|
Country name: United Arab Emirates
Population: 4,440,000 million (July 2007 estimate)
Land Area: 83,600km²
Official Language: Arabic
Currency: UAE Dirham Dh (AED) = 100 fils
Capital: Abu Dhabi
Main Cities: Abu Dhabi: administrative centre of the Federation, Dubai: main commercial centre
In little more than 30 years the UAE has achieved remarkable progress from a group of small neighbouring communities to a prosperous and modern commercial centre whose continually changing skyline is beginning to rival anything in the Middle East. The dynamic economy currently has forecast growth at an average annual rate of 7.3% in real terms and industrial growth is set to be the mainstay of overall expansion, according to the Economist Intelligence Unit. The UAE consists of seven emirates, the most well known being Abu Dhabi and Dubai. Covering some 87% of the UAE, Abu Dhabi is the most populated of the seven Emirates. When it is said that 10% of the world’s oil reserves are in the UAE they are in fact in Abu Dhabi. Total reserves of oil are estimated at 98 billion barrels.
Despite approximately 212 trillion cubic feet of natural gas Abu Dhabi lacks the production capacity to meet domestic requirements. As a result $10 billion will be invested over the next five years in the Dolphin pipeline project transporting natural gas from Qatar to meet the demands of the seven Emirates.
Although success has been built on wealth gained from these vast reserves of oil and natural gas, the UAE has accumulated a vast overseas portfolio of property. This is currently estimated to be in the region of €201 billion, although exact figures are unavailable. It is an example of the prudence that exists and the capability of falling back on other assets should there be changes in the oil market.
The UAE has the best policies governing international trade of any country in the Middle East and North Africa (Mena) region, according to the World Bank’s 2007 report, Economic Developments and Prospects for the Mena region. The report released in April 2007 said the Mena countries had moved their structural reform programs forward over the “past six years”. Following the death in November 2004 of Sheikh Zayed (President of the UAE since its foundation) his son and successor Sheikh Khalifa has accelerated the pace of change and is currently driving through a number of multi-billion dollar developments.
These include the creation of new city suburbs designed to house around 100,000 people, the redevelopment of the port area, the development of a new port, and the expansion of the international airport and the construction of several landmark buildings throughout the Emirate. The tourist authority has also stated the intention to build 50 new hotels by 2015 and to attract three million tourists by that date. Together with the rapid expansion of Abu Dhabi’s new airline, Etihad, all the indicators are of dynamic development over the near to medium term with vast opportunities in all sectors. In addition the authorities are looking to privatise the water and power sectors and are increasing resources into the health and education sectors. Many British companies are already involved across the sectors but the pace of change means there is always be room for more.
Dubai has succeeded in its bid to diversify its sources of income and now Abu Dhabi is following suit with plans to invest $170 billion over the next five years in investment, privatization and diversification. This drive offers numerous business opportunities.
In Dubai construction activities continue to be carried out at breakneck speed. Although the magnificent Burj al Arab is still the most recognisable symbol of the Emirate, current projects such as the two palm islands at Jumeirah and Jebel Ali, The Burj Tower, the Snow Ski Dome, The World and Dubailand are enhancing this reputation.
However, there is much more to Dubai than this. It is indisputably the international business hub for trade in the region. The ever growing network of Free Zones make it ideal for business activity and the reshipment of goods not only to other Gulf but the wider Middle East, Africa and Asia. This continued growth of business activity is highlighted in the massive expansion of Dubai’s existing airport and plans for a new airport at Jebel Ali.
The five northern Emirates of Sharjah, Ajman, Fujairah, Umm Al Quain and Ras Al Khaimah are now rapidly developing and increasingly offering more business opportunities. The northern Emirates are looking at developing more leisure attractions, expanding their transportation systems, ports, airports and roads and expanding existing free zone areas.
A considerable amount of investment is being allocated to the energy sector to improve production, especially of gas and to develop other related industries. Production is limited by quotas agreed within the framework of OPEC. Abu Dhabi is by far the largest oil producer in the UAE and controls more than 85% of the total oil output of the country. Principal offshore oil fields are Umm Shaif, Lower and Upper Zakum, Al Bunduq and Abu al-Bukhoosh. The main onshore fields are Bab, Asab and Bu Hasa. With regards to the developments in the gas sector, it was reported that at least five international energy companies had submitted bids in April 2007 for a giant sour gas project in Abu Dhabi. The project is one of the largest open to oil and gas companies competing for limited access to the Middle East's energy reserves. The Abu Dhabi National Oil Company (ADNOC) project is expected to have gross gas production of around 3 billion cubic feet per day and analysts estimate investment in the project could total $10 billion.
The Government is very keen to develop non-oil manufacturing in pursuit of its policy of controlled economic diversification. The establishment of high-technology and capital intensive industries manufacturing high value products, while protecting and maintaining the environment forms the basis of the Government’s strategy towards promoting industrial growth.
