Business in Dubai

Aired March 2005

Dynamic Dubai, the second-largest emirate in the United Arab Emirates, is a powerhouse behind the UAE’s extraordinary success story. Known as “Dubai Inc.,” not only for its pro-business approach but also for the way its ruler, His Highness General Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and the UAE’s Minister of Defense, has chosen to run Dubai the way a CEO would manage a prosperous corporation.

The government strongly supports economic diversification and synergy among key industries. Thanks to this strategy, Dubai now supports fast-growing activities in a wide variety of sectors. Dubai’s GDP rose by more than 16.7 percent in 2004….

Long a hub for traders from throughout Asia, Africa and the Middle East, Dubai today is a tax-free open economy with an international spirit, an efficient business-friendly government, transparent business practices, excellent quality of life, and outstanding opportunities for investors.

Sheikh Mohammed -- also known as the CEO of Dubai, Inc. -- has devised the ambitious Dubai 2010 plan that aims to ensure Dubai’s competitive advantages for decades to come. Sheikh Mohammed’s goals include positioning Dubai as a major tourism destination, a key global financial center, a state-of-the-art base for knowledge-oriented activities, and the hub of an international market of some two billion.

REAL ESTATE

Political stability, attractive prices and government support for the current real-estate boom have brought investors from throughout the world to the UAE’s real-estate sector, and in Dubai alone there are now over 500 real-estate firms. The real-estate sector in the UAE overall is expected to grow to US $ 50 billion by 2010, with real-estate financing to total more than US $15 billion.

Thanks to strong performance in all sectors of the economy, along with a growing local population and liberalized policies, the current real estate boom in Dubai looks set to continue

Expatriates are particularly sought-after as renters and buyers of both residential and commercial properties. New policies regarding freehold ownership have allowed foreigners to expand their real estate investment portfolios and enter the attractive second home market.

Three main players in the freehold property market in Dubai are Dubai Properties, Nakheel, and Emaar, although many assertive players have taken an active role in the market. In spite of the new opportunities freehold ownership represents, real-estate prices in Dubai have risen by only about 10% since freehold regulations were liberalized, indicating that, for investors, the best is yet to come. Dubai property is open to any investor from anywhere in the world, and getting in on the ground floor of a new property market has definite advantages.

TRANSPORT & LOGISTICS

Sheikh Rashid’s initial commitment to investing extensively in infrastructure continues today. Dubai has a state-of-the-art telecommunications infrastructure, unlimited low-cost power services, and transport facilities ranked among the best in the world.

The state-of-the-art Dubai International Airport and Emirates Airlines are helping Dubai achieve its goal of attracting 15 million visitors per year by 2010. Over 18 million passengers passed through Dubai International Airport in 2003, and a $4.1 billion expansion to be completed by 2006 will up the airport’s capacity to 60 million passengers per year. As for Emirates Airlines, it’s now one of the world’s most highly rated and successful air-travel companies, even in an era when other airlines are in trouble.

Dubai’s ports at Port Rashid and Jebel Ali handled a record 5.9 million TEUs in 2004 and achieve the fastest sea-to-air cargo transfer times in the world. Along with maintaining an impeccable security and safety record Dubai serves more than 100 shipping lines and is ranked eleventh among the world’s leading container ports.

FINANCE

One of Sheikh Mohammed’s key goals for Dubai 2010 is to make Dubai a world-class financial hub, and the Dubai International Financial Centre (DIFC) is now a dynamic financial free zone featuring the highest quality facilities and services and overseen by the rigorous and independent DIFC Financial Services Authority.

Over 100 of the world’s top 200 financial sector companies have expressed an interest in operating in the DIFC, including Credit Suisse, Deutsche Bank, Merrill-Lynch, Julius Baer, AON and Standard Chartered. Companies can count on 100 percent foreign ownership, zero tax, freedom to repatriate capital and profits without restrictions, superb infrastructure and the world-class DIFC Dubai International Financial Exchange.

As the only jurisdiction in the region with a financial centre similar in regulatory structure and quality to top global capital markets like New York, London and Hong Kong. Dubai is positioned to serve as the regional gateway for capital and investment in the Middle East, northern and eastern Africa, the Caspian states and the Indian subcontinent.

TOURISM

The World Tourism Organization recently reported that Dubai is achieving the fastest growth in tourism arrivals of any destination in the world. Dubai’s attractions include exceptional safety and security, the latest infrastructure, a pleasant climate year-round, a wide choice of luxury hotels and beach resorts, stunning one-of-a-kind attractions, superior shopping and a very open, international atmosphere.

Continued investment from local and international players has further stimulated the growth of Dubai’s tourism sector, which is already expanding by 30 percent per year.