed during July after a massive downfall in May.
  • This condition has also pushed the ventures to build in stocks for future sales.

Also, the ease in the travel restrictions supported the businesses to increase their production this year.

Reports by David Owen

David Owen, an economist at the IHS Markit, also commented upon the growth rates last month, stating about the present upliftment in the expansion in businesses.

The reason for the same being the notable future opportunities that could be interpreted.

Also, the expo of 2021 is a crucial feature of firms. This could open up investments and spendings across Dubai, which would, in turn, result in the overall upliftment of the businesses.

Increased Number of Investors in UAE

According to the Government of Dubai’s Department of Economic Development, there has been a subsequent rise in the number of investors since last year due to the Foreign Direct Investment Law that was implemented in the previous year.

This has caused a rise in the number of new companies setting up in the UAE.

Meanwhile, there was a 90 - percent year-on-year increase in the issue of new business licenses.

These events have opened up hope for all to see new prospects in the market soon.


We at Commitbiz are always at the door to address various situations and challenges in the businesses and the market conditions.

We have expert solutions to all your queries related to business setup in UAE.

We look forward to helping those who wish to start new ventures in the UAE.

You can contact us and reach out to our experts for guidance and more.

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