Why the wealthy choose Dubai?
Freehold to all nationalities
Lowest crime rate in the world
Currency peg to the US Dollar
Sunny weather all year round
American, British & Canadian universities
Snapshot of Dubai
In less than 50 years, Dubai has transformed itself from a local trading
community into one of the most inspirational, exciting and successful cities in the world. Its progress
continues to make global headlines and it is now an immensely attractive destination for tourists and
businesses alike. With a diverse, multicultural population, Dubai offers its residents and businesses a
unique environment, enriched with hundreds of cultures and a quality of life and work unrivalled in the
Middle East. It is a bustling metropolis with a combination of Emirati heritage, Arabic vitality,
Western spontaneity and Asian ambition.
With an indigenous population of just 170,000, the number of
Dubai expatriate residents now stands at over 3 million, thanks to its lifestyle appeal and investment
incentives. The tax-free policies and penalty-free repatriation of earnings have enormous benefits on
both a personal and business level, with outstanding opportunities for private savings and professional
profits. As thousands of new businesses are discovering each year, Dubai is the perfect gateway between
East and West and the preferred hub for the region’s imports and exports market – one of the most
lucrative in the world. Dubai’s strategic location gives easy access to 2.2 billion consumers, from a
unique centralized time zone that combines East and West business hours.
- Dubai Population 3.33 million
- Dubai GDP (USD in nominal terms) 406 billion
- Dubai GDP per capita (USD) 37,750
- Doing Business Ranking for UAE 16th worldwide
- Global Competitiveness Ranking for UAE 25th worldwide
- Dubai total imports (USD) 230 billion
- Dubai total exports and re-exports (USD) 310 billion
- Index of Economic Freedom Ranking for UAE 76.2 (18th worldwide)
- Stage of Development for Dubai Stage 3 Innovation Driven Economy
- Human Development Index Ranking for UAE 26th worldwide
Sources: Dubai Statistics Centre, FDI Intelligence, World Bank
Economic History of Dubai
Dubai is one of seven emirates that make up the federation of the United Arab
Emirates (UAE). In 1833, eight hundred members of the Bani Yas tribe led by the Maktoum family settled
at the mouth of Dubai creek. By the 1930s, Dubai’s population had grown to nearly 20,000 – a quarter of
which were expatriates. In the 1950s the creek began to silt due to the number of ships that found it
vital for their trade. When oil was discovered in 1966, Sheikh Rashid used the revenue to rapidly
develop infrastructure including schools, hospitals, roads, modern telecommunications networks and
transport systems. A runway extension that could accommodate any type of aircraft saw Dubai
International Airport begin its journey to becoming one of the busiest in history and the largest
man-made harbour in the world was constructed at Jebel Ali including a business free zone for foreign
Dubai’s formula for development was becoming evident to everyone – visionary leadership,
high-quality infrastructure, an expatriate-friendly environment, zero tax on personal and corporate
income and low import duties. As a result, Dubai quickly became a business and tourism hub for a region
that stretches from Egypt to the Indian sub-continent and from South Africa to the CIS countries. In the
1980s and early 1990s, Dubai took a strategic decision to become a leading international tourism
destination. It is now known throughout the world for its luxury hotels, remarkable architecture,
world-class entertainment and sporting events. Such a meteoric rise has led to the city being ranked as
the top foreign direct investment destination by the FDI magazine of the Financial Times.
- Lifestyle. With over 202 nationalities represented in Dubai, the city offers a highly attractive social and multicultural environment with a safe, family-friendly lifestyle.
- Currency peg & stable economy. Dubai’s currency is pegged with US dollar at the rate of AED 3.65 per USD.
- Best retail. Dubai is a shopper’s paradise, with many international retail brands having a large presence in the city. Dubai was ranked number one in the CB Richard Ellis’ 2011 report ‘Top 20 Cities for Retail’.
- Pro-business. government Dubai has a highly proactive pro-business government, with the most transparent business regulations in the region.
- Global headquarters. Dubai plays an essential role as the main base of multinational companies operating out of the Middle East.
- Connected. Dubai offers a world-class transport infrastructure providing easy access to key international markets.
- Logistics infrastructure. With its best-in-class logistics infrastructure, Dubai is the world’s third largest re-export hub and has the world’s fourth busiest international airport.
- ICT leader. Dubai is the regional leader in ICT and telecoms. Mobile phone penetration rate in Dubai is the highest in the world.
