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UNIVERSITY OF MODERN SCIENCE

COLLEGE OF BUSINESS

International Business
BUSN 407
Fall 2015-2016
Assignment
Business Environment in the UAE
Submitted to / Dr. Mohammed Rizwan Alam
Submitted by/ Eissa Abdulla Alhamadi
201330316
Section 4

Introduction
Business Environment is the combination of internal and external factors that influence a company's operating
situation. The business environment can include factors such as: clients and suppliers; its competition and owners;
improvements in technology; laws and government activities; and market, social and economic trends.

The UAE has a vibrant free economy, a significant proportion of its revenues arising from exports of oil and gas.
Successful efforts have been made to diversify away from dependence on hydrocarbons and a solid industrial base
has been created, together with a very strong services sector. The establishment of free zones has been an important
feature of this diversification policy.

Business Environment in the UAE


Since the mid-1960s, exploitation of oil and gas reserves has enabled the seven emirates of the UAE to achieve
substantial economic growth. Economic activity centers on the development of a modern infrastructure including
roads, ports, airports, telecommunications, electric utilities and desalination projects; the construction of residential
and commercial facilities, schools, hospitals and hotels; and the establishment of petrochemical and manufacturing
industries.
The UAEs dynamic economic environment and the economic diversification strategy, has been made possible due
to the massive investment in the infrastructure comprising of efficient road networks, excellent telecommunications
facilities and the links with the outside world through first-class ports, both sea and air, which are constantly being
upgraded.
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In Dubai, hotels, office blocks, shopping malls and entertainment complexes are being developed rapidly and are
putting the Dubai property market on the world map. The trigger for much of this expansion was the Emirates
decision to allow non-nationals to purchase freehold property in several property developments such as Nakheels
development of The Palm, Jumeirah and The Palm, Jebel Ali, which are the latest residential island projects currently
in Dubai.
Features of business environment in the UAE

A coordinated infrastructure that provides all essential utilities to the major centers

Excellent communications systems

A virtual absence of taxation

A well-structured financial sector with virtually no exchange-control regulations

Free-trade zones that ensure ease of registration and efficient operating facilities

International fairs and exhibitions regularly held in the UAE and

An attractive social environment, including modern educational, medical and recreational facilities

Economic structure
General Oil, gas and related industries account for a substantial proportion of the UAE's exports. Other key sectors
include utilities, communications, construction, banking and financial services, manufacturing projects and tourism.
These sectors tend to be located in or near the major urban centers of Abu Dhabi, Dubai and Sharjah, and certain
designated industrial zones.

Relationship of government and business


The government has traditionally played a key role in the planning and development of the economy. In addition, the
government is involved significantly in the ownership of key sectors of the economy, including oil and gas
production and refining, the petrochemical industry, large-scale manufacturing, energy and water production,
telecommunications and transportation. In recent years, attempts have been made to increase the involvement of
UAE nationals in the ownership of these businesses. The government maintains a pro- business attitude towards
attracting foreign expertise, technology and capital and has sought to create a free-market economy.
In their efforts to achieve diversification, the federal government and the governments of the individual emirates
have been actively involved in the development of petrochemical, manufacturing, agricultural and service industry
projects in association with both local and foreign businesses. They welcome foreign expertise and technology in
fields that will benefit the country and its people. To attract foreign businesses, free-trade zones have been
established in Dubai, Sharjah, Umm Al Quwain and Fujairah. Companies operating in these zones benefit from
attractive concessions.
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The influence of business Environment in the UAE on economic environment


As the UAE economy continues to grow and seeks to diversify away from oil, opportunities to invest and do
business in the UAE will continue. The large foreign population will increasingly demand foodservice and foods that
remind them of home creating opportunities for both foodservice providers and suppliers. New high-end hotels and
restaurants will also be in need of suppliers.
Emirati authorities will continue to improve the business environment and ability to do business in order to attract
new investors. This investment in infrastructure and a large number free trade zone benefits make the UAE a more
profitable, less expensive place to do business, compared to other countries in the region. Dubai and other major
cities will continue to act as a hub for the region, allowing for opportunities to re-export products to
other GCC countries. Finally, Dubai has won the expo 2020 which will create a number of opportunities, including
increased tourism, new hotels and an improved business environment.
Conclusion
Successive developments in the economy of the United Arab Emirates, and the adoption of free market policies and
regulations, have led to impressive growth rates and a trend towards sustainable and diversified development.
The UAE Government has successfully pursued a strategy to create an enabling business environment that is
conducive to economic growth. This has contributed to the world-renowned status of the UAE as an international
center for trade, finance and services and has attracted reputable global companies. The UAE has always focused on
strengthening its stance as a hub for business. Hence, it demonstrates an exemplary model to be emulated in all
patterns of economic development and modernization.
The United Arab Emirates continues to pay attention to the foreign trade sector, which is perceived as the
cornerstone of any economy.

Recommendation

UAE Companies Law must be upgrade so that improve the competitiveness of the economy and performance
of the business environment in the country.

Strengthens the protection of shareholders, increases transparency and the disclosure of financial data.

All UAE government services must be smart

Key sectors for investment must include petrochemicals, alternative energy, transport and infrastructure,
manufacturing, healthcare and education, defense and aerospace, real estate and construction, tourism,
agriculture and water

References

Business Monitor International. Retrieved November 19, 2013.

Business Reforms in the United Arab Emirates. The World Bank Group. November 13, 2013.

Dubai: world class infrastructure and a global hub for trade, transport and tourism. Forbes.com. Retrieved
November 17, 2013.

Economy Profile: United Arab Emirates. Doing Business 2014. 11th Edition. World Bank Group.

Ernst and Young. Doing Business in the United Arab Emirates.

Euromonitor, 2013.

HSBC Doing business in the United Arab Emirates

Planet Retail, 2013.

UAE Defence & Security Report.

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