More than half of would-be entrepreneurs in Qatar are put off from starting their own businesses because of a lack of financing and onerous bureaucracy, according to the results of a recent survey.
The findings come a week after Qatar’s Emir Sheikh Tamim bin Hamad Al Thani stressed a need to cut the red tape that has inhibited more startups from opening in the country.
The latest Entrepreneurship in MENA Survey results also come ahead of the start of Global Entrepreneurship Week in Qatar on Sunday, which brings together numerous private and public sector organizations to support small and medium-sized enterprises in the state.
According to the survey, which was conducted by online recruiters Bayt.com with polling agency YouGov, some 66 percent of respondents in Qatar would prefer to run their own business – slightly more than the regional average of 64 percent.
However, 59 percent of those polled said they felt it was somewhat or very difficult to do. And nearly a fifth (19 percent) admitted they had tried and failed to establish their own business.
When asked about the hurdles facing start-ups in the country, 59 percent of respondents cited unavailability of finances, while nearly half (45 percent) blamed strict government rules and regulations.
Over a third (38 percent) said successful start-ups battled against the need to establish the right contacts, or have “wasta.”
When respondents were asked what their top concerns would be if they set up their own business today, financing again featured as the main worry and was cited by 62 percent of those surveyed.
This concern was also common in the UAE among 65 percent of respondents, and appears to be a bigger issue in Bahrain, with 71 percent of respondents citing it.
Suhail Masri, Vice President of Sales at Bayt.com, said the survey results showed more needs to be done to support new start-ups.
“Encouraging entrepreneurship is a huge focus for many countries throughout the Middle East and North Africa region, as it bolsters the economy and drives innovation.
While people in Qatar are keen to start their own business, financing it is still a key hindrance in achieving their aspiration. This may suggest that the region needs more investors to step in and help entrepreneurs.”
Encouraging more young people to start up their own business has been a key focus of Qatar’s economic diversification for a number of years, with organizations such as Bedaya Center and Qatar Business Incubation Center (QBIC) providing support to entrepreneurs.
However, numerous reports and surveys have repeatedly cited barriers to entry for those trying to make a success of their new businesses.
For example, a survey released early last year by telecoms firm Ooredoo found that youth in Qatar have the highest entrepreneurial ambitions among their Gulf peers, but also feel the most frustrated with the legal hurdles involved in starting up a business here.
“A potential hurdle for these entrepreneurs to overcome is the legal registration and establishment of a company in their country,” the Ooredoo report authors said.
In Qatar, 64 percent of youth surveyed for that report said it was difficult yet important to address the legal restrictions related to setting up a business. That was the highest response in the entire MENA region after only Yemen, at 65 percent.
Would-be entrepreneurs in Qatar are required to have a solid financial foundation before launching a company.
To register their business, they must have QR200,000 (US$54,921) in their bank account, in addition to having signed a one-year lease for office space that’s been approved by Civil Defense – a commitment that can run above QR100,000 ($27,460).
There’s also an added burden on expats, who must have a Qatari sponsor who owns 51 percent of the company.
Addressing the country’s youth last week, Sheikh Tamim urged them not to rely solely on the state but to have the drive and motivation to start up their own businesses and to have a larger role in the private sector.
The Emir said the government should help by creating favorable investment conditions, supporting startup firms and eliminating bureaucratic bottlenecks.
“Duplication among the ministries, and frequent changes in the procedures, transactions, requested forms and licenses … tend to confuse citizens, as well as local and foreign investors. Many would not venture to invest, if the investor is requested every day to fill out a new form, a new license; or if several conditions were changed many times during the submission of the application,” Sheikh Tamim added.
However, with regards to the private sector, official surveys of the labor force show that most unemployed Qataris are unwilling to work in it due to perceived unsociable working hours, a long working day, lower wages and the frequent requirement to work a six-day week.
In the latest Bayt.com survey, which interviewed 8,164 people from 13 countries in the GCC, the Levant and North Africa between Sept. 27 and Oct. 4., just over half (52 percent) said they preferred to work in the public sector, but this figure includes expat and Qataris.
Among those considering starting up their own business, nearly a quarter said architecture and engineering would be the most attractive sector, while hospitality and leisure was the next most popular field for 14 percent.
Would you start up your own business in Qatar? Thoughts?