Guidance

Overseas business risk: United Arab Emirates

Updated 3 July 2023

The United Arab Emirates (UAE) is the UK’s largest trading partner in the Middle East, 13th largest export market globally and 19th largest trading partner. The GCC as a block is now the UK’s third-biggest trading partner outside Europe. In 2022, bilateral trade between the UAE and UK was £21.6 billion including £14.3 billion in exports. In 2020, an agreement was made by the UAE-UK Business Council to reach a target of £25 billion in annual bilateral trade. Key UAE sectors for UK exporters include infrastructure, energy (clean/renewables), defence and security, cyber, education and training, financial and professional services, airports and aerospace, creative industries, media, and technology. Over 5,000 UK-registered firms operate in the UAE.

1. Political

The United Arab Emirates is a federation of seven emirates: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Fujairah, and Umm al-Qawain. The federation was formed in 1971. HH Sheikh Zayed bin Sultan Al Nahyan, the Emir (Ruler) of Abu Dhabi, was its first President. He was succeeded in both roles by his son HH Sheikh Khalifa bin Zayed al Nahyan in 2004, who was succeeded by HH Sheikh Mohammed bin Zayed Al Nahyan in May 2022. His son, HH Sheikh Khaled bin Mohamed, is the Crown Prince of Abu Dhabi. HH Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, is Vice-President and Prime Minister of the UAE.

The Federal Supreme Council (consisting of the Rulers of the seven Emirates) and the Council of Ministers constitute the executive of the UAE government. The President and the Vice Presidents/Prime Minister are confirmed by the Federal Supreme Council. The Federal Supreme Council ratifies legislation, and the appointment of Ministers and Judges of the Federal Supreme Court.

The Federal National Council performs a consultative role – considering draft legislation, proposing amendments, questioning Ministers, and scrutinising the executive. It consists of 40 members drawn from across the emirates roughly in proportion to population. Half of the members from each emirate are appointed by its Emir. The other half are elected by voters who are designated by the Emirs. For the last election, in 2019, there were 340,000 designated voters.

Each emirate enjoys a considerable degree of autonomy under its own ruler. Abu Dhabi is the largest emirate (87% of the overall land mass), it is the political capital and has more than 90% of the UAE’s oil reserves. Dubai is the second largest emirate and is the commercial and financial centre, plus a regional hub for a number of international companies.

Islam is the official religion of the UAE. But the constitution guarantees religious freedom, which is upheld. Arabic is the official language. But English is widely used.

The UAE’s population has seen fast growth and is estimated at around 10.7 million, of whom around 11.5% are estimated to be nationals while the rest are expatriates (including over 120,000 UK nationals).

The UAE is a member of number of multilateral organisations, including the UN, Arab League, the Gulf Cooperation Council (GCC), the Organisation of Islamic Cooperation (OIC), and the Organisation of Petroleum Exporting Countries (OPEC), the Non-Aligned Movement (NAM), the European Bank for Reconstruction and Development (EBRD), the Asian Infrastructure Investment Bank (AIIB), the World Bank, the International Monetary Fund (IMF), and the World Trade Organisation (WTO). The UN’s 2022 Human Development Report ranked UAE 26th out of 191 countries, and first among GCC countries. Women participate meaningfully in all facets of civil and political life. In December 2012, it became compulsory to include women on the boards of corporations and government agencies. There are nine women Cabinet Ministers, and 50% of the Federal National Council members are women.

2. Economic

The UAE is the 2nd largest Gulf economy, and the 30th largest in the world with the 16th highest GDP per capita in 2022 (estimated at $51,000). Accurate data on the economic split between emirates is limited but Abu Dhabi has the largest share of GDP, and when combined with Dubai accounts for the vast majority of the UAE’s economic output.

Following COVID-19, the economy has rebounded sharply due to higher energy prices but also an increase in investment and an early reopening to tourism which has returned to pre-pandemic levels. The IMF forecast further growth of 3.5% in 2023 and annual growth of around 4% for each of the next five years.

In 2022 the UAE’s fiscal-break-even oil price was around $55 per barrel, the IMF project this will remain broadly the same over the next two years. The current oil price exceeds $70 per barrel, and forward markets reveal markets expect prices to remain well above the UAE’s breakeven price. The resulting budget surplus is largely funnelled into sovereign wealth funds.

Sovereign wealth funds underpin financial resilience and direct investment within the country and globally to diversify the economy. The largest are Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (Mubadala), Investment Corporation of Dubai (ICD) and Abu Dhabi Developmental Holding Company (ADQ).

The UAE has the 6th largest oil reserves in the world and is the 7th largest producer with around 3.4mb/d over 2022. The Abu Dhabi National Oil Company (ADNOC), under the leadership of Sultan al Jaber, has ambitious plans to increase production to 5mb/d by 2027 by redeveloping and expansion of existing wells, and the development of marginal oil reserves.

