This article covers the best practices and needs for reform in entrepreneurship

Entrepreneurship

Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response...

 policies in United Arab Emirates

United Arab Emirates

The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...

.

For-profit companies

Best practices:

The World Bank's 2010 Doing Business Report

Doing Business Report

The Doing Business Report is a study elaborated by the World Bank Group since 2004 every year that is aimed to measure the costs to firms of business regulations in 183 countries in 2010...

, Reforming through Difficult Times, ranks the United Arab Emirates

United Arab Emirates

The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...

 as 33rd on the overall Ease of Doing Business

Ease of Doing Business Index

The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...

, out of 183 economies worldwide. This is up from 47 on 2009, and ranks third in the Arab World and listed among the Top 10 Reformers. According to GEM 2009 Global Report, UAE has the highest increase globally in new startup activity 38% (Comparing 2006-2007) results to those in 2008-2009.

• Starting a new for-profit company in the United Arab Emirates
  United Arab Emirates
  The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
  
  , one of the 10 Doing Business indicators, became much simpler and quicker from 2000 to 2010, according to the 2010 report. The UAE’s rank propelled from 118 to 44 as a result of numerous policies taken on in the last couple of years.
• The United Arab Emirates shortened the time for delivering building permits by improving its online system for processing applications.
• Scrapping the minimum capital requirement and a reduction in number of days and procedures by eliminating the requirements to hire auditors, obtain an auditors’certificate and submit a director certificate.;as well as the requirement to show proof of deposit of capital for registration;
• Dealing with Construction Permits: The cost has been reduced to half, Builders in Dubai can now apply for “no objection” certificates, building permits and completion certificates online and has cut 4 procedures and 33 days from the process of dealing with construction-related approvals; this improved the UAE’s ranking from 54 to 27;
• Trading Across Borders: Decrease in number of documents and time for export, combined with a reduction in cost to import and export by container; the UAE’s ranking improved to five from 13 previously.
• H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE issued a decree on 10 August 2009 amending Federal Law No 8 of 1984, the company law.The amendment removes the minimum capital requirement of AED 150,000 ($40.765) for the establishment of a limited liability company (LLC) in the UAE and is retroactive to companies established on or after 1 June 2009 and allows new businesses to determine the capital required for the establishment and sustainability of their companies. The amendment to the UAE company law addresses one aspect of the overall costs of doing business as represented by the costs of Starting a Business.

Needed reforms:

Non-profits, NGOs, hybrids

In the UAE NGOs are known as associations or societies for public welfare. Although the sector is relatively small, it includes a number of wealthy philanthropic organisations, which work internationally. Federal Law No. (2) of 2008 in respect of National Societies and Associations of Public Welfare defines and provides the framework for public welfare organisations operating within the UAE. This has replaced Federal Law No. (6) of 1974, and its amending laws, which previously governed public welfare societies operating within the country.

Best practices:

Needed reforms:

Foreign ownership

Despite significant barriers in creating uniformed ownership laws in United Arab Emirates, the federal government has recently set a committee to draft the investment law of the country. Drafting this law has proven to be a time consuming job as each emirate in the country has different standards for foreign investment. This is because related laws such as land ownership, company formation and many others are different in all emirates.

Best practices:

• On March 2006, His Highness Sheikh Mohammed Bin Rashid Al Maktoum
  Mohammed bin Rashid Al Maktoum
  Mohammed bin Rashid Al Maktoum , also Sheikh Mohammed, , is the Prime Minister and Vice President of the United Arab Emirates , and absolute monarch of Dubai.-Personal life and education:...
  
  , Vice President and Prime Minister of the UAE and Ruler of Dubai
  Dubai
  Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
  
   passed the much anticipated property law for Dubai. The new law has recently been published in the Official Gazette and is now in force. The law is to be known as "The Land Registration Law of the Emirate of Dubai (No 7/2006)." Article 4 stipulates that "The right to own Land in the Emirate shall be restricted to citizens of the United Arab Emirates, citizens of the Cooperation Council for the Arab States of the Gulf, the companies totally owned by any of the foregoing, and public joint stock companies. Foreign Persons may, subject to the approval of the Ruler, be granted in certain areas the following rights: (a) The right to acquire absolute ownership of Land without restrictions as to time and (b) The right to acquire usufruct or leasehold of Land for a period not exceeding 99 years. It's expected that the residential market will benefit most from the change in the freehold and lease-hold laws, properties such as condo hotels may also see a surge in sales, now that one of the last objections to investing in dubai property by non-nationals has been eliminated.