- Confidence & “can do” attitude. The extraordinary perception and vision of Dubai’s leaders have created one of the world’s most successful and vibrant cities. A belief in the potential and possibilities of the future has lifted this previously obscure trading town into a major player on a global stage. This vision continues, and with it, Dubai’s ambition expands.
A Quality and Culture of Excellence
Ranked as the top Middle Eastern city in Mercer’s Quality of Life Index, Dubai
has become one of the world’s most preferred expatriate locations. Although it is recognized as the
fastest growing city in the world, Dubai is also one of the safest. The emirate is home to the tallest
building on the planet, the largest man-made marina, the most luxurious hotels, and with over 200
nationalities contributing to the city’s unique culture and community, it is one of the most vibrant
A Tourism and Shopping Destination
Dubai’s many attractions and experiences combine a fascinating heritage with
world-class shopping and entertainment facilities. Year-round sunshine also means plenty of opportunity
to enjoy outdoor life. The tourism infrastructure includes the widest variety of shopping experiences,
including exclusive boutiques, value chain stores and the traditional gold and spice souks. Many of the
world’s leading retailers choose Dubai as their first ventures in the Middle East. From Bloomingdales,
Gucci and Prada to Marks and Spencer, Victoria’s Secret and Monsoon, international retailers have
invested heavily in Dubai’s highly fashion-conscious residents. The shopping malls are equally varied,
from the high-end Dubai Mall, the world’s biggest shopping complex, to the exotic Dragon Mart, the
largest Chinese market outside of China.
Dubai continuously innovates to improve the quality of life of its residents. In
2009, Dubai Metro was opened. It is the longest unmanned light rail network and has the world’s largest
underground metro station. With a total of 87 trains, the metro is also the first of its kind in the
Middle East. Other public transport also includes high-end buses with air-conditioned bus shelters and
an extensive hi-tech taxi fleet giving visitors and residents a constant and varied means of travel
across the emirate at any time.
A Residential Destination
Dubai is a highly attractive residential city, with housing and accommodation
options that suit every taste, budget and lifestyle. The emirate is now home to millions of expatriates
from all over the world, who choose to live in a city with enormous business growth opportunities, an
unrivalled lifestyle, a diverse and tolerant culture, economic and political stability, innovation,
openness and flexibility. For many expatriates, the quality of life in Dubai is unrivalled.
Legal framework Investment laws, regulations and incentives are continuously
improving to encourage further foreign investment. This includes the introduction of foreign ownership
of land and stocks – Dubai became the first emirate within the UAE to open its property market to
foreign ownership, followed by Abu Dhabi.
On December 4, 2011, the UAE Federal Cabinet has approved a new Company Law that
paves the way for more relaxed foreign ownership above the existing ceiling of 49 percent in the future.
In addition, the new law allows for a simplified process of starting a business in the UAE and
strengthens protection of shareholders. A new FDI law is also in the works and, when announced, will
make the investment environment even more attractive.
Intellectual Property Rights
The UAE is a regional leader in the protection of Intellectual Property Rights,
with continuous improvements of copyright, trademark and patent laws. The rate of software piracy in the
UAE is regarded as one of the lowest in the Middle East and Dubai is acknowledged as the best
Corruption and Bureaucracy
Corruption is not part of the UAE business culture, and the country was rated at
an impressive 28th out of 180 nations in Transparency International Corruption Perception Index. The UAE
has also undertaken measures to reduce red tape surrounding foreign investment approval processes. The
number of procedures has been cut dramatically and automated services introduced by Dubai Government’s
Department of Economic Development (DED) enable investors to apply for businesses online and check the
status of their applications by phone.
The UAE’s highly developed network of roads linking all seven emirates is the
major means of business and leisure transport, although with a large percentage of the country’s
international trade conducted by sea, all seven emirates have modern port facilities. Dubai dominates
the cargo and re-export markets thanks to the size and sophistication of its two ports, Port Rashid and
Jebel Ali Port. Despite being the second port in Dubai, Port Rashid is still one of the busiest in the
Gulf region with 35 berths. The massive Jebel Ali facility has 63 berths and includes an economic free
zone. Dubai is also home to two major airline carriers, Emirates Airlines and Flydubai, the world’s
fastest growing start up airline.
It is easy and cost effective to employ both UAE nationals and expatriates, with
wide access to a skilled and experienced workforce. UAE governments from across the seven emirates
continue to invest heavily in training the national workforce to play a greater role as competitive
members of the UAE.