The UAE is also a producer of natural gas but as domestic usage exceeds supply it imports gas from Qatar via the Dolphin pipeline. Akin to oil, the UAE is also seeking to expand gas production to become self-sufficient by 2030 and export LNG from an announced new site in Ruwais, Abu Dhabi.

In 2023 the third of four reactors at Abu Dhabi‘s Barakah nuclear power station started supplying the grid. Once complete, the power station is expected to meet up to a quarter of UAE electric demand. The UAE is also home to vast solar projects with very low costs of production. The UAE has set itself a target of 50% clean energy (nuclear and solar) by 2050 with the remainder coming from gas and coal with carbon capture. UAE also has significant plans to invest in waste-energy and blue and green hydrogen.

The UAE has made more progress than other countries in the GCC in diversifying its economy away from dependence on fossil fuels. The UAE has federal level diversification strategy and emirate level strategies or objectives to develop non-oil sectors. While hydrocarbons continue to provide the largest single source of income for Abu Dhabi, Dubai’s hydrocarbon reserves are far more limited, and its economy more diverse - based on a vision of Dubai as a global business, finance, logistics, media and leisure hub. Abu Dhabi is seeking to catch up with its Economic Vision 2030 setting a target for non-oil sectors to contribute 64% of Abu Dhabi’s GDP by 2030. It is positioning itself as a financial services hub (through Abu Dhabi Global Markets), manufacturing and industrial hub and tourist destination in its own right. The other emirates are each trying to carve economic niches, such as Fujairah’s importance as a bunkering hub or Ras Al Khaimah starting construction of the UAE’s first casino resort.

Priority sectors where investment is being steered to accelerate economic diversification include agri-tech, health and life-sciences, space, education and skills, circular and green economy, AI and the digital economy, financial services and fin-tech, logistics and advanced manufacturing. The UAE is also renewing its focus on fostering SMEs, start-ups, R&D, attracting FDI and being a distribution hub.

The UAE has also sought to diversify its tax revenues. It introduced VAT at 5% in 2018 and excise tax on tobacco and soft drinks. Taxes have been added to hotel charges, and to expatriates’ utility bills. Resident expatriates now pay a municipality tax related to rental values. Retail fuel prices are no longer fixed at artificially low levels, and are adjusted monthly in relation to oil prices. The UAE is set to levy corporate income tax of 9% from the financial year beginning on or after June 2023 albeit this will exclude eligible entities in free zones and other exemptions.

The UAE has made reforms to improve the business environment, it had risen to 16th in the World Bank’s Ease of Doing Business in 2020 and 25th in the 2019 World Economic Forum’s Global Competitiveness Index (indices are being revised so have not been updated recently). New visa and citizenship rules as well social reforms have been introduced to attract and retain high value expats and foreign investment. A green visa can be obtained for workers with specific skills, following significant investments or for skilled freelance workers. In 2023, the UAE government introduced a compulsory unemployment insurance scheme which will help support employees if they lose their job.

The UAE’s currency, the dirham, is pegged to the US dollar. To maintain this peg, interest rates track the increases by the US Federal Reserve. As of May 2023, the base rate of the UAE Central Bank is 5.15%. Changes to the base rate is then reflected in commercial lending.

Dubai commercial and residential property prices experienced a downward correction over several years due to oversupply. However, residential rents have recently been reported as increasing rapidly following increased demand. Broadly, inflation is comparatively low in the UAE with the IMF forecasting 2023 consumer inflation at 3.4%.

The UAE is also a significant source of direct and indirect investment for the UK. The UK Government works closely with the UAE Government at the most senior of levels to support strategic inward investment including through a £10 billion Sovereign Investment Partnership. Investment examples include DP World’s c.£2.7 billion investment in the UK (Southampton Port, London Gateway and P&O Ferries) and Masdar’s £4 billion investment into UK renewable energy (offshore wind and battery storage). Investments support UK Government policy priorities, such as powering up Britain, the energy security plan and the levelling up agenda.

3. Business and human rights

The UAE has acceded to nine Conventions of the International Labour Organisation (ILO) concerned with human rights, including the Convention for the Elimination of Forced and Compulsory Labour, and the Convention for the Abolition of Child Labour. UAE society is multicultural, and characterised by greater tolerance and openness than many other countries in the region. A large proportion of the expatriate population consists of migrant workers from South Asia.

