NAME OF THE UNIVERSITY

FACULTY NAME

COURSE NAME

Why Dubai is an attractive city for international business

Done by: ……………………

ID: …………………………..

1 Abstract:This report investigates the grounds for the foreign investors and businessman to invest their

capital in Dubai. The report involves the strategic importance of Dubai, policies of its

Government to enhance investment opportunities, Dubai standing in global context and its

significance in UAE. A brief history of how the uninhibited desert adopted the world-class

infrastructure and becomes a global hub for tourism, transport and trade is given. The conduct of

liberal and moderate government and welcoming and warm-hearted behavior of the people

facilitated a great deal in this regard. Economic and Political steadiness, Independent Economic

system, world-class infrastructure, cheap cost structure, high quality living standards, wide

choice of potential partners, wide-ranging foreign trade network, rapidly growing production

sector and Availability of manpower at reasonable cost are illustrated as the factors to attract

investment in Dubai. Some facts and figures regarding development are given to support the

claims.

2

TABLE OF CONTENTS 1 Abstract:...................................................................................................................................2

2 Introduction:.............................................................................................................................4

3 Why Dubai:..............................................................................................................................4

4 Major attraction for Business in Dubai:...................................................................................5

4.1 Political stability:..............................................................................................................6

4.2 Economic Stability:...........................................................................................................6

4.3 Liberated and Independent Financial System:..................................................................6

4.4 High level Infrastructure:..................................................................................................7

4.5 Viable Cost Structure:.......................................................................................................7

4.6 Luxury Life, Exceptional Living Environment:...............................................................7

4.7 Open Variety of Potential Business Partners:...................................................................8

4.8 Wide Global Trade Network:............................................................................................8

4.9 Rapidly Growing Industrial Sector:..................................................................................8

5 Dubai Global Status:................................................................................................................9

6 Initiation of Development:.....................................................................................................11

7 Master Plan of Dubai:.............................................................................................................12

8 Progress in Global Context:...................................................................................................13

9 Conclusion:.............................................................................................................................15

10 References:.........................................................................................................................16

3

2 Introduction:

The purpose of the report is to prove the fact that Dubai is attractive for business and support this

statement by help of some facts. By analyzing a range of journals, articles, books and statistics of

government institutions on the topic of Dubai economy, industrialization and other developments

this report determines the main factors supporting commerce in Dubai.

Dubai has radically changed over the period of last thirty years. It has become a major business

state with sustainable and branched out economy. Especially over last ten years Dubai has

noticed enormous economic development as a result of urban development that converted the

uninhabited desert of Dubai into commercial, residential, economic and tourist state. Dubai has a

major benefit of its crucial strategic location and it is the largest exporter of imported goods in

the Middle East. (Maceda, 2013)

Dubai offers low trade-offs and operational expenditures because of its strategic position.

International stance and policies of a moderate government are pulling investors in massive

amount. Trade, production, commerce, tourism, construction and infrastructure activities are

expanding in steady way. These activities facilitated the economy of Dubai to attain a high level

of development and uphold.

3 Why Dubai:The special feature of Dubai is mini cities within it like Dubai Fest City, Dubai Deira City,

Dubai Sports City and Health City. The degree of construction can be determined by the report

that 25% of the cranes function in Dubai (Badouri, 2007). The fast urban development in Dubai

has grabbed the attention of economic experts and ecologists. Yet, the information related to

development in the city has kept in secret. Hence, the current study provides us with an

opportunity to determine an accurate technique for computing urban development. Urbanization

generally occurs as a result of aspects like industrial growth, economic stability and population

increase (Dona J. Stewart, 2004). On the other hand, urbanization can be controlled by a variety

of aspects like land possession barrier and barriers like coastlines. (Taubenböck, 2009)

4

The factors that create an ideal investment environment for local and international business are

mixture of cost, promotion and environmental benefits. Actually these benefits not only positions

Dubai as the Gulf’s chief versatile commerce centre but they puts it at the front position of the

world’s versatile and developed economies. In recent years, Dubai has become a major location

for a variety of emergent, commercial industries and activities:

Conferences, conventions, fairs

Commercial regional control centers

Banking and investment

Business consultation

Information Technology

Tourism

 These all achievements were attained because of hospitable behavior of citizens, world class

services and great infrastructure. The positive role of moderate and liberal government was a

major factor too. The vision to progress and expand economy through foreign investment and

infrastructure after constantly decreasing oil revenues made it all possible.

