UAE Investments: All You Need To Know

The UAE boasts a captivating blend of natural wonders and architectural marvels, from Arabian sands and oases to awe-inspiring skyscrapers. These attractions draw not just tourists and acclaimed filmmakers but also savvy investors. Moreover, the country offers a robust economy, a well-established banking system, and a business-friendly environment – all of which are pivotal factors in the realm of investments.

• Stable Economy
• Business Climate
• Political Environment

Stable Economy

The UAE's strategic location has played a pivotal role in its economic growth. Situated at the crossroads of Europe and Asia, Asia and Africa, and Africa and Europe, it occupies a unique position at the convergence of several prominent and diverse markets spanning the Middle East, East Africa, South Asia, and Central Asia. Unsurprisingly, the UAE maintains robust connections with both key regional and global trade organizations. Since 1996, the UAE has been a member of the World Trade Organization (WTO). Furthermore, as a member state of the Greater Arab Free Trade Area (GAFTA), it collaborates with GCC nations to establish free trade agreements with major international partners such as the EU, Japan, China, India, Pakistan, Turkey, Australia, South Korea, and the South American Common Market (MERCOSUR). Additionally, the UAE has a free trade agreement in place with Singapore and the European Free Trade Association (EFTA).

In 2022, the UAE secured the 12th position in the IMD Global Economic Competitiveness Ranking. Concurrently, it held a prominent status within the MENA region (Middle East and North Africa), encompassing the Maghreb and Middle Eastern countries. The UAE boasts an extensive transportation infrastructure, featuring several deep-water ports along both the Persian Gulf and the Indian Ocean. Additionally, it is home to two major international airlines, Emirates and Etihad Airlines, facilitating connectivity to 80 countries across all continents. Remarkably, as reported by the UAE Ministry of Economy, a significant 2.4% of the world's maritime container shipments traverse through the UAE.

Here are some additional facts: the UAE ranks as the sixth largest global exporter of oil, gas, and gold. Furthermore, the travel and tourism sector contributes significantly to its GDP, accounting for 11.6%. For instance, Dubai, the most renowned emirate, welcomed 7.12 million tourists in the first half of 2022, reflecting a remarkable growth of 183% compared to the same period in 2021.

Business Climate

A favorable business environment primarily stems from a stable and developed financial sector. The UAE boasts two international financial centers, DIFC and ADGM, in addition to 52 local and foreign banks. This sector contributes significantly, with its GDP share reaching 8.6%, as reported by the UAE Ministry of Economy. What's particularly advantageous for businesses is that the UAE actively promotes private sector growth, encourages competition, and enforces anti-monopoly regulations. The UAE offers numerous investment incentives for foreign nationals, including the ability to own 100% of property in freehold zones, full repatriation of profits, no currency controls, a freely convertible currency, low inflation rates, and minimal customs tariffs (ranging from 0 to 5% for nearly all goods). According to the 2020 World Bank report, the UAE was ranked 16th globally in terms of ease of doing business. 

Today, international employees working for companies in the UAE are regarded as highly skilled. Expatriates, constituting approximately 40% of the country's total workforce, are attracted by competitive salaries and numerous career prospects. The UAE is home to individuals from over 200 different ethnic backgrounds. While Arabic is the official language of the Emirates, English is widely spoken, and many companies also employ individuals fluent in other languages.

To attract talented professionals from around the world in various fields such as healthcare, science, technology, and culture, the UAE has established an effective visa system. Inventors, athletes, scientists, investors, entrepreneurs, as well as individuals with talents in culture and the arts, can obtain a Golden Visa valid for ten years. Presently, the UAE is home to approximately 10 billionaires and around 50,000 millionaires.

One of the easiest ways to obtain a Golden Visa in the UAE is through real estate investment, particularly in Dubai, a favored destination for property investors. Such investments are deemed highly liquid and profitable, with an influx of expats and capital from other countries driving price appreciation. Over the past year, housing prices in the city have seen an average increase of approximately 10%, while rental rates have surged by nearly 20%. Additionally, Dubai attracts a diverse student population, with over 140,000 international students currently enrolled in the country's educational institutions. In Dubai alone, there are 27 different educational institutions serving nearly 28,000 students, ensuring a constant demand for rental apartments and houses.

The UAE offers exceptional opportunities for business networking, hosting numerous international conferences, exhibitions, trade shows, and investment events annually. In 2021, the World Expo in Dubai attracted 11 million visitors, and the country has ambitious plans to increase exhibition attendance to 20 million people.

Political Environment

A favorable investment climate depends on political stability within the country. In this regard, the UAE stands out as it maintains an open and diplomatic presence worldwide, with over 100 active diplomatic missions abroad and approximately 200 foreign missions within the country. The UAE is a member of key international organizations, including the Gulf Cooperation Council (GCC), the League of Arab States, and the United Nations, along with its associated agencies. Remarkably, the UAE ranked third among the most peaceful countries in the world according to the 2021 Global Peace Index by the Institute for Economics and Peace. The UAE further demonstrates its commitment to tolerance and peace through the establishment of a Minister of Tolerance and a national program dedicated to promoting tolerance, peace, and harmony. Additionally, the country has implemented measures to support vulnerable population groups.

In 2018, the UAE enacted the Foreign Direct Investment (FDI) Law, which has paved the way for a plethora of investment opportunities for foreign investors. The UAE has set an ambitious target of attracting $150 billion in foreign investments by 2030, with the aspiration of becoming one of the world's top ten investment destinations.