Dubai Economy

Today, Dubai is an important tourist destination and port (Jebel Ali). It is developing as a hub for service industries such as IT and finance, with the new Dubai International Financial Centre (DIFC).

Dubai's economy was built on the oil industry, revenues from oil and natural gas currently account for less than 6% of the emirate's revenues.

The government has set up industry-specific free zones throughout the city. Dubai Internet City, now combined with Dubai Media City as part of TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority) is one such enclave whose members include IT firms such as EMC Corporation, Oracle Corporation, Microsoft, and IBM, and media organisations such as MBC, CNN, Reuters, ARY and AP. Dubai Knowledge Village (KV) is an education and training hub is also set up to complement the Free Zone�s other two clusters, Dubai Internet City and Dubai Media City, by providing the facilities to train the clusters' future knowledge workers. Internet access is restricted in most areas of Dubai with a proxy server filtering out sites deemed to be against cultural and religious values of the UAE - this includes any .il (Israeli) domains. However, areas served by TECOM (an internet service provider) are currently not filtered.


Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East.

Its low logistical and operational costs and excellent infrastructure, international outlook and liberal government policies are attracting investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.

In order to assist those interested in obtaining further details about the Dubai economy , pages have been provided below with the latest data for key socio-economic indicators. They contain tables on Dubai Economic Statistics extracted from the "Dubai Socio-Economic Development Indicators" including a wide range of current data on the Dubai economy and society. Also, other pages contain the Quarterly Indicators as well as information about Investment in Dubai, industrial projects and commercial/ business centers.

Why Choose Dubai As An Investment Location?

The Dubai economy enjoys a competitive combination of cost, market and environmental advantages that create an ideal and attractive investment climate for local and expatriate businesses alike. In fact, these advantages not only rank Dubai as the Arabian Gulf’s leading multi-purpose business center and regional hub city, but they place it at the forefront of the globe’s, dynamic and emerging market economies.
Dubai, with its ancient commercial and seafaring traditions, has long been recognized as the Middle East region’s leading trading hub and has emerged as its key re-export center. In more recent years, the Emirate has become a major venue for a number of growing, profitable industries and activities:

• Meetings, conferences, exhibitions
• Tourism
• Corporate regional headquarters
• Regional transport, distribution and logistics center
• Banking, finance and insurance
• Business and industrial consulting
• Information and Communications Technology
• Light and medium manufacturing

This all became possible due to Dubai’s warm, welcoming people, world class facilities and infrastructure and farsighted, open and liberal economic policies. Finally, committed to a progressive vision of itself, keen to diversify its economy and diminish its reliance upon shrinking oil revenues, Dubai has begun to develop into the Arabian Gulf’s premier international business center. Consider the factors that contribute to this ongoing success story.

Dubai’s Key Advantages

I. Strategic Location: Dubai is a time zone bridge between the Far East and Europe on the East-West axis and the CIS and Africa on the north-south axis. It is a gateway to a market that can be characterized as:
• Large - well established trading links exist with the greater than 1.5 billion people in the neighboring region covering the Gulf, Middle East/Eastern Mediterranean, CIS, Central Asia, Africa and the Asian sub-continent;
• Growing - Dubai’s total international trade has grown on average by over 11% per year since 1988 and regional economic growth and liberalization should boost demand further;
• Prosperous - a buoyant local economy strategically located in the midst of one of the world’s richest regions and well endowed with ample supplies of cheap energy and primary aluminum; also adjacent to major regional suppliers of vital agro-export commodities;
• Diversified - varied and significant import requirements generate opportunities for product suppliers and re-exporters;
• Accessible - served by over 120 shipping lines and linked via 85 airlines to over 130 global destinations;
• Open - no exchange controls, quotas or trade barriers.