4 Major attraction for Business in Dubai:Strategic Position: Dubai is a bridge connecting East and Europe on East-West centre and

Commonwealth States and Africa on North-South centre. It is the entrance to the market which

is:

Huge: Dubai has deep-rooted trade connections with Middle-Eastern countries, Gulf,

Common-wealth states, Mediterranean countries, Africa, Central Asia and South Asia.

Developing: Trade with international countries has been growing substantially from

last 30 years. In recent years, despite of world economic crisis, there has been a boost in

Dubai’s trade. According to a report, there has been an annual increase of 11% in Dubai’s

trade since 1988. (Development, 1988-2014)

5

Affluent: Dubai is an economy having enriched with natural resources as well as great

infrastructure. Its strategic locality makes it even more significant. Dubai is the major

provider of Agri-Export merchandise.

Reachable: Dubai is connected with more than 135 countries and states through

more than 120 shipping and 80 airline companies.

4.1 Political stability:

UAE is a political stable country. The government consists of President, Prime Minister, Federal

Supreme Council and Federal National Council. The Judicial system is extracted from civil law

system and Sharia. Every state has its own executive councils. Administration is usually handles

by autonomous councils for each department. The politics is banned in the country.

4.2 Economic Stability:

UAE is economically and fiscally stable country. It is considered as least corrupt country in the

Middle East. Unemployment is as low as 2% in the country. Dubai being the most important part

of the country enjoys the special treatment. The government has provided clear legal structure

for business and well-defined list of owner ship rule. Non-citizens are allowed to own

possessions only in certain areas. They are allowed ownership rights of max up to 49% for

limited liability organizations and up to 100% for professional organizations. (Holmes, 2014)

4.3 Liberated and Independent Financial System:

To pull investors and businessmen economy of Dubai has been kept liberated and open.

Government directives and control has been kept on commerce activities as minimum as

possible. No direct taxes are applied on commercial profits and private incomes. Custom duties

are as low as 4 % with a lot of immunities provided. Total transfer of wealth and gains are

allowed. Moderate visa-policies allow effortless import of foreign labor and skilled worker from

all around the globe. (Gilani, 2007)

4.4   High level Infrastructure:

Dubai’s on purpose strategy to invest a great deal in transportation, communication, road

network, energy and business infrastructure has facilitated it to become one of the finest

6

countries of the world in the field on infrastructure. Furthermore, it helped it a great deal in its

current affluence as well as helped as a magnet to attract international business. Dubai has got a

wide network of 7 industrial states, 1 business park and 3 technology parks, 2 high class harbors,

a world class airport and a world class motorway network. It also provides the facilities of high-

tech telecommunication network and dependable power utilities at cheap costs.

4.5 Viable Cost Structure:

Foreign organizations initiating their setup in Dubai can get major cost benefits not usually

available in the world. The chief aspects are:

Not any foreign exchange restrictions

Not any trade obstructions

No allotted quota system

Low duties and taxes

Reasonable Labor costs

Skilled labor and workers availability

Reasonable Energy prices

Competitive property prices

High level liquid assets (crude oil) available in the market

Competitive sponsorship costs

No commerce or business profit taxes

No private income taxes

4.6 Luxury Life, Exceptional Living Environment:

Private sector in Dubai has invested a great deal in property like Hotels, Apartments, Residential

buildings, Commercial buildings, amusement parks and other relaxation facilities. A lot of other

aspects made their contribution in adding more luxury to this high quality of life and great living

environment. Those aspects comprise of exceptional infrastructure services, low crime rate, clean

conditions, warm and tolerable people, sophisticated life style, moderate and liberal government,

warm climate and world class beaches.

7

4.7 Open Variety of Potential Business Partners:

The regional community has a wide experience of commercial and industrial activities and

experience to international business and modern technologies. Regional industrialists have

thriving business experience with multinational organizations in diverse economic segments.

4.8 Wide Global Trade Network:

Dubai has an enormous foreign trade network reaching to almost 180 states around the world and

therefore presenting the investor with a wide selection of possible international marketing

channels for a varied collection of services and goods. Dubai is the world 3rd largest exports and

re-exports center, Hong Kong and Singapore being the first two.

