Small and Medium Enterprises (SMEs) in the UAE are maintaining a steady sense of optimism despite rising costs and economic headwinds, according to RAKBANK’s latest SME Confidence Index.

The 2025 report, compiled in partnership with RFI Global, reflects a confidence score of 57, signalling continued resilience in the sector.

The findings are based on responses from over 1,200 SMEs across the UAE, surveyed between October and December 2024.

While the Index score has declined from 61 in 2023 to 57 in 2024, it remains above the base level of 50, pointing to overall positive sentiment.

Also, 68 per cent of SMEs view the future business environment as favourable, and over 60 per cent reported revenue growth in the past two years.

“Small and medium enterprises are the backbone of every thriving economy, and in the UAE, they play a central role in driving diversification and sustainable development,” said Raheel Ahmed, group CEO of RAKBANK. “We continue to reinforce our commitment to be a trusted partner on their journey, providing the insights, tools and support they need to grow their businesses and contribute to the wider economy.”

Ahmed added that the bank launched the SME Confidence Index in 2024 to capture sentiment, challenges and growth outlook.

In a major move to support the SME ecosystem, RAKBANK and Emirates Development Bank announced a strategic Dhs1bn co-financing partnership during the ‘Make it in the Emirates’ forum, under the patronage of the Ministry of Industry and Advanced Technology.

Sector trends and challenges for SMEs

Consumer and Retail Services emerged as the highest-performing sector, achieving a confidence score of 60, supported by increased consumer spending and expansion into new business channels.

Construction and Manufacturing, Transport, and Trading sectors scored 57, 57, and 58 respectively, showing stable sentiment. However, confidence in Public Services and Professional Services dipped to 56, largely due to higher operating costs and concerns over debt servicing.

While more than three in five SMEs recorded revenue increases over the past two years, over two-thirds experienced rising operational expenses.

Only 39 per cent expressed confidence in meeting debt obligations, down from the previous year.

The report found that smaller SMEs (with revenues up to Dhs30m) had a higher confidence score of 58, while larger SMEs (with revenues between Dhs30–100m) registered a lower score of 55.

Digital and sustainable growth in focus

Digital transformation continues to gain ground among UAE SMEs. Some 22 per cent now sell products or services online, while 45 per cent use digital banking channels monthly.

In parallel, sustainability is becoming a growing priority, with 55 per cent of SMEs either already on or planning to embark on a sustainability journey. One in three SMEs cited sustainability as a short-term business objective.

While navigating ongoing challenges — including the corporate tax regime introduced in 2024, demand for credit, and operational pressures — many SMEs are investing in technology, talent and market expansion to strengthen their competitive edge.

“The sector’s forward-looking mindset is especially encouraging,” Ahmed noted. “We’re seeing increased focus on entering new markets, investing in talent, and modernising payment infrastructure. We see our role as a partner in that journey, providing not just financial solutions but also the advisory support needed to help them grow with confidence.”

Amidst the slew of deals announced during President Trump’s Middle East visit in May, none was more important for US economic policy than the agreement to collaborate with Saudi Arabia on establishing new supply chains for critical minerals.

Read more: Trump’s Saudi Arabia visit unlocks $600bn in investment deals

Critical minerals are the bedrock of the modern global economy. From smartphones in our pockets to electric vehicles on our roads, and the renewable energy systems powering a cleaner future, critical minerals underpin the technologies that will define the 21st century. As the world accelerates its shift toward digital innovation and green energy, securing reliable, long-term access to these essential materials becomes a strategic priority.

But there is an urgent need for more markets to participate in this sector, in order to expand and diversify global supply. For instance, China currently accounts for more than 90 per cent of rare earth refining, 77 per cent of cobalt processing and more than 60 per cent of battery-grade global lithium refining.

Importance of boosting critical mineral supply chains

For the Gulf itself, it is important that it boosts its critical mineral supply chains. In renewable energy, copper, lithium, manganese and nickel are fundamental to solar panel technology. In AI, copper, cobalt, aluminium, lithium and nickel are needed for wiring, data centres and energy storage infrastructure.

Conversely, this also represents an opportunity. The Gulf is uniquely positioned not merely as a global trading hub, but as a potential nexus connecting mining projects and their wider supply chains, from Africa to Asia and South America.