II. Political And Economic Stability: Dubai is part of the UAE which is a low-crime and politically-stable country. Also, the UAE enjoys financial and monetary stability. Its well-developed, sophisticated banking system features extensive credit facilities and ample liquidity. The Emirate’s emerging capital markets are built on a basis of leading-edge technologies and sound regulatory systems. The government has a long, consistent commitment to pro-business, liberal economic policies including the protection of intellectual property rights. The UAE benefits from stable and harmonious industrial relations. Finally, there is a well defined, sound legal framework for business and a clear set of ownership rules. Foreigners are permitted ownership rights of up to 49% for limited liability companies established within the Emirate of Dubai and up to 100% for professional companies, branches and representative offices of foreign companies and free zones enterprises. All of these factors reflect positively in Dubai’s being assigned an investment grade rating for fixed income investment by Moody’s Investors Service.

III. Open And Free Economic System: Dubai’s economy has been kept open and free to attract investors and business. Government control and regulation of private sector activities has been kept to a minimum. There are no direct taxes on corporate profits or personal income (except for oil companies that pay a flat rate of 55% and branches of foreign banks that pay a flat rate of 20% on net profit generated within Dubai). Customs duties are low at 4% with many exemptions, 100% repatriation of capital and profits is permitted, there are no foreign exchange controls, trade quotas or barriers and a stable exchange rate exists between the US Dollar and the UAE Dirham (US$1.00=AED 3.678). Liberal visa policies permit easy importation of expatriate labor of various skill levels from almost all over the world.

IV. World Class Infrastructure and Service Sector: Dubai’s deliberate policy of investing heavily in transport, telecommunications, energy and industrial infrastructure has enabled it to have one of the best infrastructure facilities in the world; it also contributed significantly both to its ongoing prosperity and attractiveness to international business. The Emirate features a network of seven industrial areas, one business park and three highly successful, specialized free zones of international distinction, two world class seaports, a major international airport and cargo village, a modern highway network, state-of-the-art telecommunications and reliable power and utilities all of which deliver efficiency, flexibility, reliability, reasonable cost and size.Complementing its world class infrastructure is a sophisticated service sector that features leading regional and international freight forwarders, shipping companies, insurers plus major international hotels, banks and financial service firms, lawyers, accounting firms, consultants, advertising agencies, top international exhibition and conference facilities, high quality office and residential accommodation, first class hospitals, schools, shopping centers and recreational facilities. Free Zones Websites: Dubai Airport Free Zone Jebel Ali Free Zone Dubai Media City Dubai Internet City

V. Competitive Cost Structure: International companies setting up in Dubai can obtain significant cost advantages not generally available internationally. The major factors are:

• No foreign exchange controls,
• No trade barriers or quotas,
• Competitive import duties (4% with many exemptions),
• Competitive labor costs – labor force is multi-lingual and skilled,
• Competitive energy costs,
• Competitive real estate costs,
• Competitive financing costs and high levels of liquidity,
• No corporate profit or personal income taxes (except for oil companies and branches of foreign banks). You can refer to the tables under the "Cost of Doing Business" section.

VI. High Quality of Life, Excellent Living Conditions: Dubai’s private sector has invested heavily in real estate such as hotels, residential and commercial properties, recreational and leisure facilities. In addition, a number of factors have contributed to the Emirate’s high quality of life and superior living conditions making it a model location for many to emulate. Those factors include excellent infrastructural facilities, low crime, clean environment, tolerance and cultural diversity, cosmopolitan life style, modern public administration, availability of a wide range of consumer goods and services, mild winters and clean, palm fringed beaches.

VII. Strong Local Commercial Tradition and Wide Choice of Potential Business Partners: The local business class has a long tradition of trading activity and wide exposure to international business practices and state-of-the-art technologies. Local entrepreneurs have already gained successful experience with international partnerships in franchising, licensing, joint ventures, etc, in various sectors of the economy.

VIII. Extensive Foreign Trade Network & Major Achievements in Export and Re-Export Performance: Dubai boasts an extensive foreign trade network extending to 179 states thus offering the investor an extensive choice of potential global marketing outlets for a diverse portfolio of goods and services. As a member of the UAE federation, Dubai is also part of the world’s third-largest export and re-export center after Hong Kong and Singapore.

