United Arab Emirates: An Overview
General Overview
The UAE, located in the Arabian Gulf, has experienced remarkable growth over the past 25 years. It boasts an open economy with a high per capita income and a strong trade surplus. Abu Dhabi and Dubai serve as the country’s financial hubs, positioning the UAE as a leading economy in the region. The country offers an exceptional quality of life, with state-of-the-art infrastructure, medical facilities, schools, and entertainment options including great beaches, water sports and shopping malls. It is also one of the safest countries globally (ranked as the safest country for 2025 and 2026 according to the Numbeo Safety Index by Country), making it an attractive destination for both residents and businesses.
The UAE is a federation of seven emirates: Abu Dhabi, Dubai, Ajman, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. While Arabic is the official language, English is widely spoken and preferred for business. The UAE’s strategic location offers easy access to regional and global markets, making it a key global commercial hub.
Economic Overview
The UAE has successfully diversified its economy, reducing its dependence on oil while promoting sectors such as trade, banking, tourism, real estate, renewable energy and manufacturing. This has led to a significant reduction in the share of oil-based GDP, with the UAE branding itself as the “United Global Emirates” to attract foreign investment and talent. Despite global economic uncertainty and inflation, the UAE’s economy remained resilient in 2025, driven by strong oil prices, government support and favourable corporate and commercial laws. According to recent economic forecasts, Dubai’s economy (as part of the wider UAE economy) is projected to expand in 2026 by approximately 5% (Forbes Middle East, 2 October 2025), bolstered by its focus on a non-oil diversification strategy including sustainability, technology and financial services.
Real estate, construction and tourism continue to be the country’s core economic pillars. During 2025, these sectors saw continued growth, attracting local and international investors. Dubai’s real estate market reached a historic record with transactions worth approximately AED917 billion ( USD250 billion) across all property dealings in 2025 (Gulf News, 31 January 2026), driven by demand from overseas buyers and high net worth individuals. Major infrastructure projects, including Etihad Rail, the Natural History Museum, the Loop, Saadiyat Grove and Al Marjan Island, further highlight the strength of the real estate, construction and tourism sectors.
Doing Business and Investing in the UAE
The UAE ranked first in the Global Entrepreneurship Monitor (GEM) 2024–2025 report for the fourth consecutive year. Due to legislative reforms in 2021 that allow foreign nationals to own and operate companies on-shore, as well as the plethora of free trade zones, where 100% foreign ownership is permitted, the country is considered one of the most business-friendly in the world. This, coupled with a minimal VAT rate of 5%, 0% corporate tax in free zones and 9% corporate tax on-shore (on taxable profits above AED375,000), makes the UAE one of the top destinations globally for foreign capital and investors.
In 2020, the UAE updated its Economic Substance Regulations (ESR), requiring businesses in certain sectors to demonstrate adequate economic activity within the country, ensuring compliance with global standards.
The UAE was removed from the Financial Action Task Force grey list in February 2024 following comprehensive reforms to its anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks, boosting international confidence in the UAE’s financial sector.
In 2025, the UAE introduced clarifications on the settlement of corporate tax liabilities and the refund of unused tax credits.
New regulations for cryptocurrencies and blockchain technologies, have strengthened the UAE’s position in the global economy, particularly in the digital economy. In 2024, the country introduced new laws governing digital assets, data privacy, and cybersecurity, while the Virtual Assets Regulatory Authority (VARA) was established to license and supervise crypto and blockchain activities. These measures ensure that businesses operate in line with international standards, boosting confidence for investors and innovators in the UAE’s digital ecosystem.
The continued digitalisation of UAE courts through e-filing, virtual hearings and electronic service has enhanced procedural efficiency, reduced delays and improved access for domestic and international litigants. The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) courts, operating under an English-language, common law framework, play a pivotal role for international investors by offering specialist commercial benches and reliable enforcement mechanisms. These reforms aim to foster a fair working environment for all. Additionally, the UAE has made significant strides in relation to dispute resolution, particularly in arbitration, which has increased foreign investor confidence. The Dubai International Arbitration Centre (DIAC) and the newly launched arbitrateAD in Abu Dhabi offer robust arbitration services that align with international standards, ensuring efficiency and fairness. Strengthened reciprocal enforcement arrangements and a more consistent pro-enforcement judicial approach have increased confidence in the UAE’s recognition of foreign judgments and awards. This is key as the UAE’s population consists predominantly of expatriates residing on fixed-term visas and this demographic dynamic can create practical challenges in civil enforcement.
The UAE continues to attract multinational companies and entrepreneurs due to its skilled workforce and growing number of international firms and financial institutions. Its evolving legal framework, which also supports free trade zones governed by independent regulatory authorities, means that entities have a wide choice over where to establish themselves, with the established free zones, in particular, providing tailored pro-business guidelines and streamlined regulations for setting up a business. Generally, the process involves obtaining initial approval from the relevant free-zone authority, followed by applying for a trade licence, with flexible capital requirements depending on the industry and zone. The UAE Bankruptcy Law provides structured preventive composition and restructuring mechanisms, reflecting the growing sophistication of the country’s commercial and insolvency landscape.
Future Challenges and Opportunities
The planned “Schengen-style” tourist visa, which is expected to launch in 2026, would allow travel across all six GCC countries (UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, Oman) and will create a dynamic and attractive environment for business. Non-oil sectors, including tourism, finance, and technology, are expected to drive UAE economic growth, projected at 5% in 2026.
Despite ongoing regional conflicts, the UAE has established itself as a stable and secure destination for businesses and investors. Its commitment to neutrality, humanitarian support, and economic resilience has strengthened its reputation as a reliable hub in a turbulent region.
The UAE has increasingly emphasised environmental, social, and governance (ESG) initiatives and climate action. The Net Zero by 2050 strategy continues to drive investments in renewable energy and sustainability projects. Hosting COP28 in 2023 reaffirmed the country’s commitment to addressing climate change, enhancing its appeal to investors seeking socially responsible and sustainable opportunities.
Innovation and technology remain central to the UAE’s future agenda. The country is recognised for fostering an innovation-driven economy, with a focus on sectors such as fintech, artificial intelligence, and blockchain. As a member of the Agile Nations network, the UAE is creating a regulatory environment that encourages technological advancement. Initiatives like smart cities and increased investment in research and development further position the UAE as a global leader in technological innovation, attracting businesses eager to participate in a forward-thinking ecosystem.
Law firms in the UAE are also embracing technology to enhance efficiency and transparency, adopting innovative tools to better serve clients and meet the growing demand for tech-driven legal solutions.