The Government of the United Arab Emirates (UAE) is pursuing economic diversification and regulatory reforms to promote private sector development; reduce dependence on hydrocarbon revenues; and build a knowledge economy buttressed by advanced technology and clean energy.

The UAE serves as a major trade and investment hub for the Middle East and North Africa, as well as increasingly for South Asia, Central Asia, and Sub-Saharan Africa. Multinational companies cite the UAE’s political and economic stability, excellent infrastructure, developed capital markets, and a perceived absence of systemic corruption as factors contributing to the UAE’s attractiveness to foreign investors. The UAE seeks to attract foreign direct investment (FDI) by i) not charging taxes or making restrictions on the repatriation of capital; ii) allowing relatively free movement into the country of labor and low barriers to entry (effective tariffs are five percent for most goods); and iii) offering FDI incentives.

In January 2023, the UAE Federal Cabinet set out the five priorities of the UAE for 2023, focusing on strengthening national identity, advocating for the environment and sustainability, strengthening the education sector, boosting Emiratization policies, and expanding economic partnerships across the globe.

The UAE has emerged as an attractive destination for both Russians and Ukrainians following Russia’s further invasion of Ukraine. Russians in particular have been a key customer segment supporting higher sales and rental prices in Dubai’s property market. Russian and Ukrainian firms have also moved to the UAE since the invasion. The UAE prohibited exports of Indian-origin wheat for several months in 2022 to protect against domestic food shortages, but otherwise has not suffered notable adverse economic impacts from Russia’s war on Ukraine. UAE inflation rates have been consistent, if not lower than, global inflation rates.

The UAE and the country’s seven constituent emirates have passed numerous initiatives, laws, and regulations to attract more foreign investment. Recent measures include visa reforms to attract and retain expatriate professionals, a drive to create new international economic partnerships, major investments in critical industries, and policies to encourage Emirati entrepreneurship and labor force participation. These economic development projects offer both challenges and opportunities for foreign investors in the coming years. In January 2022, the UAE changed its work week for government bodies from Sunday to Thursday to Monday to Thursday with a half day on Friday in order to more closely align with world markets. To reinforce the UAE’s position as an attractive destination for expatriate workers, the UAE updated the personal status laws for all non-Muslim foreigners in December 2022 to align regulations relating to civil marriage, divorce, and child custody with Western legal frameworks.

Additionally, the UAE approved a comprehensive reform of the national legal system which, among other aims, developed the legal frameworks around data privacy, investment, regulation and legal protection of industrial property, copyrights, trademarks, and residency. The first-ever federal data protection law regulates how personal data are processed across the UAE, with separate laws on government, financial, and healthcare data to follow. The 2020 Commercial Companies law removes restrictions to facilitate further mergers and acquisition activity. The federal trademark law further expands the scope of legal protection for companies’ trademarks, products, innovations, and trade names by protecting non-traditional patterns of trademarks. The UAE introduced Federal Law No (3) of 2022, on regulating commercial agencies, which reforms a pillar of the UAE economic model by permitting international companies to operate in many sectors without the requirement for a local UAE partner. U.S. companies broadly consider these legal reforms to be positive, but investors will need to carefully consider how these changes might specifically affect their operations.

The UAE issued in December 2022 the Corporate Tax Law on business profits starting from June 1, 2023, as part of its membership in the OECD Inclusive Framework on Base Erosion and Profit Shifting. The new tax regime will impose a standard rate of nine percent on taxable profits exceeding $102,000. The law represents a complete change to the UAE tax landscape, affecting all businesses, including free zone entities. The law will include targeted exemptions for state-owned companies, extractive industries, pension funds, and investment funds. A zero rate will apply to qualifying income made in free trade zones and to tax withholding. Qualifying income has not been defined by the UAE, as of April 12, 2023.

The UAE announced in October 2021 that it would pursue net zero greenhouse gas emissions by 2050, to include an investment of $163 billion in renewable energy.

For more information, please refer to: https://www.state.gov/reports/2023-investment-climate-statements/uae/

June 24     The United Arab Emirates earlier this year further simplified the process for obtaining work permits and residency visas for the employees of the private sector companies. The required steps and documents to obtain work permit and residency visas were reduced to 5 steps and 5 documents only instead of 15 steps and 16 documents. The time period has been reduced from 30 working days to 5 working days.

June 24     UAE’s real GDP will accelerate to 6.2% in 2025 from 3.9 % in 2024 on strong foreign trade performance. Non-hydrocarbon GDP growth is expected to remain strong at 5.4% in 2024 and 5.3% in 2025. 

June 20      China and the United States invested more than $23 billion in projects in the Gulf’s two biggest economies last year. The US more than doubled its “greenfield” foreign direct investment in the UAE to nearly $4 billion, while China’s commitment to Saudi Arabia rose 10-fold to almost $17 billion. 

