Glittering gateway to the Gulf
The Dubai bubble may have burst and some of its more glitzy ambitions modified, but it remains an important market – and gateway – for a wide range of UK companies. And it’s still awash with cash and opportunity.
A member of the United Arab Emirates, Dubai is known for the breakneck speed it transformed itself from a sleepy fishing village nestling on the Arabian Gulf into the ultimate world-class glass metropolis following the discovery of oil in the 1960s. Since it was formed in 1971 Dubai has undergone wholesale economic and social development, elevating it to the premier business centre in the region.
With a GDP of £55 billion, oil plays a far less prominent role these days. Producing between 50,000 and 70,000 barrels a day, oil now accounts for a mere six per cent of its revenue. Oil reserves are likely to be exhausted within the next twenty years.
With this in mind Dubai made the conscious decision a decade ago to radically diversify its economy into trade, tourism and property. It now boasts some of the most grandiose structures on earth including the globally-renowned palm islands. It also hosts Burj Khalifa, which at more than 2,700 feet is the world’s tallest building as well as the planet’s only seven-star hotel, the al Burj. It is home to the former British liner the QE2. With more than 70 malls it has earned the nickname of “shopping capital of the Middle East”.
Over the past decade it has seen a huge building boom and property inflation. However, since the financial collapse, property prices have depreciated savagely.
Along with Abu Dhabi, Dubai holds premier position amongst the emirates.
With Iran, Iraq and Saudi Arabia on its horizon, around 80 per cent of its two and a quarter million inhabitants are non-indigenous. More than 200 UK firms have a presence in the tiny state which has an area of under 1,600 square miles.
Annual trade between Dubai and the UK is worth around £9 billion, making Dubai and the wider United Arab Emirates Britain’s sixteenth biggest overseas market.
It has been designated as one of UK Trade & Investment’s high growth markets. The key sectors offering opportunities to UK companies are infrastructure (construction and mass transport), energy, defence and security, financial and professional services, education and training, financial and professional services and creative and media as well as travel and tourism, education and healthcare and transport and logistics.
Britain’s principal exports are telecommunications, power generating machinery and equipment, electrical goods, transport equipment, office machinery, interior and retail goods and non-metallic mineral manufacture. Many of these goods are re-exported to Saudi Arabia and Iran. Dubai imposes a five per cent across-the-board import tariffs on most categories of goods.
Jebel Ali in Dubai is the world’s largest man-made port with 63 deepwater berths and good warehousing facilities. An expansion of the port is underway.
Dubai offers a number of key market strengths in that it is regarded as the chief hub not only of the UAE but the wider region. There is no tax on either personal income or capital gains and English is widely spoken in business circles in the country. As a member of the Gulf Cooperation Council Dubai offers a route to other affiliate countries. There is also a large British presence with around 120,000 ex-pats resident in Dubai attracted by a liberal business environment and high standard of living. Until the economic downturn it was experiencing growth levels of around 10 per cent a year. It has ultra-low crime rates.
Another key advantage is that Dubai has more than 20 Free Trade Zones in which overseas companies can retain full ownership, enjoy tax exemption and take advantage of purpose built offices or warehouses. These cover such areas as cars, healthcare, media and textiles. There are no customs duties on imports or re-exports and assistance in gaining work permits for staff.
As a pivotal trade centre Dubai is serviced by 100 airlines and more than 170 shipping lines.
Following the 2008 crisis the Dubai government increased spending on infrastructure and transport projects by more than 40 per cent. Spending on education and health rose by around a fifth with the same increase for security, borders and the judiciary.
Telephone David Attia on 0845 034 7200 or email for advice.
Exporting to the Arab World? Apply for Arab Certificates of Origin here