This geographical advantage, combined with the Gulf’s diplomatic agility, positions it as an invaluable partner in an increasingly protectionist global economy. Add to this the Gulf’s strategic investments in mining projects across Africa, alongside the recent partnerships signed by the UK and US with Saudi Arabia, and the region’s influence is set to expand.

Crucially, the Gulf’s access to pools of long-term capital, including the GCC’s Sovereign Wealth Funds valued at over $3tn, alongside family offices with over $100bn in assets, can help close the funding gap in mining — a notoriously capital-intensive industry where projects can take over 15 years from exploration to production.

The mining sector requires a staggering $2.1tn in new supply investments by 2050 to meet global net-zero ambitions. In return, metals and mining offer investors healthy returns coupled with positive exposure to key thematic trends, including the energy transition, geopolitics and inflation protection.

In practice, the pressures on publicly listed mining companies to deliver short-term returns for certain investors have shifted their focus towards consolidation rather than the creation of new supply. In contrast, private and sovereign capital can bring a longer-term perspective. That is ideally suited for the mining industry’s realities, which need investment across development life cycles and through commodity pricing volatility. The success of private capital-backed firms in bringing new projects into production — outpacing larger industry players — illustrates this comparative advantage.

So, how can the Gulf seize the moment? Firstly, it must invest decisively in its own processing and refining capabilities to develop end-to-end secure supply chains. The $1.36bn lithium processing plant in Abu Dhabi, a collaboration between EZAD Group and Titan Lithium, sourcing raw materials from Zimbabwe, offers a template for success. The region’s high-tech ecosystem and culture of innovation will reinforce its capacity to build up the necessary infrastructure.

Read more: Insights: Why a global minerals strategy needs trust and traceability

Secondly, the Gulf must foster genuine Public-Private Partnerships to identify and deliver viable projects. This involves creating a collaborative framework that helps to reduce the financial, technical and operational risks. That is the most effective way to incentivise those best-in-class mining operators capable of unlocking both local and international mineral resources, in a responsible and sustainable way.

The Gulf stands at a crossroads. With the right vision and strategic partnerships, it can transition from a transit hub into a global powerhouse in critical minerals supply chains. The region can help diversify existing supply routes and build resilient, secure and sustainable chains to underpin global clean energy and advanced technologies ambitions.

• Dominic Raab is Head of Global Affairs at Appian Capital, and former UK Deputy Prime Minister and Foreign Secretary.

The UAE and Kuwait signed a series of bilateral agreements and memoranda of understanding (MoUs) on Monday, aimed at deepening cooperation across strategic sectors including health, energy, education, and defence, during an official visit by UAE Vice President Sheikh Mansour bin Zayed Al Nahyan, state news agency, WAM reported.

The signing ceremony, held at Bayan Palace in the presence of Sheikh Mansour and Kuwait’s Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah, underscores the two Gulf nations’ intent to strengthen economic and diplomatic ties amid evolving regional dynamics.

The agreements span a wide range of areas, with key MoUs covering healthcare, infrastructure, investment, social development, energy transition, and AI, as both countries pursue mutual development priorities and enhanced regional integration.

UAE-Kuwait agreements signed

According to the WAM report, the key deals signed cover sectors such as:

Health: MoUs were signed between the UAE and Kuwait’s health ministries to boost collaboration in medical services and public health policy.

Education: Both countries agreed to expand cooperation in the education sector through a pact signed by their respective ministers of education.

Energy and infrastructure: MoUs included commitments to collaborate in land transport, roads, oil and gas, and future energy initiatives such as water and electricity.

Technology and industry: A separate agreement focused on industry and advanced technology was signed to support innovation and knowledge exchange.

Humanitarian and legal affairs: Joint frameworks were agreed to address human trafficking and legal cooperation, reflecting a shared focus on rights and rule of law.

Investment: The UAE’s Minister of Investment and the head of Kuwait’s Direct Investment Promotion Authority signed an MoU to promote bilateral investment flows.

Security and data: Ministries of Interior from both sides inked an MoU on data protection and joint security information-sharing projects.

