Often regarded as the Middle East’s premier entrepot, Dubai has undergone a tremendous transformation from a humble port to an iconic metropolis in the world. Government’s strategic initiatives to provide a flourishing environment for burgeoning businesses, increased UAE’s GDP from 1.60% in 2010 to 7.41% in 2022.
Dubai has become the world’s most attractive business destination for both local and foreign entrepreneurs. In 2022, UAE saw FDI inflow of $23 billion, a substantial rise of 10% ac compared to 2021., out of which Dubai accounted for $12.8 billion FDI inflow.
Birth of Dubai as Financial Hub
The UAE government started investing in strategic locations throughout the country, with maximum focus on Dubai to transform it into a global metrocity. It started investing the money they received from trading the natural gas and crude oil to the major sectors in the economy.
Dubai has retained its top position for attracting maximum greenfield FDI projects in 2022, compelling the investors throughout the world to restructure their investment plans. The FDI investment broadly came into 4 sectors, namely, commercial sector, healthcare sector, real estate sector and leisure & entertainment sector.
Commercial Sector
During the pre-oil era, due to arid conditions, the region’s economy was predominantly dependent on nomadic farming, cultivation of date palms, fishing, harvesting of pearls and seafaring.
Since the discovery of oil pockets, the UAE has grown exponentially. Now the economy has been divided into various sectors such as extraction of crude oil and natural gas, wholesale and retail trade, repair services, real estate, business services, construction, manufacturing, technology, education and many more.
Due to high investment in the commercial sector along with other pillars of the economy, the GDP of the UAE increased from 1.60% in 2010 to 7.41% in 2022.
Top 8 commercial areas in Dubai are:
Some of the biggest commercial areas in Dubai with blooming businesses are:
- Business Bay
- Dubai Hills Business Park
- Dubai International Financial Centre
- Dubai Media City
- Dubai Science Park
- Dubai Silicon Oasis
- Jumeirah Lake Towers
- Sheikh Zayed Road
If you are thinking of investing in manufacturing and trading of ships, Bur Dubai, also known as Dubai old city will be the best choice to go for. While you are in Dubai thinking about your next investment area, enjoy the luxury at its best with our Palm Jumeirah vacation rentals.
Healthcare Sector
Dubai witnessed an increase in medical tourism in 2022 with 674,000 medical tourists spending $270 million in the year, a growth of $71.3 million from 2021.
Regulated at both federal and emirate level, the Human health and social work sector contributed 1.3% to Dubai’s GDP in the first quarter of 2023 making it one of the world’s best healthcare systems with an average spending of 4.27% of GDP on it.
Dubai Healthcare City is one of the most preferred areas to invest in for healthcare business. Multispeciality hospitals like Prime Hospital Al Garhoud and Public hospitals like Dubai Hospital are equally preferred by its residents.
Real Estate Sector
The 1980s saw the rapid urbanisation in the city with construction of more inclusive infrastructures. In 2002, the Dubai Government allowed freehold property ownership in Dubai for foreigners which was the cornerstone for Dubai’s real estate sector. However, the 2008 oil prices boom was the real push towards changing the outlook of the real estate sector in Dubai.
Today the real estate sector contributes approximately 5.5% of the UAEs’ overall GDP. In the first quarter of 2023 , the real estate sector contributed to 7.4% of Dubai’s GDP.
In 2023, till June, Dubai’s average prices increased by 16.9%, where average apartment prices increased by 17.2% and average villa prices increased by 15.1%. The average rent of the residential places increased by 22.8% in 2023 till June. The average apartment and villa rents increased by 22.7% and 23.1%, respectively.
Top 10 areas for Real estate Investment in Dubai are:
Though every corner of Dubai is booming with residential areas, there are some prominent areas for investment in the real estate sector.
- Palm Jumeirah
- Dubai Marina
- Downtown Dubai
- Arabian Ranches
- Damac Hills 2
- Dubai Hills Estate
- Business Bay
- Dubai International City
- Dubai South
- Dubai World Trade Centre
Leisure and Entertainment Sector
Leisure and entertainment sector contributed to 0.2% of Dubai’s GDP in the first quarter of 2023.
In the last 50 years, Dubai has built a reputation of its own for being the best in leisure tourism. This sector is expected to expand by a 9.7% compound annual growth rate (CAGR) through 2027.
From being a settlement near the water source to the top position in the tourism sector, Dubai has built new tourist attractions like Palm islands, largest waterpark, aquariums and many more. People across the world plan their vacations to explore the flipped side of Dubai.
The development of the Dubai new airport in 2010 gave a strong push to the tourism sector of the economy.
Top 5 areas for Leisure and entertainment Investment in Dubai are:
- Jumeirah Bay
- Dubai Investment Park
- Blue Waters Island
- Palm Jumeirah
- Sobha Hartland
While you are in Dubai for business purposes, relax yourself with some fun and recreational activities. Don’t worry, we have already prepared an itinerary of things to do during your stay in Dubai. Check it out now!
Final Takeaway
Dubai has already rolled out its economic plan to be a 32 trillion-dirham ($8.7 trillion) to give its position of global financial hub a boost with an aim of doubling foreign trade and investment over the next decade. So why not invest now and get a good YOY return of investment?
Plan your next business trip to Dubai and book your luxury vacation rentals now at HolidayKeepers. We provide an array of vacation rentals from luxurious villas to penthouses, condos, studios and apartments. Contact us now for any queries.
FAQs
Q: What are the benefits of starting a business in Dubai?
A: The Dubai government has improved tremendously on the Ease of Doing business grounds. Some of the benefits for starting a new business are as follows:
- More than 20 free zones to set up a business
- Liberal taxation policies for new companies
- Access to international markets
- Friendly business set up process
- Seamless aviation connectivity
- Commercial real estate options with high ROI
- Diversification to non-oil dependent economy
Q: Which business gives maximum ROI in Dubai?
A: Real Estate is the most profitable business in Dubai. A record of 14 million tourists visited Dubai in 2022 making it the most lucrative place to invest in.
Q: Does the Government of Dubai charge any tax on profits of the businesses?
A: Yes, businesses generating over 375,000 AED (approximately USD $100,000) in profits need to pay 9% corporate tax while the businesses with profits less than the above mentioned sum need not pay any tax.
Q: How much time does it take to establish a new business in Dubai?
A: It takes around 4 to 5 working days (depends on certain variables) to establish a business in Dubai.
Paul P, Senior Editor and Travel Planner at HolidayKeepers, brings over 10 years of experience from New York. He expertly combines storytelling with extensive knowledge in travel and hospitality. Known for turning vibrant travel experiences into engaging articles, Paul covers everything from hidden gems to the latest in vacation rentals, resonating with adventurers and leisure-seekers alike.