4.9 Rapidly Growing Industrial Sector:

Dubai has made huge profits in the production and export sector. Among non-oil sector, the

production growth ratio is 2nd fastest in the country. This steady performance depicts the

government’s serious investment in the manufacturing sector. The major manufacturing and

exports are:

Aluminum Blocks

Metal Products

Textile

Garments

Jewelry

Ready-to-Eat food

Electronics

Petroleum

Chemicals

Non-metallic Mineral products

Agriculture Machinery

8

5 Dubai Global Status:In comparison with chief cities of West where the evolution from pre-industrial to industrial and

industrial to post-industrial status took place over a phase of 2 centuries, Dubai has experienced

a similar radical change in only 50 years. In 2003 IMF and the World Bank decided to summon

their conference in Dubai deliver testament to the city states curious evolution from a trivial

fishing contract on the Gulf to a cultured leading 21st century city in region (World Bank Group

& Inernational Monetary Fund, 2003). The real-estate consultant Jones Lang LaSalle indicated

the developing international standing of the city, together with Los Vegas and Dublin, as 1 of the

3 most flourishing cities of late 90’s as calculated by financial development and property related

activities. Dubai’s GDP rate is over 5 times of Oman while its unemployment ratio is under half

of unemployment rate of Egypt. Moreover, Dubai has over 5 million visitors per year, and it is

currently a more visited tourist destination than |India, Malaysia and Egypt having natural and

historical beauty. (Molavi, 2004).

9

Figure 1. Variety of business sectors in Dubai

Table 1 Distribution of Jobs in Dubai

10

6 Initiation of Development:Over recent few decades the financial evolution of Dubai has been perused by major alterations

concerning its populace configuration and structure of urban growth. This document shows the

key forces and developments forcing the financial, communal and physical evolution of Dubai;

observe the major progress in the state’s, framework and future guidelines for urban

development in the city.

The genesis of the modern city of Dubai is established in region’s tribal background and political

record. In the 18th century, the southern region of South-east Oman was inhabited by the Bani-

Yas tribe whereas their historic opponent the Qawa-sim colonized the north region of Dubai,

(Ras-al-Khaimah & Sharjah now).Having the British collaborating them, the Bani-Yasthe age

was noticed by a effort for marine dominance of the Gulf among the two tribes. In answer to

assaults on the EIC( East India Company) shipping and the resultant interruption of trade with

sub-continent, a British mission was sent to conquer the Qawa-sim in 1819. Consequently, so as

to secure their place, the British needed the sheikh leaders down the shore of South-west Oman,

as well as sheikhs of Bani-Yas to sign a Peace Pact. This pact not only protected the trade path to

sub-continent but also facilitated the pearl industry of the Middle-East to boost, to the advantage

of Dubai (Kazim, 2000).

In 1833, a political revolution of considerable significance for the development of Dubai arised

when a faction of about 800 people of the Al-Bu-Falasah division of the Bani-Yas clan split from

Abu Dhabi because of a conflict with the leader and step to form an autonomous sheikh-dom in

Dubai. This group was headed by Maktoum bin Buti until his death. |Extensively, all following

rulers of Dubai are collapsed from the Maktoum family that has put forth enduring and

exceptional impact on the progress of the city . In 1967 a 2nd major decision that influenced on

Dubai’s after-war development was the decision of GB (Britain) to remove its forces from the

region. This indicated the extinction of the alliance in South-west Oman. Following this, on

December 1st, 1971 a new political unit of the UAE came into existence. It includes the previous

sheikhdoms of 7 states of current UAE. Even though the capital on UAE is Abu Dhabi, Dubai

experienced the major developments in urbanization and consequently economic sector.

11

7 Master Plan of Dubai:Strategic plan of Dubai is to achieve the position of developed and progressed economy. This

objective is being followed within a background of designed economic development by

implementing various tactics that includes modernization of manufacturing, investment

advertizing and diversification. The transformation to greater value-added production is apparent

in Jebel Ali free-zone (Merchant's role in a changing society, 1998). Efforts has been made by

government to draw attention of more hi-tech industries (mobile and computer companies) and

to clear out manpower based industries,(textile, building material, garments). Therefore, in the

year 2000, production resulted in 17% of GDP(ranked 3rd in the country). A part from production

and distribution sector, there is a lot of investment in producer services and import/export. The

trading corporations import goods from international markets and re-export them to regional

markets. In the last decade, Dubai’s administration stressed a great deal on attracting investors in

real-state sector (restaurants, hotels, resorts, apartments). According to the statistics “ Between

1993 and 2000, the number of hotel rooms in Dubai increased by 37% from 18,638 to 25,571,

and number of hotel beds by 32%, from 31,267 to 41,226”. The recognized significance to the

tourism is depicted by construction of 7-star Burj-ul-Arab hotel in the city. Other luxury

development projects comprise of “The Palm Jumeirah, (a $1.5 billion development of man-

made islands in the Gulf to provide 10,000 exclusive residences, 40,000 hotel rooms, and

shopping and entertainment facilities); Dubai Marina, and _The World_, (another Gulf island

development consisting of 300 private islands arranged in the shape of a world map—with

_Britain_ having already been sold for £18 million)” and the skyscraper Burj Khalifa, as shown

in Figure 2.

