In the modern era, Dubai’s economic prosperity has always been closely tied to its willingness to do and promote business with the outside world.
Dubai’s modern economic development can be traced back to the 1960s, when it started investing in infrastructure such as ports, airports, and roads. In the 1970s, oil revenues allowed for further development, and the city began to focus on diversifying its economy. The 1980s and 1990s saw the establishment of free trade zones, which attracted foreign investment and contributed to the growth of industries such as finance, tourism, and real estate.
Today, Dubai is a major global business hub with a highly diversified economy. Below, we’ll look at some of the factors that make it one of the best destinations for registering a business with global aspirations.
Convenient Geographic Location and Highly Developed Transportation Infrastructure
The United Arab Emirates (UAE) is centrally located between Europe, Asia, and Africa, making it an ideal location for conducting international business. Its position offers several advantages to businesses, including:
- Gateway to the Middle East: The Middle East is home to several emerging markets with high growth potential. While it serves as a gateway to multiple regions, it’s especially well-positioned for businesses looking to expand their operations in the Middle East.
- Access to large markets: Some of the world’s largest markets, such as India, China, and Africa, are all within easy reach from the UAE. This allows businesses to uncover new opportunities in these largely untapped markets.
- Efficient transportation infrastructure: With modern seaports, airports, and highways, the UAE has a highly diverse and developed transportation infrastructure. It has some of the busiest seaports and airports in the world, enabling the flow of international business.
- Multicultural society: The UAE is a multicultural society with a large expatriate population. This makes it easier for foreign-owned businesses to find employees with the necessary skills and experience to operate in the country. It also creates new opportunities to hire a diverse workforce and find global partnerships and opportunities. In fact, up to 90% of the UAE’s workforce consists of migrant workers.
A Robust Economy With Strong Growth Prospects
Often, economies as large and developed as the UAE are either in stagnation or decline. However, the UAE still has strong prospects for economic growth thanks to its business-friendly policies and favorable economic conditions.
The UAE is the second-largest economy in the Arab world (next to Saudi Arabia), and the 31st-largest in the world, according to GDP. It has a GDP of $415 million at a ratio of $44,316 per capita. It has also enjoyed a relatively high GDP growth over the last two decades, which is currently sitting at 3.9%. Not to mention some of the lowest poverty and unemployment rates in the world.
The UAE’s economy is largely commodity-based, being rich in natural oil and gas. Rubber and plastics are other large sources of income for the country. However, a number of industries are booming in the UAE, including construction, e-commerce, tourism, real estate, health, and hospitality. So, there is no shortage of opportunities in any field.
If that’s not enough, the UAE is considered one of the top startup hubs in the world. More than $700 million was raised by startups in the first half of 2022 alone.
Impactful Government Initiatives to Promote Business Interests
One of the most impactful ways in which the UAE government has fostered a foreign-business-friendly environment is through the establishment of multiple economic “free zones,” like IFZA.
These zones encourage foreign-owned businesses with benefits such as:
- The opportunity to be 100% foreign-owned
- Tax exemptions, with 0% corporate tax and no VAT
- Easy and free wealth repatriation
- Simple and affordable company registration
The government also makes it easier for entrepreneurs to live and work in the UAE, with extended visas and a high quality of life.
The government also offers significant funding and support for both local and foreign-owned businesses and startups. This is on top of various other business support systems, like incubators, free zones, etc.
There are also plenty of special interest organizations, like the Dubai Association Center. These help foreign businesses take full advantage of the opportunities available to them and defending their interests.
Attractive Investment Opportunities
With a budding, diverse economy and business-friendly environment, there are plenty of attractive investment opportunities for businesses in the UAE. Existing businesses and new startups can pretty much take their pick. But, here are some particularly promising opportunities to look out for:
- Real estate: The UAE’s real estate market is known for its high returns on investment, especially in Dubai and Abu Dhabi.
- Tourism: The UAE is a popular tourist destination, with attractions such as the Burj Khalifa, the Dubai Mall, and the Sheikh Zayed Grand Mosque. This presents opportunities for foreign businesses to invest in hotels, resorts, and other tourism-related ventures.
- Renewable energy: The UAE is investing heavily in renewable energy, with projects such as the Mohammed bin Rashid Al Maktoum Solar Park and the Barakah Nuclear Power Plant. Foreign businesses can take advantage of this by investing in renewable energy infrastructure or providing related services.
- Logistics: The UAE is strategically located between Europe, Asia, and Africa, making it an ideal hub for logistics and transportation. Foreign businesses can invest in ports, airports, and other logistics infrastructure.
- Healthcare: The UAE has a growing healthcare sector, with high demand for quality medical services. Foreign businesses can invest in hospitals, clinics, and other healthcare facilities.
- Education: The UAE has a well-developed education sector, with many private schools and universities. Foreign businesses can invest in educational institutions or provide related services.
- Technology: The UAE is investing heavily in technology, with initiatives such as Dubai Internet City and the Abu Dhabi Global Market. Foreign businesses can invest in technology startups or provide related services.
Conclusion
The UAE’s prosperity is a result of its open business policies that have encouraged foreign investment, diversified the economy, and promoted infrastructure development. Continuing that legacy, the UAE’s central location and highly developed transportation infrastructure, coupled with its multicultural society, make it an ideal location for global businesses.
