A NEW GENERATION OF ENTREPRENEURS

SUNIL PAUL, MD OF FINESSE, ON THE NEW UAE LAW WHICH REVISES LEGAL AGE FOR STARTING BUSINESSES.

As more and more teenagers express interest in starting their businesses, savvy governments are rolling out the red carpet worldwide. In the first half of January 2022, the UAE’s Ministry of Economy announced that the minimum age for starting a business in the country stands revised to 18 years. In a nutshell, the amendment to UAE Commercial Transaction law allows any 18-year-old UAE resident to become a shareholder in a UAE firm or the sole owner and director of a limited liability company without a guardian’s signature on the Memorandum of Association.

The entry of youngsters into economic activity is expected to boost the entrepreneurial and innovation quotients of the UAE economy. Already, the UAE ranks at the top of the list of best countries for entrepreneurs, according to The Global Entrepreneurship Monitor’s 2022 report.

The report, which assesses the conditions for entrepreneurs in 50 countries worldwide, found that the UAE, with the highest National Entrepreneurial Context Index (NECI) score of 6.8, was the best place to start a new business in 2022, followed by the Netherlands, Finland, Saudi Arabia, and Lithuania.

By reducing the minimum age for running a business, the UAE aims to attract innovative young minds who can build inspiring business models, create jobs and accelerate economic growth. Sometimes these innovations open entirely new markets, transforming industries. Of course, operating a business without meeting legal requirements has legal risks and liabilities, but the amended Commercial Transactions Law addresses those risks. Why do 18-year-olds make promising entrepreneurs? Outof-the-box thinking, passion, and imagination are advantages that 18-year-olds could bring to the startup table. A common success factor for teenage entrepreneurs is that they build their enterprises around the things they love, giving them unique insight into their customers’ needs.

They tend to have a confident and creative approach to solving ordinary problems, a vital ingredient for business success. Limited financial responsibility is also advantageous, as most teens aren’t supporting families on startup revenues. For example, Facebook founder Mark Zuckerberg and Michael Dell, the founder of Dell, started their businesses in their college dorm rooms at 19.

The amended law is poised to positively impact the UAE’s startup scene, which is already among the most vibrant and dynamic in the world. Teens today have the advantage of being more tech-savvy than prior generations. Many know how to do code and how to do 3D printing.

What would help build up the momentum are workshops that take the youngsters through the innovation development process from idea to execution. A good example is MIT’s LaunchX, which brings together top aspiring high school entrepreneurs from around the world each summer and supports them through the process of launching a startup. We also need incubation centres specifically focused on 18-yearold youths and connecting them to mentors. Financial support is most important, especially during disruptions like the COVID pandemic, which hit youth-led enterprises the hardest.

Regarding the sectors where youngsters are likely to make the most impact as entrepreneurs, topics like ecology, sustainability, and learning are popular choices among the GenZ, who are motivated by the desire to solve society’s social and environmental problems. But conventional startup segments retain their appeal. In the UK, a recent survey by financial services provider OneFamily found that the most popular sectors of youth-run businesses were technology-based (22%), design or creative (17%), and food or drink (15%).