Needed reforms:

Finances

UAE loses 3 places in this year’s Doing Business 2011 report in the ease of getting credit-from 72nd to 69th place. Access to finance continued to be one of the leading constrains in starting a business in UAE. In 2006 survey conducted by Global Entrepreneurship Monitor (GEM), entrepreneurs were forced to rely on their own social networks to source funding. Business angels, in the form of work colleagues, friends, neighbors and even strangers had been a major source of funding. Accessing to funds from commercial banks remained difficult and limited in UAE. In the joint survey of Union of Arab Banks and the World Bank on ‘The status of bank lending to SMEs in the MENA region,’ the average share of bank lending to small and medium enterprises (SMEs) was low- only 8% of their total lending in the MENA region. The average share of SME lending is only 2% in the GCC in 14% in the non-GCC region. According to the Dun &Bradstreet “UAE SME Lending Report” report in 2008, SMEs constitute 85% of the businesses in the UAE and banks generally reject between 50% to 70% of the credit applications. According to the report, 55% of the SMEs surveyed were not able to get the financing they needed. Interest rates for unsecured loan lending are around 15%.

Best practices:

• In February 2007, the credit bureau, Emcredit, started collecting information on the repayment pattern of individual borrowers as well as firms. This has allowed better supervision of the debt level of banks and borrowers. By 2010, access to credit was enhanced by setting up a legal framework for the operation of the private credit bureau and required that financial institutions share credit information

Seed capital, angel investing

In October 2007, HH Sheikh Mohammed bin Rashid Al Maktoum announced the opening of the Mohammed bin Rashid Al Maktoum Foundation

Mohammed bin Rashid Al Maktoum Foundation

On May 19, 2007, Mohammed bin Rashid Al Maktoum announced his plans to give $10bn USD to set up the Mohammed bin Rashid Al Maktoum Foundation, an educational foundation in the Middle East, one of the largest charitable donations in history...

, which was built to support future generations in devising sustainable homegrown solutions to regional challenges by spreading knowledge throughout the region and fostering ideas and innovation. the MBR Foundation is mandated to create a wealth of regional job opportunities during the next decade. his was the first step towards diversifying and growing Arab economies, and helped pave the way for the creation of the region's first Seed Capital fund and Business Angel network, the Arab Business Angel Network (ABAN).

IPOs

The Initial Public Offering

Initial public offering

An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...

 (IPO) of stock is how many entrepreneurs and the financiers who back them make their money, rewarding the risk of investing their capital and years of very hard work. (merger or acquisition

Mergers and acquisitions

Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...

 is another "exit strategy

Exit strategy

An exit strategy is a means of leaving one's current situation, either after a predetermined objective has been achieved, or as a strategy to mitigate failure. An organisation or individual without an exit strategy may be in a quagmire...

".) A challenge in UAE and across the Arab world is that capital markets are weak, unstable, and have thin trading volumes that exacerbate volatility and the influence of non-market forces.

Bankruptcy

Best practices:
Needed reforms:

• By law, if a company does not make payments to creditors for 30 days it must declare insolvency or face charges of bankruptcy by negligence, a criminal offense.
• The World Bank, a major actor in economic policy, formally advised against the GCC adopting US Chapter 11-style bankruptcy laws.
• The lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments had forced many business owners to flea in fear of criminal sanctions.
• There is also a need to encourage awareness of the legislation that already exists. This would enable businesses in difficulty to consider their options at the earliest possible opportunity. Such options may, depending on the circumstances, include entering into a formal or informal composition with creditors.

