Trade-offs For Doing Business in the UAE

Undoubtedly, the UAE is a very fast emerging market for businesses. The opportunities for a very high growth are paramount. However, the UAE economy shows some weaknesses, too. Its business freedom, investment freedom, financial freedom, and property rights are low, due to certain local government's regulations and policies.

According to the Index of Economic Freedom (IEF) report, which covers 162 countries, the UAE's regulatory environment doesn't seem to be very appealing to people who intend to start, operate, and close a company in the UAE.

Starting a business, in the UAE, takes on average of 62 days, compared to the world's average of 43 days. The minimum capital requirement to launch a business is high. Although, obtaining a business license takes less time than the world's average of 234 days. But, bankruptcy proceedings are lengthy and cumbersome.

The IEF report says foreign investors do not receive the same national treatment that the local investors receive, except for those who set up offices in the free zones. The UAE requires that at least 51 percent of a business must be owned by a UAE national.

In the UAE, goods have to be distributed through an Emirati partner, although "liberalized" items may be brought in without an agent's approval.

While the UAE's two stock markets are open to foreign investments, foreign ownership of listed firms is limited to only 49 percent, while some companies shun foreign ownership.

The government owns all the land in Abu Dhabi. And, Mortgages have been introduced for select Dubai-based, five-star property developments, and are otherwise generally unavailable.