The United Arab Emirates has made a mark for itself as the favourable business centre in the middle east as well in the global market. The UAE has witnessed an increased influx of global business giants which has improved the country’s reputation as the best investment destination. The United Arab Emirates offers an attractive environment for conducting business attributed to the country’s diverse business opportunities and the liberal lifestyle of its citizens. Apart from hydrocarbon investments, other sectors that offer opportunities for potential international investors include; construction, manufacturing, tourism, entertainment, education, financial and trade services, and health services to name but a few.

Government efforts to reduce the cost of doing business in the United Arab Emirates

The ease of doing business in the United Arab Emirates has improved recently following reforms undertaken in critical areas of the economy to eliminate the ambiguities that hinder investor confidence. The reforms initiated by the UAE government were however not realized overnight but has been a culmination of a long-term process spanning over ten years. In 2008, for instance, publication of companies by the Department of Economic Development set the foundation for easing the procedures for starting a business. During the same period, the country regulated the labour market by abolishing the demand for severance payments. In 2009, the UAE revamped access to credit information where a new credit bureau was established with the aim to collect data on all loans while it guaranteed borrowers the right to check their credit information from the new bureau.

The same year, the UAE introduced electronic filing of court documents, coupled with enforcement of contracts which made doing business in the United Arab Emirates more relaxed. By the year 2010, the UAE had abolished the minimum capital requirement and by so doing, simplified the registration process through the elimination of preconditions such as proof of deposit of capital and this favoured investors willing to start a business in the country. The same year, the UAE improved the online system for obtaining building and completion certificates as well as non-objection permits.

These improvements lessened the time taken to acquire vital construction documents. The government also made cross-border trade much more accessible by increasing container capacity at the Dubai terminal and at the same time eliminated the terminal handling receipts while it reduced the cost of trade and finance products all which drastically improved the cost of doing business in the United Arab Emirates.

In 2011, the government made strides in the financial and trade sectors where it abolished the minimum capital requirement and simplified documentation requirements for registration, as well as eliminated the show of proof of deposit of capital. The Mirsal 2 Dubai Customs’ comprehensive customs system was launched, which led to a reduction of time to trade facilitated by streamlined document preparation.

In 2012, requirements to file company documents with the Department for Economic Development, as well as obtaining a trade license and registration with the Dubai Chamber of Commerce and Industry were merged. This development made the process of starting a business in UAE much easier. During the same period, the UAE enacted a law that allowed the establishment of a federal credit bureau under the supervision of the central bank and thus improved credit information system.

In 2013, the UAE eliminated the requirements that required companies to prepare a name board in English and Arabic after receiving clearance on the use of office premises which consequently simplified the process of starting a business. The UAE in conjunction with the Dubai Electricity and Water Authority introduced an electronic application process that allowed customers to submit and track their applications online and consequently reduced the processing time during applications. The government also established an online ling and payment system for social security contributions which made the process of paying taxes easier for companies doing business in the United Arab Emirates.

In 2014, the UAE eliminated the requirement for site inspection and also reduced the time required to provide new power connections, a development that made getting electricity more accessible for both domestic and commercial use. Operating hours at the land registry were increased while the process of transferring fees was reduced which made the transfer of property much more manageable. Minor investor protection was strengthened following the introduction of more significant disclosure requirements for related-party transactions in the annual report as well the stock exchange which made it possible for directors to be sued when transactions of such nature harm the company and in the process protecting minority investors. The rights of minority investors were highlighted further in 2015 where additional approval requirements for related-party transactions and higher standards for disclosure of involved transactions to the stock exchange were introduced.

The approval requirements allowed directors to be held responsible in a related-party transaction that constitutes a conflict of interest while it made it possible for shareholders to participate in the scrutiny of documents about a related-party transaction. Minority investors doing business in the United Arab Emirates were empowered to appoint auditors to inspect transactions and to make requests for a rescission of the deal in case it proved to be unfair. New service centres were introduced as well as a standard contract for property transactions which eased the process of property transfer. The credit bureau services were improved allowing access to credit information and thus enhanced exchange credit information with a utility.

The year 2016 saw the protection of minority investors further enhanced as subsidiaries were barred from acquiring shares in their parent companies while requiring that potential acquirers, upon attaining over 50% of the capital in a given company have the right to make a purchase offer to all shareholders. The process for obtaining the civil defence approval was streamlined and as a result, simplified the process of acquiring construction permits.

The same year, enforcement of contracts was made easier following the implementation of electronic service of process. A new case management office was introduced within the competent court resulting to “Smart Petitions” service that allowed litigants to file and track motions online. In 2017, the UAE reduced the duration of a single term contract from 4 years to 2 years. Shareholder rights and roles in major corporate decisions were also increased, which led to clarification of ownership and control structures while requiring greater corporate transparency and consequently strengthened the protection of minority investors. Increased transparency at the land registry made the process of registering property much more manageable.

The UAE drastically reduced the time required to acquire new power connection through the implementing a new program that involved adherence to strict deadlines for reviewing applications, carrying out inspections as well as meter installations. Implementation of compensation for power outages which is a significant boost to potential investors planning to get connected to electricity. The merging of the final inspection into the process of obtaining a completion certificate has made the process of dealing with construction permits easier.

The year 2018 has witnessed improvements in accessing credit information through the provision of consumer credit scores to banks and financial institutions and an adoption of an insolvency law that facilitates a continuation of the debtor’s business at a time when insolvency proceedings are underway. Streamlining of the connection process and elimination interactions between the customer and the utility to obtain external works coupled with the elimination of the security deposit for connections below 150 kVA has made it easier for investors doing business in the United Arab Emirates to get connected to electricity.


The UAE has maintained consistency progress in areas that make doing business in the United Arab Emirates more friendly. Improvements in the process of acquiring construction permit, easier power connectivity, property registration, regulation of labour market, access to credit, and protection of minority investors. This commitment by the UAE government has resulted in practical policies being implemented and as a result, attracted direct foreign investment in large volumes. The UAE sets an excellent example that emerging economies should apply to realize economic success.

Source: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates