UNITED ARAB EMIRATES

Key facts and figures

BUSINESS CONDITIONS SNAPSHOT • Population: 10.4 million
• The United Arab Emirates (UAE) is experiencing (2018)
a double shock to the economy from the impact • GDP growth: 1.6 per cent
of COVID and the drop in global oil prices. (2019)
• GDP per capita:
• As the most diversified economy in the Gulf, US$37,749.9
COVID has had a significant impact on the • Political system:
UAE’s non-oil sectors of transport, tourism and Constitutional monarchy
hospitality, real estate and retail. The UAE • Two-way trade: A$11.15
Federal Government and individual Emirates billion
have moved to implement a range of stimulus • Key products: crude
measures including tax cuts, higher subsidies petroleum, meat, telecom
for water and electricity, and strengthening equipment, vehicle parts,
business development programs. refined petroleum, copper,
• The UAE Central Bank has rolled out a support transport and personal
package including collateralised loans to banks, travel
postponed loan repayments, reduced reserve • Two-way investment:
A$14.5 billion
requirements, and easing of prudential
standards for SME loans.
• The strict lockdowns and border closures of the second quarter of 2020 have been
largely lifted, and the non-oil economy has started recovering and stabilising. The
UAE Central Bank expects non-oil GDP to contract by -4.5% in 2020. As the UAE
cuts oil production in line with OPEC agreed targets, oil output is expected to be
down -7.5% year on year in 2020. The UAE’s oil and non-oil sector recovery is
intimately tied to international developments.
• Australian businesses have proven resilient by managing risks, adapting business
plans and identifying new opportunities. The UAE remains an attractive location
for Australian business to base themselves for local opportunities, as well as
market diversification across the Middle East and Africa region. The normalisation
of relations between the UAE and Israel opens direct transport links between the
two countries, and provides new market opportunities for Australian companies
established in the UAE. The normalisation also opens the door for trilateral
cooperation between Australia–Israel–UAE.
• The UAE’s long-term economic strategy is centred on diversification away from oil
and the increased promotion of the private sector. The UAE’s seven emirates
have put in place a wide range of initiatives, laws and regulations to develop a
more conducive environment for foreign business and investment.  The UAE has
established itself as the primary regional trade and investment hub. 
• The UAE’s relative political and economic stability and fast-growing capital
markets contribute to its attractiveness as both a place to invest and to operate
businesses with a regional focus. While the UAE has a five per cent value-added
tax on most products and services—as well as an excise on certain products—
the absence of corporate and personal income taxes is attractive for businesses,
investors and highly skilled employees.
• In July 2020 the UAE announced a new Minister and Ministry of Industry and
Advanced Technology to further diversify its economy. The Ministry is developing
a strategy to boost the industrial sector by increasing local value-add, efficiency
and competitive edge, and to develop local advanced technology.
• The impact of COVID on food supply chains and the rapid and significant
disruptions in air cargo capacity highlighted the UAE’s food security vulnerabilities.
The UAE has sharpened its efforts on food security and is pursuing partnerships
and investments in R&D, aquaculture and agritech.
• The UAE will host World Expo in Dubai from October 2021. Pre-COVID estimates
expected 25 million visitors, of which 70 per cent would visit from outside the
UAE. The roll-out of a COVID vaccine would boost visitor numbers and have a
positive impact on the UAE economy.
• The UAE population of around 10 million normally consists of 10 per cent Emiratis
and 90 per cent expatriates. The economic impact of 2020 has resulted in
significant worker lay-offs and expatriate departures—the population is expected
to decline which will have a negative impact on domestic consumption.

TRADE AND INVESTMENT OPPORTUNITIES

• Australian business is well supported in the UAE with an in-market presence from
DFAT, Austrade, and five state commissioners – New South Wales, Victoria,
Queensland, Western Australia, South Australia.
• There are an estimated 250 Australian companies in the UAE focused on agriculture
and food, trade and services in education, construction, engineering, architecture,
food and beverage.
– Companies successfully use the UAE’s location, logistics, financial and other
services as a hub for commercial activity across the Middle East and in Africa.
• Sectors that offer the best opportunities for Australian capabilities are education,
agrifood, digital technology, health, defence, infrastructure and resources (oil and
gas).
• The new UAE Ministry of Industry and Advanced Technology announced in July
2020 that it was developing a strategy to further diversify the UAE economy.
– This may open new commercial opportunities in 2021.
• The Abu Dhabi Investment Office and Dubai FDI are streamlining procedures and
providing support packages to foreign companies looking to establish or expand in
the UAE.
• In March 2020 the UAE Cabinet also issued a resolution outlining 122 sectors and
activities in which 100 per cent foreign ownership of a company is permitted,
without the requirement to have a local partner.
– However, a ‘negative list’ of sensitive sectors remain closed to 100 per cent
foreign ownership.
• The UAE is a proponent of free trade, but non-tariff barriers are emerging in certain
sectors, particularly in the agri/food import sector.
– In recent years the UAE has moved to implement new standards, quality marks
and labelling requirements, which can drive up costs and administrative
requirements for importers.
– Notwithstanding the GCC Standardization Organization (GSO), there is increasing
fragmentation across GCC member state approaches to standards.
• UAE investors (sovereign wealth funds, family offices and high net worth
individuals) hold significant investments in Australia across infrastructure, utilities
and waste-to-energy, real estate, tourism and hospitality, and via private equity.
– Investors are attracted to the quality of assets and Australia’s robust investment
policy settings.
• The UAE will host World Expo in Dubai from October 2021 to March 2022.
– The Australian pavilion will showcase Australian ingenuity and innovation, and
there are opportunities to pursue trade and investment opportunities through a
targeted business program.
• The UAE also hosts several annual or biannual large international trade and
investment events, including Gulf Food, the International Defence Exhibition and
Conference (IDEX), the Abu Dhabi Petroleum Exhibition and Conference, Arab
Health, GITEX Technology Week, and the Annual Investment Meeting (AIM).
– The events attract large, international audiences and provide opportunities for
Australian companies to showcase and market their offerings, and to network
with government and industry.
– Due to COVID, the events are being run virtually or as a hybrid model.

TRADE POLICY FOCUS

• The Australia–UAE Joint Economic Committee is a ministerial-level platform to
advance trade, investment and commercial priorities.
– It is also a mechanism to resolve trade obstacles.
• Australia–UAE FTA negotiations stalled in 2009 following a GCC decision that
member states would negotiate future FTAs as a bloc.
– GCC FTA negotiations have been at a standstill since 2009.
• The GCC has signed two FTAs.
– These are with Singapore in 2008 and the European Free Trade Association
(Iceland, Liechtenstein, Norway and Switzerland) in 2009.
• The UAE has been a member of the WTO since 1996 and a member at the GATT
since 1994.

Disclaimer
The Department of Foreign Affairs and Trade (DFAT) has taken great care to ensure the
information contained in this publication is correct and accurate.
DFAT does not guarantee, and accepts no legal liability arising from or connected to the
accuracy, reliability, currency or completeness of any material contained in this publication.
Readers should exercise their own skill and care in using the material contained in this
publication and carefully evaluate the accuracy, currency, completeness and relevance of the
material for their purposes.
Insights current as at December 2020.