AI partnership initiated, naval contract with EDGE

The Kuwait Investment Authority joined the “Artificial Intelligence Infrastructure Partnership” initiative, which includes global partners MGX, BlackRock, Global Infrastructure Partners, and Microsoft — adding regional backing to the tech-driven project.

In a separate defence agreement, Kuwait’s Ministry of Defence signed a contract with UAE-based EDGE Group for the procurement of several “Falaj 3” class missile boats, highlighting deepening defence industry ties between the two states.

Representing the largest naval shipbuilding export in the region and one of the highest-value naval export deals globally, the agreement positions EDGE as the prime contractor overseeing the design, construction, trials, delivery, Integrated Logistics Support (ILS), and In-Service Support (ISS) for the vessels. EDGE will also supply ammunition, highlighting its end-to-end defence capabilities. Abu Dhabi Ship Building (ADSB), EDGE’s naval arm and the UAE’s premier shipbuilder, has been appointed as the build subcontractor.

A WAM report quoted Hamad Al Marar, EDGE’s MD and CEO, emphasising the deal’s strategic significance and citing its role in strengthening bilateral defence ties and showcasing EDGE’s growing global stature in complex naval platform delivery. The FALAJ 3-class vessel, already selected by the UAE Navy with its first unit ALTAF commissioned in February, is tailored for littoral defence and integrates advanced combat systems. This contract not only expands EDGE’s export footprint but also aligns with the UAE’s defence export ambitions and industrial cooperation goals.

The visit by Sheikh Mansour marks a continued trajectory of close UAE-Kuwait relations, with the new agreements expected to accelerate joint ventures and partnerships in critical sectors.

Nasdaq Dubai welcomed Mashreq’s (“Mashreq” or “the Bank”) debut listing on the exchange with the admission of a $500m Sukuk issued by Mashreq Al Islami Sukuk Company Ltd.

Read-How Mashreq is empowering businesses to ‘rise every day’

The trust certificates, due in 2030, were issued under Mashreq’s $2.5bn Trust Certificate Issuance Programme and admitted as a secondary listing following strong demand in the primary market, according to a WAM report.

This marks an important milestone for Mashreq as it expands its access to international capital markets and strengthens its presence in the Islamic finance space. It also reflects Nasdaq Dubai’s continued role in connecting regional issuers with a global investor base through a well-regulated and diversified platform.

Celebrating a strategic milestone

Senior officials from Mashreq, including Ahmed Abdelaal, Group Chief Executive Officer; Joel Van Dusen, Group Head of Corporate & Investment Banking; and Salman Hadi, Group Head of Treasury & Global Markets, attended the market opening ceremony at Nasdaq Dubai to celebrate the listing. The ceremonial bell was rung by Ahmed Abdelaal in the presence of Hamed Ali, CEO of Nasdaq Dubai and Dubai Financial Market (DFM).

“This Sukuk listing marks an important step in Mashreq’s commitment to strengthening the global Islamic finance landscape. It is a clear demonstration of Mashreq’s long-term commitment to Islamic finance, the deepening of cross-border capital flows, and the UAE’s continued emergence as a global nexus for ethical and Sharia-compliant financing. Through this programme, we are proud to reinforce investor trust and contribute meaningfully to the maturing of Islamic capital markets,” said Abdul Aziz Al Ghurair, Chairman of Mashreq.

“Our debut listing on Nasdaq Dubai marks a new chapter in Mashreq’s capital markets journey. This Sukuk issuance not only attracted strong investor interest but also affirms our disciplined approach to funding, even in a complex macro environment. As we continue to diversify our capital structure through Sharia-compliant channels, we remain committed to delivering strong fundamentals, market transparency, and sustainable value for all stakeholders,” said Ahmed Abdelaal, Group CEO of Mashreq.

Investor confidence and market impact

Hamed Ali, CEO of Nasdaq Dubai and DFM, said: “This listing reflects Mashreq’s growing ambitions in the Islamic finance sector and underscores our role as a leading marketplace that connects regional issuers with global investors. As Dubai continues to strengthen its capital markets infrastructure, we remain committed to providing an efficient and transparent platform that supports diverse financing needs and promotes sustainable growth across the financial ecosystem.”