IX. Rapidly Developing Manufacturing Sector Producing a Wide Range of High Quality, Competitive Export Products: Major gains have already been made in the profitable manufacture and export of aluminum ingots, fabricated metal products, textiles and ready-made garments, gold and jewelry, prepared foodstuffs, consumer electronics, refined petroleum, chemical and non-metallic mineral products. Supportive commercial, industrial, political and economic factors are currently in place that make possible the extension of these gains to other manufacturing sub-sectors.


Where is the Dubai economy in the economic cycle? Some point to 13 years of fairly rapid growth, with just a small dip in 1998 as a sign that today we must be fairly close to the top. And yet all the economic fundamentals suggest the economy has not even begun to warm up.

In an overheating emerging economy there are tell tale signs. You would expect to see excessive creation of commercial credit. You would expect to see real estate prices triple. You would expect a doubling or trebling of local stock prices. You would expect inflation to be rising.

None of this applies to Dubai right now, though it might in a few years' time. The UAE stock market is beginning to reform and pick up steam but remains undervalued; and real estate prices have moved upwards by around just 10% in the new freehold market.

However, building material costs have increased sharply which is inflation at its root cause. But excessive monetary expansion through credit is not evident, although foreign capital inflows are rising.

Indeed, you only need to look at the sums committed to Dubai projects to realize that a boom is just starting. There is some $30-50 billion committed to projects actually underway or in progress.

There is the $4.5 billion new airport; 60-70 residential towers at the Dubai Marina; the Dubai International Financial Centre which will be bigger than London's Canary Wharf; the tallest building in the world, the Burj Dubai and The Residences next door; the Dubai International City; Dubai Healthcare City; Dubai Festival City; and the $5 billion Dubailand theme park, a desert Disneyland.

Plus two Palm Islands, one with 47 hotels including the largest leisure project in the Middle East; and an offshore archipelago of individual islands shaped like a map of the world. Not to mention an underwater hotel, high-rise freehold offices and plenty of freehold villas in landscaped communities.

Where is the Achilles heel to all this development? In the short term there is none, as the money is committed and from sources that will not dry up overnight.

Longer term this investment has to produce a solid return or investors will not invest anymore, or at least take a break while the market absorbs this munificence.

Pessimists might plump for 2007 as the moment of reckoning; others think 2010 is when this boom will run out of steam.

History suggests that economic booms generally last a bit longer than most people think, and then the downturn catches the majority unaware. Why should it be any different in Dubai?

* In Dubai there are no personal taxes other than import duties (mostly at rates up to 10%), a 5% residential tax assessed on rental value, and a 5% tax on hotel services and entertainment. Dubai's enormous oil revenues mean that the government has no need to raise income through direct taxation. Accordingly Dubai is a "no tax" emirate characterized by an almost complete absence of taxation. There are no withholding or capital taxes. With the exception of banks and oil companies no corporate income tax is payable by businesses in Dubai. Oil companies pay up to 55% tax on UAE sourced taxable income whereas banks pay 20% tax on taxable income. The taxable income of banks is as per the audited financial statements whereas that of oil companies is as per the concession agreement. Oil companies also pay royalties on production. After knowing this we can see that Dubai economy growth was very rapid and many factors show that it will grow even more in nearest future. http://www.dubai.org.uk/

The significant presence of ports and natural resources boost the Dubai economy. The ports of Dubai offers flourishing business prospect for western manufacturers. Besides, natural resources like petroleum and natural gas contribute around 3% of the UAE's gross domestic product. The modern banking and financial centres of the city are concentrated in the port area, which add to the economy of Dubai. Dubai had been an important trade route through the 1970s and 80s. Until 1990, Dubai had a free trade in gold encouraging smuggling of gold bricks to India.

Jebel Ali, built in 1970s, has been the biggest man-made harbor in the world and is a chief tourist destination and port in Dubai, boosting Dubai's economy. The port area is gradually growing as a busy hub for service industries including the new Dubai International Financial Centre (DIFC), finance and IT centers. Moreover the rapidly expanding national airline Emirates is also responsible for reinforcing the transport links and economy of Dubai simultaneously.

