Dubai: Country and Foreign Investment
Dubai Is A Regional Entrepot . . .
The Emirate of Dubai extends along the Arabian Gulf coast of the UAE for approximately 72 kilometres with an area of 3,885 square kilometres, and a population of more than 2 million, according to Q2 2012 figures, 50% Arab and 50% mixed. Arabic and English are the dominant languages.
Jebel Ali, home of a huge man-made port, has the largest free-trade zone in Arabia, housing an ever growing list of international corporations which use the zone for both manufacturing and as a redistribution point.
Dubai international airport is second only to Tokyo in the number of daily transit passengers it handles and second only to Seattle as a sea-air hub.
In November 2005, in anticipation of a huge increase in the numbers of tourists, business travellers and rising trading volumes, the Dubai authorities announced the launch of a project to build the world's largest airport in the Jebel Ali Free Zone.
The airport, originally known as the Jebel Ali International Airport (JXB), but since renamed the Al-Maktoum International Airport in honour of Dubai's ruling Al-Maktoum dynasty, will be a massive undertaking, with total infrastructure costs expected to stretch to an estimated US$33 billion. When completed, it will have at six parallel runways, as many concourses, and will be capable of handling more than 120 million passengers and more than 12 million tonnes of cargo per year.
The airport is to being completed in phases, and the first runway of six was completed in November 2007 at a cost of US$1 billion. The airport was opened on 27 June, 2010 with one operating runway and only handling cargo. The airport was opened to limited passenger flights in early 2011. Passenger operations are expected to begin in the final quarter of 2013, but the original 2017 completion date for the airport has been postponed by 10 years due to the financial crisis.
Dubai's harbour is the most important port in the Middle East and is ranked among the world's top 10 in terms of container throughput.
The Emirate 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.
Dubai's state-of-the-art air cargo village helps ensure the worlds fastest sea-air transport in as little as 4 hours. Transportation is facilitated by low-cost warehousing and storage facilities including purpose built cold stores. Dubai is served by more than 170 shipping lines and the airport by around 120 airlines.
. . . And Is Successfully Diversifying Away From Oil
Petroleum has traditionally dominated the economy of the UAE. At one time an underdeveloped area, by 1985 the region had the highest per capita income in the world. This immense wealth has been invested in capital improvements and social services in all seven of the emirates. Petroleum production is centred in Abu Dhabi and Dubai. Industrial development is essentially petroleum related but is limited by a lack of trained personnel and raw materials.
Helped along by the Jebel Ali Free Trade Zone, which is home to 5,500 companies from over 120 countries, the emirate's non-oil imports expanded by 200% between 1986 and 1994. Total non-oil trade reached a record US$297bn in 2012. There are no foreign exchange controls, quotas or trade barriers. Import duties are extremely low, and many products are exempt. The UAE dirham is freely convertible and is linked to the US dollar.
During 2002, Dubai began to develop plans for the Dubai International Financial Centre (DIFC), intended to be a major financial entrepot; a proposed regulatory structure for the DIFC was published in June, 2003. In July of that year, the Federal Cabinet of the (UAE) approved a Federal Decree allowing the DIFC a large degree of sovereignty. The DIFC was launched in 2003 and began operations in late 2004. It had been hoped that the Centre would double - to 20% - the financial sector's contribution to the GDP of the United Arab Emirates by 2010. Although this goal was not achieved, DIFC is registering continued growth with a 7% rise in active registered companies recorded in 2012. This brings the total of active companies in the centre to 912.
There are no taxes to speak of
Apart from the oil industry and domestic banking, there are no income or capital taxes in Dubai, and no withholding tax. Dubai has a number of double tax treaties with high-tax countries and is often used in international tax planning by major corporations. Dubai belongs to the unified customs area of the Gulf Co-operation Council which came into effect on January 1, 2003 and covers Kuwait, Qatar, Oman, Saudi Arabia, Bahrain, and the United Arab Emirates (including Dubai).
The Government Is Keen To Promote E-Commerce
In 2000, the Government began to construct Dubai Investment Park, also known as Dubai Internet City (DIC), which has a highly developed technical infrastructure. The first phase of the project was completed in 2002. By early 2012, more than 1,400 companies had established themselves in the DIC, including almost all the big names in IT.
The DIC occupies 3,200 hectares in the South of Dubai, near the Jebel Ali Free Zone, offering state of the art facilities and sites for manufacturing, offices, housing, and academic, research, distributions and logistics institutions.
Within a short span of time, a dynamic international community of ICT companies established itself in Dubai Internet City. The global ICT giants are all represented: Microsoft, Oracle, HP, IBM, Compaq, Dell, Siemens, Canon, Logica, Sony Ericsson and Cisco, to name just a few. These companies represent a community of over 12,000 knowledge workers.