Dubai Demonstrates Commercial Commitment

Dubai has been ranked top in the Middle East Cities of the Future
GDP predicted to grow further in 2010
Government of Dubai confirms support of Dubai World debt restructuring

Dubai continues to dominate as one of the world’s most popular destinations for commerce and foreign direct investment, reinforcing its position as a global hub for business. With world-class infrastructure and highly attractive incentives Dubai’s commercial offering remains compelling to international investors.

Dubai has become an important international centre for investment, with a number of positive developments underway. Furthermore, the Government of Dubai has confirmed it will be supporting Dubai World’s debt restructuring by investing up to $9.5 billion (approx. £6.38 billion) into the company. This move reinforces the Government’s commitment to the long-term vision of Dubai, and will ensure work continue on major Nakheel projects. Of this, $8 billion (approx. £5.37 billion) will be invested into the real estate developer, and the remaining $1.5 billion (approx. £1 billion) into parent company Dubai World. And, this move has been backed by Royal Bank of Scotland chief executive, Stephen Hester who comments that "As one of the lenders to Dubai World, we view the recent debt restructuring offer as a positive development…In the overall context of Dubai's global credit standing, the move has sent out the right signals."

The global economic downturn has inevitably had an impact on the emirate, but Dubai’s economy is weathering the storm. There is optimism that the emirate will benefit from its first-mover advantage to reinforce its position as one of the world’s most trailblazing and competitive destinations. In fact, according to the Minister of Economy the UAE is expected to record a GDP growth of 3.2 per cent in 2010, an increase from 1.3 per cent in 2009.

Confidence is returning to the emirate as is demonstrated by recent figures from fDi Markets highlighting that the UAE continues to attract more than half of the FDI projects in the Gulf Co-operation Council region. At the end of last year there were 363 FDI projects underway, more than the total number of projects in 2007. And, with this investment comes not only a significant financial resource, but also the knowledge inflow to the region by the incoming ­business.

Dubai has been ranked top in the Middle East Cities of the Future (source fDi magazine), scoring the highest points for economic potential, business friendliness, infrastructure and quality of life, making it the perfect environment for businesses setting up in the region. And, from a global perspective, it is clear that international investors are continuing to show confidence in Dubai, with the UEA ranking as the 11th top FDI destination in the world.

And, the emirate’s new Federal Foreign Investment Law is expected to be implemented in 2010. This legislation is anticipated to attract further foreign investment into Dubai by offering incentives to businesses, paving the way for 100 per cent foreign ownership of companies.

Attracting international investors is important for Dubai and one of the central areas of focus for Dubai’s Government is to ensure that the emirate serves as a robust and business-friendly destination. Last year saw the opening of the Dubai Metro, and this is set to expand in 2010, enhancing access within the city. In addition to this, the world’s tallest building, the Burj Khalifa opening at the start of 2010 and the phased opening of Al Maktoum International Airport (the world’s largest) this year will all add to Dubai’s advanced infrastructure, continuing to make it an appealing destination for investors as a centre for trade and services and as an international commercial hub.

Dubai features over 30 free zones with unique benefits to businesses locating to the region. These sector-specific clusters are treated as “offshore”, allowing for myriads of benefits to be offered to businesses located there, including 100 per cent foreign ownership, 100 per cent repatriation of capital, and profit and no corporate taxes. The concept of ‘convenience’ – with every facility under one umbrella – also allows for more efficient and cost-effective distribution.

Ian Scott, director UK and Ireland for DTCM, commented: “Dubai is the epitome of a world-class business destination. The Government of Dubai is committed to ensuring that the emirate continues to thrive, with ambitious growth plans and a diversification strategy, making it a highly attractive option for both regional and international investors. Dubai’s progressive infrastructure, first-class facilities and appealing incentives means it is the perfect location for international commerce and reinforces its position on the world economic map”.