Countries with the highest startup opportunities in the Middle East

Determining the perfect location for a startup is one of the first things an entrepreneur must decide. The location of a startup can help shape its future and success rate. The best way to determine the perfect location for a startup would be to use quantifiable accessible data and comparative measurement of the success rates and levels of investment in a country.
According to the World Bank, the Middle-East and North Africa region is considered one of the hotspots for startups. The region has also experienced massive reforms and has eased its conditions for doing business. In 2020, the World Bank announced four middle-eastern countries in the top 10 list of business improvers: Saudi Arabia, Jordan, Bahrain, and Kuwait. Due to the pandemic, many businesses and countries have suffered, but some startups have managed to benefit from these rapid changes.

Besides the World Bank, the Startupblink website, the most comprehensive startup ecosystem map and research center in the world releases a yearly rank of the best 100 countries and 1000 cities for startup companies. These countries are chosen based on a total score which is the sum of 3 scores measuring quality, quantity, and business environment.

The quality score is determined by extensive research on total tractions, number of international corporations, number of multinational branches, private sector investment in startups, number of employees per startup, global startup influencers, and global startup events.
The quantity score determines the number of startups and the strength of supporting organizations in the country. This score is accounted for by the number of startups, number of co-working spaces, number of accelerators, and number of start-up-related meetups.
Lastly, the most defining score is the business environment score or the business score, which determines the overall substructure, policies, and laws that affect startup entrepreneurs. This score is determined by calculating the simplicity of business procedure and registering companies, internet speed, internet freedom, advancement of technology, number of patents per capita, and English proficiency.

In startupblink’s list, Israel, UAE, Turkey, Saudi Arabia, and Qatar are among the top 100 countries for startups. The Middle East has gained ranking in the number of countries and cities on the list. Israel is the first and most successful Middle-Eastern country in the world’s top 100 startup countries, while UAE gained 18 places to stand in 25th place globally.

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Israel

Israel’s strong performance is based on quality and quantity scores, while it lacks in the business score. Forbes has also named Israel the startup Nation due to the launch of the most tech companies per capita. Due to great opportunities, ever-increasing talent pool, access to new capital due to the flood of foreign investors, and unique geographical situation, Israeli is the leading country in the number of successful tech startups. Israeli entrepreneurs, foreign VCs, and angel investors from all over the world are competing for more deals in the flood of capital.
This country has managed to succeed in spite of its lacking policy system, regulation, and infrastructure. The public sector has allowed startups to skip the limitations and restrictions, especially in comparison with other similar countries. The Israeli army is the leading accelerator to most of the startups, while some of their apps, such as Waze and Viber, have gained global success.

UAE

With cities like Dubai and Abu Dhabi, the United Arab Emirates stands as the second-best country for startups in the Middle East. The UAE has gained significant attention from global investors, especially in recent years, for its ease of doing business and tax law. The UAE only levies taxes on oil companies and foreign banks, therefore, making it a profitable and cost-friendly company for startups.
After signing a deal with Israel in the second half of 2020, the UAE gained 18 spots on the top 100 list to stand in 25th in the 2021 global list. The government also maintains a good relationship with western countries, which interests more foreign investors to invest in its leading industries such as oil, gas, finance, construction, and tourism. Pure Harvest Smart Farms ranked first on Forbes Middle-East top-funded startups by securing 135.8 million from national and international investors.

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Turkey

With a unique link between Europe and the Middle East, Turkey stands in 44th place globally. The Turkish ecosystem experienced a rise in investors, VCs, and startups since the 2000s. The Turkish government has tried to attract more angel investors and entrepreneurs by offering a variety of programs to facilitate startups, such as supporting tech funds, supporting growth funds, VC funding programs.
Even though Turkey lacks in its public sector, 31 new tech-based startups were established in the first quarter of 2021, which resulted in its five rank rise from 49th. By making a few changes, the Turkish government might be able to fulfill its potential. The most successful Turkish Startups such as Getir Tech Company, Vavacars transaction platform, and Put.io cloud service have gained great attention angle investors and VCs alike.

Saudi Arabia

Ranked 71st, Saudi Arabia is one of the most sought countries in the Middle East. The Saudi Arabian startups are well-funded and backed by the giant government-run Aramco. Saudi Arabia holds 21% of the overall deals in 2021 in the region and attracts 14% of the overall funding in the region. Apart from the oil industry, Saudi Arabia has been experiencing a construction boom as the government is trying to improve transport networks, hospitals, schools, entertainment, and energy facilities construction.
With a new refined government, Saudi Arabia was named the top improver by the World Bank in 2019, and it has since focused on creating a diverse ecosystem for new branches of startups and entrepreneurship. Saudi Arabia has traditionally been economically dependent on its oil industry; therefore, the Saudi Arabian government has been highly entwined with the country’s economy. Despite lacking freedom of people, and the internet, the World Bank has ranked it fourth for starting a business and first for protecting minority investors, which makes it a great country to invest and start a business. Tamara is a buy-now-pay-later platform that has raised 116 million dollars in 2021.

Qatar

Number 84 in the 100 global startup ranking countries is Qatar. Qatar is one of the richest countries and the largest liquid natural gas supplier in the world. With the new green initiatives, countries such as Qatar have to think about new, more economically sustainable ways for the future. This month, Reuters reported that Qatar has partnered with Rolls-Royce to create and fund green tech startups which are hoped to become Unicorn in the future. This partnership will help Qatari entrepreneurs, business investors, and VCs to develop and create more startup opportunities and create 10000 jobs.
The World Bank has ranked Qatar second in the Middle-east for paid taxes, first for registered properties, and second for construction. The issue with Qatar is that it is considered a new country in terms of variety and number of startups. However, it hopes to venture more into construction, real estate, finance, and tourism, especially with the upcoming 2022 World Cup. All of the current well-funded startups in Qatar, such as the cloud-based project MaktApp, the tracker tool SmartSRP, and assistive tech developer Bonocle, are located in Doha.

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