There are several industry specific free zones set up by the government throughout the city. These economic free zones hugely contribute to the rising financial systems of Dubai. The Dubai Media City and the Dubai Internet city together houses one such enclave consisting IT firms such as Microsoft, EMC Corporation, IBM and Oracle Corporation, and media organizations like CNN, MBC, AP, ARY and Reuters. Dubai government's emphasis to boost the market of foreign industries leads to the creation of Dubai Knowledge Village, a training hub providing education to prospective knowledge workers. The market of Dubai is further heightened by Dubai Outsourcing Zone as the government has offered concessions to set up their offices in Dubai.

The DUBAI business environment can be very lucrative and even predictable if care is taken to understand the influences working on an individual market at any one time. Keeping an ear to the ground and maintaining a steady physical presence is invaluable.

Visiting business people are advised to consult the many sources of commercial intelligence, including embassy lists, the chambers of commerce, official gazettes and tender lists. DUBAI national businessmen are the best source of information, and the ideal man in a business development role will usually be the one with excellent contacts in the local business community. Given the right high-level contacts it is possible to hear of projects ahead of the rest and long before tender documents can be officially purchased. The DUBAI is one of the most open and freely competitive markets in the world and although the authorities want to do business on the basis of quality and value for money, much still depends on this inside knowledge.

ersonalities play a significant role in contract award. The knowledge, accessibility and reputation of one's local associate is often a vital factor in determining the outcome of fierce bidding between large numbers of international companies.

Business is Distinctive
Business in the DUBAI is complicated by the distinct character of each emirate. The commercial aspirations of Dubai Emirate mean that in most quarters there is a definite will to conduct business at a Western-style pace. This does not mean that traditional courtesies are waived. Business visitors will find that in Dubai, where there are fewer commercial pressures, the pace is more measured and the atmosphere more traditional. In the smaller emirates, except Sharjah, the pace of business is altogether more traditional. Sharjah, with its rapidly growing industrial sector, to a great extent follows the Dubai mode. So lessons learned in one emirate are not necessarily applicable in another.

The application of uniform federal standards and regulations, which started in the 1980s, has increased in speed in the first half of the 1990s. But discrepancies and procedural differences still persist.

Dubai's Economic Department is a New Departure
The Dubai government set up an Economic Department in 1992 with the express purpose of facilitating and encouraging the development of trade and industry in the emirate. It functions as a one-stop shop for business registration. If it receives correctly completed documents and approvals from the respective authorities in time, then a business licence is issued within a few days.

In order to speed up the procedure, representatives from the Chamber of Commerce & Industry, Dubai Municipality, Civil Defence and a notary public all provide their services at the Economic Department. In addition, staff at the Economic Department liaise with the federal Economy & Commerce Ministry and follow up applications themselves.

However, there are categories of business that require approval from other authorities: manufacturing institutions are subject to approval by the Finance & Industry Ministry and financial institutions from the Central Bank. The Economic Department was working on a plan for future co-ordination with these authorities to further facilitate the registration process as the practical guide was being published.

In addition, the Economic Department is in charge of strategic economic planning for the emirate of Dubai, the organisation of industry and trade, the execution of statutes relating to commercial and industrial activities, developing the natural resources of the emirate and diversifying its sources of income.

To achieve this, it is in charge of preparing and maintaining the commercial register, protecting industrial and commercial property rights, organising commercial agents and mediators, commercial advertising, and decisions on the establishment or expansion of factories. It is also responsible for the promotion of the emirate's industrial products and the investment of national and foreign capital in commercial industrial projects. It can recommend government participation in development projects and represents government interests in national companies. Finally, it co-ordinates with federal government departments in the implementation of federal laws related to commerce and industry.

Sheik Mohammed has extended his vision for Dubai past gold, ski runs and oddly shaped islands. The elite of the city want Dubai to become the Middle East's financial center -- like a regional New York, London or Shanghai -- ready to absorb the vast wealth of the Gulf.

