Executive Summary


The United Arab Emirates is an active participant and supporter of the Gulf Cooperative Council (GCC), which also includes the Gulf States of Saudi Arabia, Kuwait, Oman, Qatar and Bahrain. GCC's stated economic goal is to create a cohesive and seamless trading environment for organizations doing business between these nations.

The UAE, long recognized as the commercial and business hub of the Arabian Gulf, has the 3rd busiest port in the world in terms of volume, with Dubai's Jebel Ali port ranking behind Singapore and Hong Kong. With its inviting business environment, the UAE has transformed itself into a truly international center for commerce and trade. This Gulf powerhouse has no corporate taxes (with the exception of banks and foreign oil companies with equity in concessions), no income taxes, and a relatively low import duty of 5 percent as a result of the GCC Customs Union implemented in January 2003. It has competitive labor coming from over 150 countries and a domestic market with a per capita income of around US $18,400 according to UAE Central Bank statistics.

Although oil and gas production has been a mainstay of the UAE economy and is expected to remain a major revenue earner for years to come.

The UAE is a model for digital readiness in the Middle East and has embraced the Internet age, as well as mobile phone technology. The government has held programs to educate the business community and encourage understanding of the Internet and its capabilities. The Emirate of Dubai, which has capitalized on its strategic trading position between Central Asia, the former Soviet Union, the Middle East, and Africa for centuries, is in constant growth. The emirate plans to attract international investment, companies and visitors with projects such as private housing developments; the ambitious man-made Palm islands that will include 80 hotels and a legion of private residences; Jebel Ali Free Zone (JAFZ) with 2400 companies (150 US-owned) and free trade zones with various sector specialties including Dubai Internet City and its sister Dubai Media City. Plans are also under way for International Finance and Health Care centers that will draw professionals and companies from around the world. Borrowing on the success of JAFZ, with the exception of Abu Dhabi, each emirate has at least one free zone. Most emirates have seaports (Dubai has two) and airports as well.

A growing and attractive market for a wide variety of products, the UAE can be a difficult place to do business. It is not a market for the first-time exporter. Foreign companies find it extremely difficult to legally dismiss a non-performing local agent without protracted litigation, and it is difficult if not impossible to sell without a local agent.

The UAE is a member of the WTO and is bound as a developing nation by the General Agreement of Tariffs and Trade (GATT); the General Agreement on Trade in Service (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The UAE government repealed previous copyright, trademark, and patent laws and issued improved legislation in 2002 in harmony with international standards and exceeding the UAE's TRIPs obligations. The government is also a contracting party to the World Intellectual Property Organization (WIPO), and has signed the Paris Convention for the Protection of Industrial Property (patent, trademark and related industrial property).

The UAE has traditionally been, and continues to be, a leading trading center. Demand for training and technology transfers continuously growing.High product quality, reliability, training, and after sale service continue to be attractive features.

The United Arab Emirates (UAE) is a federation of seven emirates located on the Arabian Peninsula. The UAE has a coastline and seaports inside as well as outside the Strait of Hormuz, which is the entrance to the Arabian Gulf. The seven emirates are Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Qaiwain, Fujairah, and Ras Al Khaimah. The total area of the UAE is about 83600 Sq. Km., with a population exceeding 4.9 million. Each emirate has its own ruler and retains a high degree of autonomy within the federal system. The president of the UAE is chosen by the Federal Supreme Council, which is composed of the rulers of the seven emirates. In addition to the Federal Supreme Council, the federal structure includes the Council of Ministers, a Federal Judiciary, and the Federal National Council (FNC), which is a consultative body of 40 members representing the seven emirates.

GDP historically has been highly dependent on oil prices and has therefore followed a roller coaster pattern during the past 20 years, soaring during the 1970s and declining precipitously during the 1980s. These swings in national income have caused the authorities to look for ways to diversify the economy, particularly in Dubai, where oil reserves are dwindling. These attempts at diversification have met with considerable success. Government spending of past, present, and future oil revenues, along with proceeds of overseas investments derived from oil revenues, remains the engine that powers the economy.

The UAE has a well developed and modern infrastructure. Land transportation is by road and an asphalt highway network links all major cities. Authorities in Abu Dhabi and Dubai are busily engaged in widening roads and replacing worn stretches. There is no rail system in the UAE -- although Dubai is reviewing plans for metro system expected to start in early 2009-- nor any domestic air transportation network.

All emirates have modern airports and seaports. The port of Jebel Ali in Dubai is the largest man-made port in the world. Goods are imported by sea and distributed by truck within the UAE and to nearby locations in neighboring GCC countries. As part of its drive to diversify its economy away from oil to regional trade, Dubai has developed free zones at two main seaports and its international airport. There are now 12 free trade zones in the UAE, half of which are located in Dubai.

Other ports in the region, including in the UAE, have noticed Dubai's success and are seeking a share of the re-export business for themselves. While they may never be able to match Dubai for volume, efficiency, and expertise, Khor Fakkan and Fujairah, both in the UAE, possess something Dubai does not -- they are located on the Gulf of Oman outside the entrance to the Arabian Gulf. An international cargo ship can reduce sailing time by 24 hours from Europe to the Far East by not joining the queue to pass through the busy straits; bypassing the Gulf also means lower insurance rates.

The UAE has well-developed water and electricity utilities and is aggressively expanding output to keep up with increasing demand. Overall, the growth in water demand is greater than for power. Both Abu Dhabi and Dubai expect to double electric power output by 2010. The commercial value of the UAE's planned water and power projects is more than US $10 billion. Expansion projects, including Shuweihat in the Abu Dhabi Emirate, and a massive water and power project in Fujairah, managed by the UAE Offsets Group, are currently underway, and the government is considering additional projects. The UAE has the highest per capita consumption of desalinated water in the world.