This landmark Sukuk issuance marked Mashreq’s successful return to the international debt capital markets. It was also the first public issuance from the CEEMEA region since the announcement of U.S. tariffs in April 2025, which triggered heightened volatility across global markets. The success of this transaction renewed market participants’ confidence and was followed by a string of issuances, helping to reopen the market for regional issuers.

The transaction attracted significant investor interest, generating an orderbook of $2.9bn—nearly six times oversubscribed. The final pricing was tightened to UST +105 basis points with a fixed profit rate of 5.03 per cent per annum, reflecting investor confidence in Mashreq’s credit fundamentals. With participation from over 90 global investors across the Middle East, Europe, and Asia, the issuance reaffirms Mashreq’s leadership in Islamic finance and reinforces Dubai’s growing status as a global hub for Sharia-compliant capital markets.

With this listing, the total value of Sukuk listed on Nasdaq Dubai has reached $97.2bn, further strengthening the exchange’s position as one of the world’s largest centers for Islamic fixed income.

The overall value of debt securities listed on Nasdaq Dubai now stands at over $140bn across 163 issuances—a testament to the depth and maturity of the UAE’s capital markets and the growing appeal of Dubai as a gateway for regional and international investment.

From booming IPO pipelines to surging interest in residence-by-investment schemes, the UAE remains one of the most compelling destinations for capital in 2025.

To decode what’s driving this momentum, Gulf Business will host its next flagship Breakfast Briefing panel event on June 25 at the Metropolitan Hotel Dubai, bringing together industry leaders for a morning of sharp analysis and forward-looking discussion.

Under the theme “UAE’s hottest investment trends: what’s driving growth in 2025”, the event promises a wide-ranging conversation on the forces shaping investor appetite — from shifting global mobility patterns and public listings to the impact of generational wealth transfer and digital disruption in finance.

• Register your spot
• Click to learn more

Set against the backdrop of the UAE’s pro-investment policies and continued economic resilience, the panel will offer insights for both seasoned investors and new entrants looking to gain an edge in the region.

A top-tier speaker lineup

Among the confirmed speakers are:

• Yasmine Omari, head of wealth planning, Bank of Singapore

• Yogesh Khairajani, global market strategist, Century Financial

• Gemma Wild, head of global collaboration, MENA GPB, HSBC

• Manasvi Ghelani, associate director – customer engagement, Middle East Africa, Frost & Sullivan

• Muhammed Hassan, capital markets leader, PwC

• Dave Chaggar, sales director, Capital Club Limited

• Adel Mardini, CEO, Jetex

• Rahul Singh, managing director, Thrifty & Dollar Car Rental

• Claire Vuylsteke, director, Orbcom

• Karishma Hingorani, founder and podcaster, Karishma Konnect

Three key sessions will headline the event:

• Global mobility & residence-by-investment
  Kicking off at 9:15am, this session explores how geopolitical uncertainty and changing tax landscapes are driving demand for alternative citizenship and relocation. Moderated by Orbcom’s Claire Vuylsteke, the panel will discuss the role of residence-by-investment in securing personal freedom and capital diversification for HNWIs based in the UAE.

• IPO outlook: 2025 and beyond
  As Dubai and Abu Dhabi ramp up their listings strategies, this panel — moderated by Gulf Business Group Editor Gareth van Zyl — will explore what’s next for capital markets in the region. Speakers from Century Financial, PwC and Frost & Sullivan will dissect the performance of recent IPOs, investor sentiment, and how the UAE stacks up against global exchanges.

• The great wealth transfer & new investment strategies
  With trillions of dollars set to shift hands globally over the coming decade, this final session looks at how family offices, private banks and platforms are adapting. Moderated by Karishma Hingorani, panellists from Bank of Singapore, HSBC and Capital Club will explore emerging investment behaviour among digital-native inheritors, and the future of wealth planning in the region.

Invitation to investors and professionals

The Gulf Business Breakfast Panel begins with registration and networking at 8:00am, followed by a welcome address and opening remarks. Attendance is free by invitation or registration, but places are limited.

Whether you’re a wealth advisor, entrepreneur, family office executive or institutional investor, this is a morning designed to help you make sense of the UAE’s most powerful investment signals — and position accordingly.