12

Figure 2 The skyscraper Burj Khalifa

8 Progress in Global Context:Dubai has transformed into a city of great reputation in the region, with an aim to now become a

significant city in the world financial system. The city’s development has been keyed up by a s

relationship between international and regional factors rooted within a specific geographical and

chronological background. Development of the city also settles the convergence and divergence

argument about modern urban development by representing the logical relation between the

13

localization (e.g. demography, past and beliefs), and globalization, (financial, political and

educational), in the creation of the urban atmosphere (Smith, 2001)

From international perception, the capitalist system - which prevails in the world – is concerned

with economic growth and controls the urban schema. However, this idea is followed distinctly

in different philosophical and intellectual backgrounds that differ from the economic moderation

of the America to the national industrialization of Asia. As diverse civilizations accept capitalism

in different manner and to different scale, different cities follow different progress routes that

depict the dealings of global forces. (Thornley, 2005)

A major global force that favors some type of congregating urbanization, is the modest global

atmosphere influenced by economic globalization that forces administrators to take measures to

make sure that their city remains striking for the investors. This competitive importance is

evident in city sponsorship and advertising policies and is adopted by almost all large cities.

Regarding physical progress affects the aspiration to draw attention of multinational firms and

expert service functions directs to stipulation of high tech office, amusement and domestic areas

to provide for the requirements of footloose capital.

Mega-projects of Dubai embody some most impressive developments all around the globe.

Tourism has now developed into a major financial development segment in the world economy. -

Development based on real-state has revolutionized the economy of different countries and

affected the physical framework of many cities all over the world. Dubai with its attractive flora

and fauna environment has become the top tourist destination in the Gulf. Hotels, restaurants

and shopping malls, trade centers, conference services and amusement parks have been built in

order to increase the city’s image as a major luxury destination for tourists. Metro transit

systems, modern airports and road infrastructure are developed as a result of enhanced global

tourist pressure.

14

9 Conclusion:On the basis of findings, facts and figures and various factors supporting business in Dubai, we

can infer that Dubai is an attractive place for international business. Like most of the modern

cities throughout the world, Dubai has established its place within the global economy. It has

overcome the challenge of offering ample infrastructure in a background of rapid urbanization. It

has developed significantly over last 30 years and progressing with even rapid pace. It has done a

great deal of work in providing foreign as well as local investors and businessman, proper

infrastructure and facilities to run their business in a comfortable yet profitable environment. Its

deep rooted trade links with Middle-Eastern, CIS, , Mediterranean countries, Africa, Central

Asia and South Asia attracts foreign investments by a great deal. Of all the factors discussed

above; industrial growth, competitive costs, world class infrastructure and economic stability can

be illustrated as well-supported arguments and factors to support the topic.

15

10 References:

Badouri, S. (2007). Construction Boom In UAE & Saudi Arabia.

http://www.mbam.org.my/mbam/images/@BOOM%20UAE%20%2880-92%29.pdf.

Global Investments Network.

Centre, D. S. (2000). TOTAL POPULATION, BUILDINGS, HOUSING UNITS &

ESTABLISHMENTS IN CENSUSES - EMIRATE OF DUBAI.

Development, D. o. (1988-2014). Dubai Trade Statistics 1988-2013. Abu Dhabi:

Government of Dubai.

Dona J. Stewart, S. M.-Y. (2004). Assessing the Spatial Structure of Urban and

Population Growth in the Greater Cairo Area, Egypt: A GIS and Imagery Analysis

Approach. sagepub, 95-116.

Gilani, B. E. (2007). Selling the Desert. International Journal of Business Research.

Holmes, J. (2014). Dubai Economy Overview. Street Directory.

Kazim, A. (2000). The United Arab Emirates A.D. 600 to the present. Abu Dhabi.

Maceda, C. (2013). Dubai, Abu Dhabi strong policies lure investors. Gulf News.

Merchant's role in a changing society. (1998). The case of Dubai 1900-1990 Middle

Eastern studies, pp. 87-102.

Molavi, A. (2004). City on a Hill. 100 Years New Republic.

Smith, M. (2001). Transnational Urbanism Locating Globaization. In Blackwell. Oxford.

Taubenböck, H. (2009). Urbanization in India – Spatiotemporal analysis using remote

sensing data. Computers, Environment and Urban Systems Volume 3, 178-188.

Themalaymailonline. (2014, October 28). Malaysia keen to cooperate with Dubai on

global economic islamic hub. Kualalampur, Malaysia.

Thornley, P. N. (2005). Planning World Cities.

16