In 2007, the UAE Ministry of Labour (now known as the Ministry of Human Resources and Emiratisation (MoHRE) released a report on ‘The Protection of the Rights of Workers in the United Arab Emirates’. It set out the UAE’s accomplishments in worker rights, while acknowledging the need to enhance capacity to enforce labour laws and fully protect the rights of workers. The UAE Cabinet has enacted a number of reforms to help combat abusive labour practices. For example, workers in all labour sectors have rights to transfer employer sponsorship; it is illegal for employers to withhold workers’ passports and debt bondage is illegal. All foreign workers have the right to file labour-related grievances with MoHRE. The last UN Universal Periodic Review of human rights in the UAE acknowledged the UAE’s achievements in human rights, but emphasised the need to ensure that labour laws are strongly enforced.

In 2013, the ILO voiced concerns over the sponsorship system (“kafala”). UAE labour law does not give workers the right to organise and to bargain collectively. There is a separate Domestic Helpers Law (2017) which sets out Domestic Workers’ (including agricultural workers’) rights. Standard working hours, annual and medical leave are set out for employers to adhere to. There is no minimum wage stipulated in the UAE labour law.

4. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to commit bribery anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national nor resident in the UK nor a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

According to the 2022 Transparency International’s Corruption Perception Index (CPI), UAE ranks 27th out of 180 countries.

The UAE ratified the United Nations Convention Against Corruption (UNCAC) in February 2006. The UAE is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The Federal Penal Code of 1987 is the main federal law which regulates anti-bribery practices in the UAE. Articles 234 to 239 of the Penal Code contain provisions which criminalise the acceptance of bribes by both public and private sector employees, and the bribery or attempted bribery of public sector officials.

The Business Anti Corruption portal page on UAE contains relevant information and advice, including procedures for protecting your company from corruption.

Read information about the British Government’s anti-bribery policy.

5. Terrorism threat

Read the information provided on our Terrorism threat page FCDO travel advice.

6. Protective security advice

The Centre for the Protection of National Infrastructure also provides protective security advice to businesses.

Read the information provided on our Protective security advice page FCDO travel advice.

7. Intellectual property

As a major trading hub, the UAE is exposed to a significant trade in counterfeit goods, particularly fast-moving consumer goods, and other intellectual property (IP) right infringements which cover a vast array of products and industries. However, there is an increasing focus on protecting IP rights within the UAE, with various consultations, IP forums and IP awareness initiatives taking place.

The UAE is a member of the World Trade Organization and, as such, is obliged to comply with the provisions of the World Intellectual Property Organization Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which sets minimum standards for the protection of IP. The UAE is also a signatory to the main IP treaties and conventions (including the Paris Convention, Berne Convention, Patent Cooperation Treaty and Rome Convention).

While UAE IP laws are issued at a federal level and registered rights cover all Emirates, each of the seven Emirates has its own jurisdiction for enforcement.

In terms of copyright, Federal Law No. 7 of 2002 protects various types of literary, artistic, dramatic and musical work. Registration is not required to achieve protection, but it is possible to register works by way of an application to the Copyright Office at the Ministry of Economy. As the UAE is a party to the Berne Convention on the Protection of Literary and Artistic Works, any works created by nationals of other Berne Convention states will be recognised in the UAE.

In terms of trademarks, Federal Law No. 37 of 1992 (as amended by Federal Law No. 8 of 2002) and its implementing regulations govern the protection of trademarks which are registrable with the UAE Trade Mark Office.

In terms of patents, the UAE will permit patents for new inventions where the idea is based on scientific principles and is capable of industrial exploitation. The role of the GCC Patents Office based in Riyadh is currently under review and the office may be closing, but at time of publication its future is unknown. The UAE, as a contracting state for the Patent Cooperation Treaty, also allows the application for patent protection simultaneously in each of a large number of countries by way of an ‘international patent application’.

Enforcement can take several forms (typically resulting in a fine, with prison sentences remaining rare) and specialist legal advice is recommended before taking action.

Ministry of Economy

PO Box 901, Abu Dhabi, UAE
T: (+971) 2 6131111
F: (+971) 2 6260000

Refer also to the website of the World Intellectual Property Organisation (WIPO) and the information provided on our intellectual property page

8. Organised crime

The UAE’s developed business sector and generally well-off society presents an attractive target for cyber criminals. Although UAE institutions are active and successful in raising awareness of the threat, companies and visitors should be aware of their cyber vulnerabilities, particularly to phishing attacks by email. The UK’s National Cyber Security Centre’s guidance is an excellent starting point. There are also several UK companies that have offices in the UAE and offer cyber security services to businesses.

Read the information provided on our organised crime page

9. Government support

The government can provide finance or credit insurance to support exports where at least 20% of content is from the UK through UK Export Finance – the UK’s export credit agency. For up-to-date country specific information on the support available see UK Export Finance’s country cover policy and indicators

10. Contact

For more information on doing business in the United Arab Emirates, contact the specialist Department for Business and Trade team.