Access to Financing
UAE banks are more active in lending to private enterprises than their regional
counterparts and offer a greater variety of financial products and services. The low cost of borrowing
in the UAE is yet another of the highly attractive benefits for companies looking to begin or expand
their operations in the Middle East. The ever-increasing support for small and medium enterprises (SMEs)
goes from strength to strength in Dubai. Several ongoing financing and non-financing programs are
designed and implemented by SME, an agency under the Dubai Department of Economic Development tasked
with improving SMEs access to bank lending.
Investment Support and Promotion by the Government
Dubai’s Department of Economic Development (DED), which is tasked with setting
and driving Dubai’s economic agenda, supports the emirate’s transformation into a diversified,
innovative, service and knowledge-based economy to improve the business environment and increase
productivity. The DED and its four agencies develop economic plans and policies, identify and support
strategic sectors, and provide essential administration services to domestic and international investors
To support the growing foreign investment in Dubai, the government has created
several ‘Free Zones’ where foreign investors can enjoy 100 percent foreign ownership of their companies.
The absence of income tax for both mainland registered companies and those registered in the free zones
remains one of the biggest incentives for foreign companies establishing in Dubai.
Open Trading Hub
Dubai has free and open trade with more than three-quarters of goods entering the
emirate duty free. The average tariff rate is just 4 per cent, while free trade zones offer added
incentives including exemptions from taxes and duties. Dubai’s open-border foreign labour policy has
also proved a major factor in the liberal trade regime, allowing private sector businesses to recruit
expatriate workers at internationally competitive wages.
Corporate tax: Only banks and oil companies pay corporate tax. Net taxable income
of foreign banks is subject to tax at a flat rate of 20 per cent, implemented in Abu Dhabi and Dubai.
Alongside all the other benefits enjoyed by companies operating in the free trade zones, there is no
corporate tax for 50 years (a concession that is renewable). There are no withholding or capital taxes.
Business properties pay a municipal tax set at 10 per cent of annual property rental value. Double
taxation agreements exist with a number of countries, including France, Pakistan, Poland, Turkey, China,
Romania, Italy, Egypt, Germany, Singapore, Malaysia, Indonesia and India.
Individual tax: There is no income tax on individuals resident in the UAE.
Value Added Tax: There is a 5% VAT on all goods and services sold in Dubai.
Starting a Business in Dubai
Dubai offers two major alternatives for registering new or existing businesses,
either onshore with Dubai DED or offshore in one of its free zones. Whether a company sets up in
mainland Dubai or a free zone, all businesses and their employees will pay no business taxes or personal
taxes. Whichever location the investor chooses, Dubai is a business opportunity not to be missed.
Starting an Onshore Business
All businesses targeting the local markets of Dubai or the UAE in general are
generally incorporated within mainland Dubai. For businesses based in mainland Dubai, non-UAE nationals,
including nationals of other GCC states, can register their businesses with Dubai Department of Economic
Development subject to the following ownership requirements:
- Ownership up to 49% Non-GCC nationals, no limit for GCC nationals.
- One of the main advantages to setting up business in mainland Dubai is the access to the UAE and other international markets covered by various trade agreements.
Starting an Offshore Business
Businesses planning to operate offshore choose a free zone based on the sector
they operate in and their type of activities. Each free zone is governed by an independent Free Zone
Authority (FZA), which is responsible for issuing the necessary licenses. Various free zones have
different minimum capital requirements, as the table above illustrates. In general, three options exist
for investors wishing to set up their businesses within a free zone. A business wishing to operate from
a free zone can either incorporate a free zone establishment (FZE), a free zone company (FZC) or operate
through a branch office of a foreign or local company. Branch offices are subject to a limited amount of
Dubai was the first emirate to pioneer the free zone model, offering foreign
businesses attractive concessions and a number of investment incentives, including 100 percent ownership
of a subsidiary and zero taxation. There are currently 22 free zones in operation, developed for
specific sectors and industries including ICT, media, finance, gold and jewelry and health care. Jebel
Ali Free Zone is now one of the world’s largest free zones allowing for 100 percent foreign ownership
with no recruitment or sponsorship restraints. There is full corporate tax and customs duty exemption on
imported raw materials and equipment, with no levy on exports and imports.
The major free zones in Dubai are:
- Jebel Ali Free Zone
- Dubai Airport Free Zone
- Dubai Internet City
- Dubai Silicon Oasis
- Dubai Healthcare City
- Dubai Biotechnology and Research Park
- Dubai International Financial Centre
- Dubai Multi Commodities Centre
Source: Dubai FDI is the Foreign Investment Office of Dubai, part of the Dubai Department of Economic Development