Ranking for the Arab Countries

Economies	Ease of Doing Business Ease of Doing Business Index The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...  2009/10	Global Competitiveness Index Global Competitiveness Report The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....  2010/11 (GCI)	Economic Freedom Score 2010	Prosperity Index Legatum Prosperity Index The Legatum Prosperity Index is an annual ranking developed by the Legatum Institute of 110 countries. The ranking is based according to a variety of factors including wealth, economic growth, personal wellbeing, and quality of life. Norway topped the lists of the the last two reports, those of...  2010	Information and Communication Technology Index (ICT) 2009	Innovation System Index 2009	Human Development Index Human Development Index The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...  (HDI) Value 2010	Education and Human Resources Index 2009	Knowledge Economy Index Knowledge Economic Index The Knowledge Indexes were designed as an interactive tool for benchmarking a country's position vis-a-vis others in the global knowledge economy. It was created by the World Bank Institute using the Knowledge Assessment Methodology -Knowledge Index:...  (KEI) 2009	Press Freedom Index Press Freedom Index The Press Freedom Index is an annual ranking of countries compiled and published by Reporters Without Borders based upon the organization's assessment of their press freedom records. Small countries, such as Andorra, are excluded from this report...  2010
Algeria Algeria Algeria , officially the People's Democratic Republic of Algeria , also formally referred to as the Democratic and Popular Republic of Algeria, is a country in the Maghreb region of Northwest Africa with Algiers as its capital.In terms of land area, it is the largest country in Africa and the Arab...	136	86	56.9	79	3.46	3.59	0.677	3.66	3.22	133
Bahrain Bahrain ' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...	28	37	76.3	n/a	7.3	4.29	0.801	5.82	6.04	144
Djibouti Djibouti Djibouti , officially the Republic of Djibouti , is a country in the Horn of Africa. It is bordered by Eritrea in the north, Ethiopia in the west and south, and Somalia in the southeast. The remainder of the border is formed by the Red Sea and the Gulf of Aden at the east...	158	n/a	51.0	n/a	1.32	1.68	0.402	0.88	1.47	110
Egypt Egypt Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...	94	81	59.0	89	3.92	4.44	0.620	4.35	4.08	127
Iran Iran Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...	129	69	43.4	92	5.65	4.56	0.702	3.80	3.75	175
Iraq Iraq Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....	166	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	130
Jordan Jordan Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...	111	65	66.1	74	4.95	5.59	0.681	5.62	5.54	120
Kuwait Kuwait The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...	74	35	67.7	31	6.96	4.98	0.771	4.93	5.85	87
Lebanon Lebanon Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...	113	92	59.5	84	5.35	4.53	n/a	4.92	4.81	78
Morocco Morocco Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...	114	75	59.2	62	4.37	3.72	0.567	1.95	3.54	135
Oman Oman Oman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...	57	34	67.7	n/a	4.90	4.94	n/a	4.47	5.36	124
Qatar Qatar Qatar , also known as the State of Qatar or locally Dawlat Qaṭar, is a sovereign Arab state, located in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the much larger Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its...	50	17	69.0	n/a	8.06	6.45	0.803	5.37	6.73	121
Saudi Arabia Saudi Arabia The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...	11	21	64.1	49	6.43	3.97	0.752	4.89	5.31	157
Syrian Arab Republic	144	97	49.4	83	4.43	3.17	0.589	3.10	3.09	173
Tunisia Tunisia Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...	55	32	58.9	48	4.88	4.65	0.683	4.08	4.42	164
United Arab Emirates United Arab Emirates The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...	40	25	67.3	30	8.59	6.69	0.815	4.90	6.73	n/a
West Bank and Gaza	135	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Yemen Yemen The Republic of Yemen , commonly known as Yemen , is a country located in the Middle East, occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, and Oman to the east....	105	n/a	54.4	105	1.67	2.67	0.439	1.79	2.20	170

Notes:

• n/a - not ranked
• Ease of Doing Business - ranked among 189 Economies
• GCI Index - ranked among 139 Economies
• Economic Freedom Score - 0 to 100, where 100 represents the maximum freedom
• Prosperity Index -The Prosperity Index assessed 110 countries, accounting for over 90 percent of the world’s population, and is based on 89 different variables, each of which has a demonstrated effect on economic growth or on personal wellbeing. The Index consists of eight sub-indexes, i.e. Economy, Entrepreneurship & Opportunity (E&O), Governance, Education, Health, Safety & Security, Personal Freedom and Social Capital.
• The ICT value falls on a scale of 0-10 and is calculated from three key indicators: number of telephone lines per thousand of the population, number of computers per thousand of the population, and number of internet users per thousand of the population. The top 10 per cent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• Innovation System Index - The index value falls on a scale of 0-10 and is calculated from three key indicators: Total royalty payments and receipts in US$ per person, number of patent applications granted by the US Patent and Trademark Office per million people, and the number of scientific and technical journal articles published per million people. The top 10 percent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• HDI - Calculated based on data from UNDESA (2009d), Barro and Lee (2010), UNESCO Institute for Statistics (2010a), World Bank (2010g) and IMF (2010a).
• Education and Human Resources Score - The index value falls on a scale of 0-10 and is calculated from three key indicators: adult literacy rate, secondary enrolment, and tertiary enrolment. The top 10 per cent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• Press Freedom Index- The lower the value of a state’s press freedom index, the better the situation for press freedom, ranked among 178 countries.