The United Arab Emirates (UAE) including Dubai is the second largest economy in the Middle East after Saudi Arabia. One of the wealthiest countries in the region on a per capita basis, the UAE is the eighth largest producer of crude oil and 18th largest producer of natural gas in the world.
The population of the UAE is 8 million, although around 80% of the population (and 88% of its workforce) is made up of expatriate citizens. Foreign investors are attracted to its free trade by the offer of full ownership and zero taxes. Dubai Emirate has the largest population in the UAE with over 2.1 million, and covers the second-largest land territory after the capital, Abu Dhabi.
In recent years, Dubai has diversified into the tourism, aviation, exhibitions, events, ICT, re‑export and financial sectors. It has developed “seven star” luxury hotels, large port facilities and a range of free trade zones to attract both manufacturing and services industries. As a result it has become a popular location for both domestic and foreign investors.
–The impact of the Global Financial Crisis
Dubai was hit hard by the 2008 GFC and business life ground to a practical halt. Growth came to a standstill, which led to mass staffing cutbacks and corporate layoffs. Real estate prices dropped and development projects – hitherto the sign of a thriving construction industry – all but ceased. Fortunately businesses that have survived the recession are starting to feel the “recovery vibe”, and Dubai is making a gradual recovery with assistance from neighbouring Emirates.
Political stability, a mature legal system, a growing economy and a willingness to embrace foreign investment are four of the pillars for healthy inbound business investment. Dubai ticks all these boxes, and is one of the Middle East’s major economic success stories.
In March 2014 guests at a reception hosted by the Dubai Chamber of Commerce and Industry heard Penny Pritzker, US Secretary of Commerce, talk of the scope for US businesses. “American businesses can grab the opportunities that exist here, especially in the wake of the emirate’s readying to host Expo 2020,” said Pritzker, who was heading a US executive infrastructure business development mission to Dubai. Hisham Al-Shirawi, second vice chairman of Dubai Chamber responded “America ranks as Dubai’s 3rd largest trade partner globally and the nonoil trade between them was AED86 billion last year while over the past decade the total of the nonoil trade increased by 500 percent, which is an incredible amount”.
Four sectors make up three-quarters of Dubai’s non-oil GDP. Those are manufacturing, construction, trade and repairing, and services. The services sector makes up the largest percentage of the city’s GDP and can be further broken down into hospitality, transport, storage, real estate and personal and business services. Since 2000, the services industry has also been the fastest growing sector in the city. One of the factors aiding the rise of the service sector is an attempt to improve the city’s e-commerce infrastructure.
Dubai’s status as a rapidly emerging market makes it an exciting environment for entrepreneurship. With the constant influx of new residents from every corner of the world, new markets are constantly opening. The Dubai government supports entrepreneurs through the Mohammed Bin Rashid Establishment for Young Business Leaders and the Mohammed bin Rashid Al Maktoum Foundation.
Both of these organizations seek to motivate young Arab leaders to become integral parts of their region’s economy – but this, in turn, may create opportunities for outside investors, as attracting venture capital is an option for initial funding and is often a serious part of many investors’ portfolios.
Some of the top business investment opportunities in the UAE generally, and Dubai in particular.
New buildings and structures are being erected in the UAE and Dubai every day. This opens opportunities for engineers and other professionals in the building and construction sector. Similarly, investors can set up businesses that manufacture or sell raw materials used in building and construction.
A major growth area in Dubai historically and coming to the fore again, there are a range of property websites where the range of properties and prices can be tracked.
3. Financial services
Because there are many large-scale businesses in the UAE, there is a proportionately strong demand for professionals that offer financial services
As in other developed countries, the people of Dubai are health conscious. This has led to an increase in the demand for professional healthcare service providers and facilities.
There are less security concerns in Dubai than in most other developed countries, but individuals and businesses aren’t taking chances with their assets. This has led to a rise in demand for security guards as well as security devices.
There are huge opportunities in the transport sector because of the ever-high demand for transport services. Investors have the option to start a local taxi service or a trans-city transport services company.
Rapid growth has been accompanied by an increasing concern for the environment. This has created opportunities for businesses that offer various environmental protection services.
Dubai is the European travel market’s destination of choice. And this explains why there are many five-star hotels in the city. UAE hosts several thousands of visitors every year, and this opens huge opportunities for businesses that cater to tourists.
There are also many investment and business start-up opportunities for the small business sector, including travel agencies, jewellery making and retailing, specialist schools and training organisations, childcare facilities, real estate, bars and night clubs, and even employment agencies.