Doing business in Dubai and the United Arab Emirates

Master's Thesis, 2007

148 Pages, Grade: 1,0


Table of Contents

List of Tables

List of Graphs

Management Summary

1 Introduction
1.1 Subject matter and objectives
1.2 Methodology and structure

2 The United Arab Emirates
2.1 Geography
2.2 History
2.3 The seven emirates
2.3.1 Abu Dhabi
2.3.2 Dubai
2.3.3 Sharjah
2.3.4 Ajman
2.3.5 Umm Al Quwain
2.3.6 Fujairah
2.3.7 Ras Al Khaimah
2.4 Government
2.4.1 Political system
2.4.2 Legal system
2.4.3 Foreign policy
2.4.4 Fiscal and monetary policy
2.5 Infrastructure
2.6 Demographics
2.7 Culture
2.8 Labour market and education
2.9 Economic facts

3 Business Environment
3.1 Business culture
3.2 Investment climate
3.3 Major industry sectors
3.3.1 Agriculture, fishery and livestock
3.3.2 Banking and finance
3.3.3 Construction and real estate
3.3.4 Energy
3.3.5 International trade
3.3.6 Manufacturing industry
3.3.7 Tourism
3.4 Legal aspects
3.4.1 Labour law
3.4.2 Social security law
3.4.3 Civil court law
3.4.4 Property law
3.4.5 Protection of industrial and intellectual property
3.4.6 Federal commercial law
3.4.7 Commercial agencies law
3.5 Customs and taxes
3.6 Business forms
3.6.1 Direct export
3.6.2 Commercial agent
3.6.3 Representative office
3.6.4 Branch office
3.6.5 Limited liability company
3.6.6 Joint stock company
3.6.7 Joint venture
3.6.8 Professional firm and professional company
3.6.9 Offshore companies
3.6.10 Licences
3.7 Free trade zones
3.7.1 Free trade zones at a glance
3.7.2 Free zone business forms
3.7.3 Free zones in Dubai
3.7.4 Free zones in other Emirates

4 Getting started
4.1 Business opportunities
4.1.1 Construction industry
4.1.2 Environmental technology
4.1.3 Health sector
4.1.4 Timber industry
4.2 Market information
4.3 Establishing business relations
4.3.1 Trade fairs and conventions
4.3.2 Business councils and associations
4.3.3 Chambers
4.3.4 Consultancies
4.3.5 Networking
4.3.6 Tenders
4.4 Business partner selection
4.5 Business location
4.6 Registration process

5 Conclusion and Outlook


List of Appendices


List of Tables

Table 1: U.A.E. consumer price index (2000 base year)

Table 2: Population preliminary results 2005 by emirate

Table 3: Employees by economic sectors

Table 4: Average monthly salary in the U.A.E.

Table 5: Production of foodstuff

Table 6: Building an emirate

Table 7: Trade balance (in billion USD)

Table 8: Services of the German Chamber of Industry and Commerce in Abu Dhabi

Table 9: Costs for setting up in DAFZA and RAK FTZ

List of Graphs

Graph 1: Map of the United Arab Emirates

Graph 2: U.A.E. population by age group and nationality (2005)

Graph 3: GDP by sector (in million USD)

Graph 4: Main buying and supplying countries

Management Summary

The purpose of this thesis is to illustrate important considerations, as well as outlining the decisions that need to be made when considering starting to do business in the United Arab Emirates (U.A.E). Furthermore it offers an overview of the prevalent political, legal, social and economical environments that are an important basis for making the decision to expand to that region. After describing country-specific variables of the U.A.E., the business environment including business culture, industry sectors, legal and fiscal conditions, and various possible business forms will be analysed. The insights gained will be used to suggest business opportunities and to develop concrete steps on how to start business relations and set up a business in the U.A.E.

1 Introduction

1.1 Subject matter and objectives

Increasing competition forces companies to internationalisation, whether it be to generate new sources of income outside of an exhausted domestic market, to extend the product life cycle, or to establish a cost-effective manufacturing base. In each case, companies are confronted both with the decision to select an appropriate market to enter and then to approach and integrate into the selected market.[1]

A closer look should be given to the Middle East region, as it is becoming one of the most attractive regions in the world in which to do business. Countries of the Middle East showed an average annual GDP growth of five to seven per cent over the last few years with the United Arab Emirates taking the lead with 11.5 per cent of GDP growth in 2006.[2] Projects currently under development in the Gulf region reached more than USD1,000 billion by mid-2005 whereas half of the projects are construction projects and the other half is projects in the area of industrial production, oil- and gas, energy- and water supply and other infrastructure projects.[3]

The population in the Arab countries is also increasing at a fast pace creating demand for products and services. The population of Iran and Saudi Arabia more than doubled in the last 25 years,[4] and today the Middle East region has an estimated population (and therefore a potential market) of 300 million people.[5]

In particular, the U.A.E., which is located in the centre of the Middle East, offers a perfect starting point to develop a market in the region. With its strategically important location, the U.A.E. acts as a gate to the Middle East, India, Africa and Asia, potentially reaching a market of more than 1.8 billion customers.[6] The U.A.E. government has managed to turn an economy solely based on oil exports into a diversified economy showing highest growth rates in the Middle East since the 1990s. Because oil revenues are reinvested in their own country, the U.A.E. is aiming to develop a more diversified industry in order to reach independency of oil in the future. In addition, as more and more projects are launched, infrastructure has to be continuously expanded, and foreign labour and imports of various products and services is needed.[7]

The U.A.E. stands for political stability and liberal economic policy as well as a pro-Western attitude. Investors in this region find a well established infrastructure, tax exemptions, and low labour costs, all of which are key factors to developing a successful business venture.[8]

The objective of this paper is to explicate the economical, political, legal and social environment prevailing in the U.A.E. in order to provide a basis for foreign companies that have the intention to invest in the U.A.E. to make an informed decision. Furthermore, recent business opportunities will be presented, along with concrete ways of establishing business relations and how to set up a company in the area.

1.2 Methodology and structure

Working for a Dubai based consultancy in the business development sector, along with the opportunity to get in touch with governmental institutions and business organisations from various sectors provided me with invaluable input in developing this business guide for foreign companies who are intending to do business in the U.A.E.

The work is based on up to date research from books, magazines, web sites, and personal interviews. Due to the rapid development of the business environment in the U.A.E., I decided to establish an online portal providing additional information. A free monthly newsletter offers up-to-date information on issues such as business, legal, real estate, mega-projects and more. The ‘Dubai Business Portal’ can be accessed at

Chapter two gives the reader a detailed profile of the U.A.E., with an emphasis on its governmental system, infrastructure, demographics, culture, labour market, education, and fundamental economic data.


[1] cp. Terpstra and Sarathy, 2000, p. 10 et seqq.

[2] cp. Bfai Bundesagentur für Außenwirtschaft, 2007 Feb 27

[3] cp. Bfai Bundesagentur für Außenwirtschaft, 2006 Dec 12

[4] cp. Bfai Bundesagentur für Außenwirtschaft, 2007 Feb 27

[5] cp. GIC German Innovation Centre, without year

[6] cp. Bär, 2005 Jan, p. 8

[7] cp. Ochs, Heidel and Rengert, 2005, p. 16

[8] cp. Reza, July 2006, p. 3-5

Excerpt out of 148 pages


Doing business in Dubai and the United Arab Emirates
Pforzheim University
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Dipl.Betriebswirt; MBA Sascha Noack (Author), 2007, Doing business in Dubai and the United Arab Emirates, Munich, GRIN Verlag,


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