To attract businesses and banks, Dubai varies its theme of hospitality and convenience. Just as the city lures tourists with its comfortable opulence, it attracts business with a fast-tracked regulatory and court system. The Dubai International Financial Centre is a city within a city that has its own courts, regulations and commercial laws -- independent from the emirate's more conventional bureaucracy. Nearly every bank in the world has a branch there.

Dubai also owns a 20 percent stake in NASDAQ, the American stock exchange. After a failed attempt in 2006 by the state-owned company Dubai Ports World to take over six American ports, the UAE and Dubai began a multimillion-dollar public relations campaign to improve their image. Because Sept. 11 conspirators laundered money through Dubai, many in Congress thought turning over port management would risk national security. Yet Dubai is also one of the United States' strongest allies in the Middle East, hosting more Navy ships than any other international port [source: NPR].

But as Dubai works abroad to promote its carefully crafted identity, it struggles to define itself at home. Fewer than than one-eighth of Dubai's residents are actually UAE citizens [source: National Geographic]. The "nationals," who stand out with their distinctive dress -- white long-sleeved robes (dishdashas) for men and black gowns and scarves (abayas) for women -- represent the wealth of Dubai. They own the property and businesses and oversee a managerial class of expatriates who in turn oversee the majority of the population -- migrant laborers. But with so many foreigners and a constant flow of freewheeling tourists, many natives question whether they've traded culture for profit.

Next, we'll learn more about Dubai's migrant laborers and the troubling trade in humans.

Dubai is located in the north east of the United Arab Emirates and is the country's principal commercial center, chief port and the capital of the state of Dubai. Dubai's economy was built on the back of the oil industry, which developed rapidly after oil was first struck in the mid 1960s. Dubai has changed dramatically over the last three decades, becoming a major business center with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting center in the Middle East. The city now has thriving manufacturing, finance, information technology, big choice of Dubai property and tourism sectors and is home to numerous multinational companies such as AT&T, General Motors, Heinz, IBM, Shell, and Sony.



The emirate of Dubai is strategically located between Africa and the Middle East and between the Far East and Europe, making it a gateway to over 1.5 billion consumers located in countries surrounding the Red Sea and the Gulf. It has a superb infrastructure with the consequence that it has become a key link in the global transport and distribution system.

In Dubai there are no personal taxes other than import duties (mostly at rates up to 10%), a 5% residential tax assessed on rental value, and a 5% tax on hotel services and entertainment. Dubai's enormous oil revenues mean that the government has no need to raise income through direct taxation. Accordingly Dubai is a "no tax" emirate characterized by an almost complete absence of taxation. There are no withholding or capital taxes. With the exception of banks and oil companies no corporate income tax is payable by businesses in Dubai. Oil companies pay up to 55% tax on UAE sourced taxable income whereas banks pay 20% tax on taxable income. The taxable income of banks is as per the audited financial statements whereas that of oil companies is as per the concession agreement. Oil companies also pay royalties on production.

After knowing this we can see that Dubai economy growth was very rapid and many factors show that it will grow even more in nearest future.


Dubai is located in the north east of the United Arab Emirates and is the country's principal commercial center, chief port and the capital of the state of Dubai. Dubai's economy was built on the back of the oil industry, which developed rapidly after oil was first struck in the mid 1960s. Dubai has changed dramatically over the last three decades, becoming a major business center with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting center in the Middle East. The city now has thriving manufacturing, finance, information technology, big choice of Dubai property and tourism sectors and is home to numerous multinational companies such as AT&T, General Motors, Heinz, IBM, Shell, and Sony.