June 12      According to Abu Dhabi Census 2023 data, the population of Abu Dhabi has reached 3.8 million people, nearly doubling (an increase of 83 %) since 2011. This sustained upwards trajectory reflects the economic growth of the emirate.

May 25       The UAE's tourism sector contributed AED220 billion to the GDP in 2023, accounting for 11.7 % of the overall economy, This upward trend is expected to continue in 2024, with projections indicating the sector will reach AED236 billion and account for an even greater share of the GDP at 12%.

May 21      Dubai housing prices will continue to rise in 2024, with capital gains in the villa segment projected to hit 10-year highs (AED 2,000 per square for the first time in 10 years). According to international consulting group ValuStrat, which released its April price index for the emirate, apartment prices will also maintain an upward trajectory, albeit at a slower pace than villas.

May 17      The total size of the e-commerce market in the UAE reached AED 27.5 billion in 2023, with projections to exceed AED 48.8 billion by 2028, according to the fourth edition of the E-commerce in the Middle East and North Africa 2023 report by EZDubai. 

May 7       The global challenges have tested the UAE’s resilience, but the aim is to grow the economy at 7 per cent in 2024, said Minister of Economy. The UAE has been aiming to grow 7 per cent per year in order to double its gross domestic product (GDP) to Dh3 trillion by 2030. 

April 26     Buoyed by strong performance in non-oil sectors, the UAE economy is on track to expand at the fastest clip in the region while Saudi Arabia will grow at a slower pace this year than previously predicted as oil prices drop from recent peaks. The UAE's economy was forecast to expand 4.0 per cent in 2024, an upgrade from 3.8 per cent in January's poll, according to a Reuter’s poll.

April 24     The UAE’s retail sector is currently growing at a CAGR (Compound Annual Growth Rate) of 3.7%, reaching “no less than 275 billion dirhams ($74.87 billion) by 2028," according to the President and CEO of Dubai Chambers. E-commerce has been a significant driver of this growth, which grew by 10% in 2023 and it will continue a “double digit” trajectory over the next five years to top AED 42 billion. 

April 15     Organised by the Sharjah Chamber of Commerce and Industry (SCCI), this year’s Sharjah Ramadan Festival 2024 (March 8-April 13) exceeded sales volume expectations, generating approximately AED 400 million ($108 million) and achieving a growth rate of 25%. 

April 1      The UAE has surged ahead in DHL’s Global Connectedness Report to occupy the No 8 spot among the world’s top 10 most globalized countries.

March 26     Economic and trade cooperation between China and the UAE has flourished in recent years, with China consistently ranking as the UAE’s largest trade partner. In 2023, the total volume of bilateral trade between the countries reached about $95 billion. Both China and the UAE seek to strengthen their economic relations and increase trade exchange to $200 billion by 2030.

March 18     The UAE’s Federal Tax Authority has recently revealed a surge in tax refund transactions for tourists, underscoring the nation’s growing tourism sector. With an unprecedented 14.41% uptick in 2023, totaling 4.18 million transactions, the FTA’s electronic tax refund system aligns with the UAE’s digital strategy for the smart transformation of services across all sectors, including the tourism sector.

March 11      The Sharjah Economic Development Department has released its 2023 report detailing the economic performance and achievements of the emirate. Among the most notable achievements, the department recorded an overall growth of 4.1% in the number of issued and renewed licenses, showcasing Sharjah’s growing appeal for business and investment. 

Feb 27   Ministers from across the globe are convening at the World Trade Organization (WTO) Ministerial Conference in Abu Dhabi from Feb. 26-29 to try to set new rules for global commerce, including reforming its dispute system and cutting fishing subsidies.

Feb 23   The United Arab Emirates, home to the financial hub of Dubai, has been dropped from a global watchdog's list of countries at risk of illicit money flows, a win for the nation that could bolster its international standing.

Feb 22    China's Xpeng (9868.HK), opens new tab said it has established a strategic partnership with UAE-based Ali&Sons and added Italy to its Europe plans, as the electric vehicle maker ramps up overseas expansion.

February 1    Workers in the UAE are likely to take home higher paycheques this year, as corporates are expected to grant salary increases of around 4.5% in 2024, recruitment specialists Cooper Fitch said. The rise in compensation will be driven by the strong performance of the country’s non-oil sectors, coupled with an increase in the UAE’s OPEC+ oil output quota and the need for employers to retain top talent, Cooper Fitch said in its report.

January 30    New economic data revealed business activity in Abu Dhabi surging in 2023, with 25,647 new economic licenses issued worth over Dh210 billion in the year, and active licences growing 10.9 percent from last year. 

January 24    The UAE has no plans to impose income tax on individuals, according to Ministry of Finance’s Undersecretary Younis Al Khouri. 

January 21    Despite a worldwide 18 percent decrease in FDI inflows in 2023, the UAE recorded a significant 28 percent increase in new foreign investment projects, positioning it second globally after the United States.