Diversification has involved a number of imaginative and innovative developments aimed at encouraging investors to establish their enterprises in the UAE and at assisting local business people to make the most of what the UAE offers in terms of infrastructure and other support mechanisms. Major industries are aluminum, chemicals, rubber, beverages, paper, pharmaceuticals and cables. Industrial centres at Mussaffah and Ruwais in Abu Dhabi, Jebel Ali in Dubai, and in Sharjah, Ajman, Fujairah, Umm Al Quwain and Ras al Khaimah each offer incentives to attract businesses.
The country has made substantial investments in the tourism sector and has an internationally renowned annual calendar of events. The Dubai Shopping Festival, the Dubai Summer Surprises, the Abu Dhabi Shopping Festival, The Sharjah Ramadan Festival and several other fairs, exhibitions, museums, parks and sporting events all offer attractions for regional and international tourists. Tourism is succeeding in making a significant contribution to the overall diversification strategy and has become one of the most important economic sectors in terms of growth.
Economic diversification is actively pursued with the priority on establishing environmentally safe, high technology and capital intensive industries manufacturing high value products. Oil, chemical, plastics, metal products, textile, leather, foodstuffs, tobacco, printing and publishing are thriving industries. Free zones have attracted a large number of foreign companies to set up manufacturing and service units.
Automotive Sector
The Middle East's first bus manufacturing plant was in Dubai. The boom in the tourism industry and the growth in inter-Emirate travel increased the demand for luxury coaches. Buses manufactured in the UAE are also made for export.
The UAE also boasts the first tyre manufacturing plant in the region. Established in Ajman, the Etarat tyre company is one of the most advanced in the world and initially focused on manufacturing large tyres for heavy weight vehicles.
Aviation
Aircraft servicing and repair is a thriving industry with the Gulf Aircraft Maintenance Company (GAMCO) based in Abu Dhabi providing maintenance services to Lockheed, British Aerospace for example. Gulf Air and Emirates Airlines are the two most successful airlines in the Middle East.
ShipBuilding
The national line of the Gulf states is the United Arab Shipping Company (UABSC), the largest ocean carrier of dry cargo in the Middle East. It serves the shipping needs of the region and offers the most number of services. Meanwhile, Abu Dhabi Ship Building (ADSB) is a full-fledged manufacturer of naval craft which also offers refurbishment, repair and refit services to commercial and navy ships in the GCC.
Fertilisers
The Abu Dhabi Fertiliser Industries Company (ADFERT) has made the Emirates self-sufficient in fertiliser products.
Pharmaceutials
Most of UAE's pharmaceutical needs are met through imports and many international firms have established joint ventures.
aluminium
Aluminium is a major industry in the UAE with Dubai Aluminium company a world leader in aluminium production.
To establish a company in the UAE, the foreign investor has to take a local partner giving him 51% equity. Profit sharing is also based on this. In the Free Trade Zones this 51% rule does not apply. Reforms are currently under discussion to enable greater foreign ownership in certain sectors.
The UAE is committed to the ideals of free and fair trade and is a signatory of the General Agreement on Tariffs and Trade.
Duty
Certain foodstuffs, medicines, agriculture products and chemicals are from duty. Items imported for use into the free zones are also exempted. Otherwise custom duties are normally low. Goods produced in the GCC are also exempted.
Exchange
The UAE currency is freely convertible and floats against other currencies. It is linked to the US dollar and has maintained a steady exchange rate of Dhs.
Free Trade Zones in the UAE are well equipped with up-to-date amenities, facilities and communications infrastructure needed to set up a business. The main benefit that a free trade zone offers is the permission of 100% foreign ownership with no recruitment or sponsorship requirements. Corporate tax and customs duty exemption on imported raw materials and equipment and no levy on exports and imports are the other benefits.
Free trade zone license
When a company is approved, it is given one of the following licenses by the Free Zone Authority. These licenses can be renewed annually as long as the lease agreement is in force. Companies with trade or industrial licenses can only conduct business within the free zone or abroad. To sell their products in the UAE, they should use an UAE official agent. But services and products can be obtained from and within the UAE without one.
Trade License
Companies which are legally incorporated outside the UAE in imports and exports are permitted a trade license. Ownership can remain 100% foreign and no license is required from the economic department.
Industrial License
Companies that are legally incorporated in industrial production outside the UAE and are within the Free Trade Zone can be given an industrial license. Ownership can be 100% foreign and no Economic Department License is required.
Service License
Companies holding a valid license from the respective government body in the UAE can offer banking, contracting services etc., but have to abide by any requirements of the governing body.
National Industrial License
Industrial manufacturers, granted this license, are accorded the same status as a local or GCC-company in the UAE. Share capital must be at least 51% AGCC and 40% of the sale value of the product must be value-added.
Jebel Ali Free Zone
Hamriyah Free Zone (Sharjah)
Ajman Free Zone
Umm Al Quwain Free Zone
Fujairah Free Zone
Ras Al Khaimah Free Zone
Sharjah Airport Free Zone
Quelle: Ghorfa, Arab-German Chamber of Commerce and Industry e.V.
|
