Is any economy fool-proof? Clearly not. But is the GCC region the closest we can get? The stakes are high when it comes to answering that question because choosing the right global location to launch or scale a business can be make-or-break for entrepreneurs.
It’s undeniable that the Gulf region has emerged as a powerhouse of opportunity in recent years, attracting ambitious entrepreneurs from around the world. But what makes this region so attractive? Is the Gulf genuinely recession-resistant – a fool-proof economy – and, if so, what does it mean for entrepreneurs looking to set up shop here?
My view is that it takes a very particular mix to make an economy as robust as possible – and that means visionary government policies that look at both the short and long term, ease of doing business, physical and digital infrastructure, and a strong overall focus on entrepreneurs and the things they need in place in order to be successful.
So, let’s see how the GCC measures up.
A foundation built on stability and long-term visions
At the heart of the Gulf’s economic resilience lies a commitment to diversification and long-term planning. Countries like the UAE and Saudi Arabia are moving beyond reliance on oil revenues by investing heavily in sectors such as technology, tourism, renewable energy, and logistics. Initiatives like Saudi Arabia’s Vision 2030 and the UAE’s ‘We the UAE 2031’ Vision (among many others) are the backbone of this strategy, demonstrating a forward-looking approach that not only mitigates risks but also capitalises on emerging global trends.
For entrepreneurs, this is more than just a headline – it’s a strong signal and an invitation to tap into a region undergoing genuine, transformative change. A government that prioritises innovation and diversification creates a ripple effect of opportunities, so whether you’re in fintech, sustainability, lifestyle brands, or cutting-edge industries like AI and biotech, these initiatives provide a roadmap to thrive within the Gulf’s economy.
By clearly defining their strategic priorities, Gulf governments highlight sectors that are pivotal to their vision of the future. So the question is, where do you fit into that? For example, the focus on renewable energy reflects a global shift towards sustainability, making the region an attractive destination for green technology ventures. Similarly, investments in tourism and lifestyle underscore the push to position the Gulf as a global cultural and recreational hub. Meanwhile, the emphasis on logistics and technology signals a commitment to becoming a centre for innovation and trade.
For those considering entering the market, these initiatives are not only a reflection of governmental aspirations but also a practical guide to what matters most in the region. As I’ve said, by paying close attention to this, entrepreneurs can identify opportunities and then make their move.
Tax advantages and ease of doing business
The Gulf’s favourable tax environment is a significant draw. With no personal income tax and relatively low corporate taxes in many countries, entrepreneurs can allocate more capital to growth and innovation. Then there are the free zones, which offer 100% foreign ownership, tax exemptions, and simplified regulatory processes.
This ease of doing business is crucial. Time and again, entrepreneurs cite bureaucracy as a growth inhibitor in other regions. Why wouldn’t it be? But in the Gulf, particularly the UAE, streamlined processes enable entrepreneurs to focus on scaling their ventures rather than navigating red tape.
Infrastructure: A ready-made launchpad
The Gulf boasts world-class infrastructure – roads, ports, airports. This year, the UAE was ranked fifth in the Quality Infrastructure for Sustainable Development Index, while Saudi Arabia’s Vision 2030 contains a number of mega and giga projects aimed at expanding urban centres, strengthening the transport network, and positioning the country as a regional leader in sustainability.
Then there is digital infrastructure. According to the World Economic Forum, Microsoft will be building data and cloud centres in Saudi Arabia, while AWS will be expanding its hyper-scale UAE data centre. These giant projects combine day-to-day conveniences like fast internet and world-leading smartphone penetration.
However, we shouldn’t see this as just convenience for businesses – it should represent an actual competitive advantage. So, an e-commerce startup can benefit from unmatched logistics support, while the logistics company can leverage the extensive road network and proximity to ports and airports.
Government support for startups
Governments across the region have recognised the value of fostering entrepreneurship. The UAE has in place its National Entrepreneurship Agenda, which has a number of goals, including making the country an ‘entrepreneurial nation’ by 2031, becoming home to 10 unicorns by that same date, and aiming to land in the top three countries in the Global Entrepreneurship Index. The UAE’s Fifty Economic Plan meanwhile aims to stimulate entrepreneurship more broadly among small and medium-sized businesses, spreading the culture of entrepreneurship and cementing the UAE as a global hub and destination for entrepreneurship.
Interesting things are happening in Saudi Arabia as well. The Harvard Business Review notes that the Kingdom is expanding its startup ecosystem, focusing on tech, fintech, and e-commerce, which is predicted to surpass USD 13bn in value by 2025.
So, this proactive support reduces risk for entrepreneurs, offering a safety net that many other economies lack. Whether through grants, accelerator programmes, or venture capital initiatives, many Gulf governments are putting their weight behind new ventures.
Economic resilience
One of the most striking aspects of the Gulf is its resilience. While other regions grapple with inflation, labour shortages, or sluggish growth, the Gulf economies continue to expand. This resilience is partly due to their diversification efforts but also because of their strategic positioning as global trade and finance hubs.
So, Saudi Arabia is bucking global trends when it comes to entrepreneurial investment. Venture capital funding levels have risen year-over-year, with investment in Saudi startups growing by 72% in 2022 to a record high of USD 987m.
For entrepreneurs, this stability is a rare and valuable commodity. Knowing that the economy is less likely to swing dramatically gives founders confidence to invest in their ideas and take calculated risks.
What does this mean for entrepreneurs?
The Gulf’s unique combination of opportunity, stability, and support creates a compelling case for entrepreneurs. However, this isn’t a call for blind optimism. Entrepreneurs need to take a strategic approach to leverage these advantages effectively:
- Align with regional priorities: Focus on industries that Gulf governments are actively investing in, such as renewable energy, technology, and tourism.
- Leverage local networks: Build connections with local partners and tap into government initiatives. Relationships are key in the Gulf’s business landscape.
- Adapt to cultural nuances: Understanding local customs and market preferences can make or break your venture’s success.
- Think global, act local: The Gulf is a hub for international trade. While the market itself is attractive, the region’s connectivity also opens doors to global audiences.
A fool-proof economy?
Whether you’re considering relocating or launching your next venture here, the Gulf offers a unique blend of stability and innovation that’s hard to find elsewhere. The foundation is solid, the opportunities are vast, and for those ready to take the leap, the rewards can be transformative.
Clearly, no economy is truly fool-proof, but the Gulf comes remarkably close. Its combination of forward-thinking policies, good infrastructure, and entrepreneurial support systems make it one of the most promising regions for business growth. For entrepreneurs, the message is clear: the Gulf isn’t just an option – it’s an opportunity.
