Lowtax Network

Back To Top

Dubai: Country and Foreign Investment

Executive Summary

This page was last updated on 9 March 2021.

Dubai Is A Regional Entrepôt . . .

Dubai, the most internationally renowned of the seven United Arab Emirates, has a population of over 2.6 million and a booming ecomony.

Jebel Ali, home of a huge man-made port, has the largest free-trade zone on the Arabian peninsula. It houses an ever-growing list of international corporations that use the zone for both manufacturing and distribution. 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.

Al-Maktoum International Airport, named in honour of Dubai's ruling Al-Maktoum dynasty, was opened on 27 June 2010 and is the main part of the Dubai World Central complex. The airport is planned to have six runways and concourses, and, when fully operational, will be capable of handling more than 160 million passengers and more than 12 million tonnes of cargo per year.

The airport is to being completed in phases, and the first runway 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 began in 2011, though the original 2017 completion date for the airport has been postponed by 10 years due to the financial crisis.

Dubai has the most important port in the Middle East; is ranked among the world's top 10 in terms of container throughput. The emirate is strategically placed between Africa and South Asia, and between the Far East and Europe making it a gateway to over 1.5 billion consumers in countries surrounding the Red Sea and Gulf.

Dubai's state-of-the-art air cargo village helps ensure the world's 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

For decades, petroleum has dominated the economy of the UAE. Not long before 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, Dubai emirate's non-oil imports expanded by 200% between 1986 and 1994. Total non-oil trade reached a record US$297 billion 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.

In late 2004, the Dubai International Financial Centre (DIFC) began operations. As intended, this economic zone has become a major financial entrepôt. The DIFC has a large degree of sovereignty and offers companies full ownership without the obligation to have a local partner. The 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 more than 1,000.

Taxes are Minimal

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 avoidance schemes by major corporations. Dubai belongs to the unified customs area of the Gulf Co-operation Council (GCC) which covers Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (including Dubai).

The Government Is Keen To Promote E-Commerce

Dubai Investment Park, also known as Dubai Internet City (DIC) has a highly developed technical infrastructure. 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 south 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 thriving 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 ICT workers.



Back to Dubai Index »