The emirate of Dubai is strategically located between Africa and the Middle East and between the Far East and Europe, making it a gateway to over 1.5 billion consumers located in countries surrounding the Red Sea and the Gulf. It has a superb infrastructure with the consequence that it has become a key link in the global transport and distribution system.
The Dubai economy enjoys a competitive combination of cost, market and environmental advantages that create an ideal and attractive investment climate for local and expatriate businesses alike. In fact, these advantages not only rank Dubai as the Arabian Gulf's leading multi-purpose business center with luxury Dubai property and regional hub city, but they place it at the forefront of the globe's, dynamic and emerging market economies.

Dubai, with its ancient commercial and seafaring traditions, has long been recognized as the Middle East region's leading trading hub and has emerged as its key re-export center. In more recent years, the Emirate has become a major venue for a number of growing,
The manufacturing sector in Dubai is very healthy with some of the most important industries including beverages, chemicals, paper, pharmaceuticals and rubber. All the major international accountancy firms have offices in Dubai and the city is also home to dozens of national and locally incorporated international banks. In March 2000, the UAE's first stock exchange, the Dubai Financial Market was opened. The tourist industry is the fastest growing sector within Dubai's economy. The number of tourists visiting Dubai has increased dramatically over the last 10 years and many of them make investments in Dubai property, especially with regards to visitors from Western Europe, and the government hopes to attract 10 million tourists a year by 2010. With this in mind, huge investment is being made to develop the city's hotel, leisure and recreational infrastructure.

In Dubai there are no personal taxes other than import duties (mostly at rates up to 10%), a 5% residential tax assessed on rental value, and a 5% tax on hotel services and entertainment. Dubai's enormous oil revenues mean that the government has no need to raise income through direct taxation. Accordingly Dubai is a "no tax" emirate characterized by an almost complete absence of taxation. There are no withholding or capital taxes. With the exception of banks and oil companies no corporate income tax is payable by businesses in Dubai. Oil companies pay up to 55% tax on UAE sourced taxable income whereas banks pay 20% tax on taxable income. The taxable income of banks is as per the audited financial statements whereas that of oil companies is as per the concession agreement. Oil companies also pay royalties on production.

The decision to open the Dubai property market to non-UAE ctitzens provided a major boost to the Dubai's property market and made room for the diverse range of projects that have encouraged foreign investment. The political and economic stability of the United Arab Emirates linked with the tax free status and a high rate of return on investment is projected to sustain the property market for the foreseeable future.

The city is attracting expert and quality workers to the Emirate to fill the vacancies created by the relocation of multinational companies. Currently the demand for property far exceeds the supply and it is expected that a continous demand for the middle to high segment of the property market will continue for many years to come.

Originally Dubai's economy was based on oil revenues, but since 2000 the economy has been developed and diversified to the extent that oil accounts for only 10% of the GDP. Today Dubai has a thriving economy consisting of manufacturing, finance, information technology and tourism sectors. Giant international companies such as Heinz, IBM and Sony have established their headquarters here, all of which have had a significant impact on the real estate market.

A vigorous manufacturing and construction sector is supported by the real estate and business services sector which grew, contributing 11% or AED 19.24 billion of Dubai GDP in 2006, compared with 10% or AED 14.23 billion in 2005. Most major international accountancy firms have offices in Dubai and the city is also home to dozens of national and locally incorporated international banks.

The fastest growing sector in Dubai is the tourist industry. The number of tourists visiting Dubai has increased dramatically, especially with regards to tourists from Western Europe and the USA. The government intends to attract 10 million tourists per year by 2010. With this in mind, huge investment is being made to develop the city's hotel and leisure infrastructure with the creation of ambitious lifestyle projects such as Dubailand

1. Dubai has one of the fastest growing economies in the world.
2. Dubai is a tax free location – no capital gains tax, no tax on rental income.
3. Dubai offers investors a stable political and economic environment.
4. Demand for investment property in Dubai far exceeds supply.
5. A strong business services sector is attracting high end workers fuelling a demand for property in Dubai.
6. Investment in the leisure industry with projects like Dubailand will attract tourists and fuel a demand for holiday properties.
7. Mortgages are easily available.
8. High quality finishes are standard in all properties.
9. A superb lifestyle, year round sunshine and incredible beaches are on offer