After Abu Dhabi, the capital state, Dubai is the second wealthiest emirate in the UAE. The city is a major commerce and tourist attraction, and its port (JebeL Ali) is at the heart of the Middle East’s export trade. Dubai became a global hub for service industries such as IT and banking after the establishment of the Dubai International Financial Centre (DIFC) in 2004.
Most visitors believe that Dubai’s revenue is mostly derived from oil, yet only a small portion of oil reserves were used to establish the necessary infrastructure for trade, manufacturing, and tourism in order to develop Dubai’s economy. The non-oil sector accounts for approximately 95 percent of Dubai’s GDP. So far, oil has contributed less than 1% of Dubai’s GDP, with tourism accounting for 20% of the total. These data show why, in order to survive the collapse of fossil resources, Dubai has become a more dynamic and diverse economy.
What is Abu Dhabi’s Gross Domestic Product (GDP)?
For individuals interested in exploring the potential of living and working in Abu Dhabi, this page provides an overview of the city. The data presented was taken from open sources and is not intended to be exhaustive or to augment or replace legal or professional advice.
Key Facts
After Dubai, Abu Dhabi is the most populous city in the United Arab Emirates (UAE). 4 In Arabic, “Abu Dhabi” means “country of the gazelle.” 5 The Maqta and Mussafah bridges connect the city to the mainland, as it is located on an island. More bridges connecting the city to the mainland are being built right now. 6
The Emirate of Abu Dhabi is the UAE’s largest emirate, covering 67,340 square kilometers and accounting for 87 percent of the country’s total territory. Abu Dhabi is bordered on the east by Oman, on the south by Saudi Arabia, and on the northeast by the Emirate of Dubai. 7
In 2016, Abu Dhabi had a population of 2.908 million people, with 2.36 million expats and the remaining 23.4 percent (551,535) Emiratis. It had a population of 1.86 million men and slightly more than a million women. 8
The Gross Domestic Product (GDP) of Abu Dhabi in 2019 was 915,250 million dirhams (US$249,169 million). The oil sector accounted for 40.8 percent of the country’s GDP. 9
Natural resources are a major source of revenue for Abu Dhabi. It is, nevertheless, attempting to diversify its economy by expanding non-oil knowledge-based businesses. The Ghadan 21 reforms, worth $13.6 billion, encompass a number of efforts targeted at recruiting foreign enterprises and investments. Abu Dhabi is seeking industrial sector investments from SMEs, as well as building downstream manufacturing clusters around the petrochemical, aluminum, and steel industries, in addition to granting loans and encouraging investment and eco-tourism in its underdeveloped areas. 10
Abu Dhabi’s tourism sector is one of its most important non-oil industries.11 It is currently attempting to diversify its economy and minimize its reliance on oil money by expanding its tourism sector. 12 The emirate is divided into three regions: Abu Dhabi and its environs, Al Ain (Eastern Region), and Al Dhafra (Western Region) (Western Region). It has some of the most stunning landscapes in the world, as well as a diversified geographical terrain and a rich culture and history. 13
The COVID-19 epidemic will have a substantial influence on Abu Dhabi’s tourism economy in 2020. The city anticipates the hospitality and tourism business to revive with the drive for vaccination and the removal of travel restrictions, with hotel occupancy rates rising to at least 80% in 2021. 14
Since the establishment of the first Abu Dhabi-Singapore Joint Forum (ADSJF) in 2007, a number of Singapore enterprises involved in energy, water, urban solutions, and consumer products and services have set up shop in Abu Dhabi.
15 DBS Bank, SembCorp Utilities, and MindChamps are just a few of them. Ground handling business Dnata and GlobalFoundries are two of the 16 Abu Dhabi companies with investments in Singapore. 17
Minister S Iswaran’s visit to Abu Dhabi on the 13th and 14th of November 2019 was aimed at deepening their collaboration in the space industry and developing “innovation partnerships with the UAE’s significant firms, such as GlobalFoundries and Abu Dhabi National Oil Company.” The Abu Dhabi National Oil Company has also showed interest in collaborating with Singapore in the field of innovation. 18
On August 29, 2018, the Monetary Authority of Singapore and the Abu Dhabi Global Market signed a Cooperation Agreement that will provide “a strategic framework for both regulators to assist start-ups and innovators in better understanding the regulatory regime in each jurisdiction and providing support through the application and authorisation process,” according to the Monetary Authority of Singapore. Furthermore, both companies would “undertake and explore joint innovation initiatives on the application of essential technologies such as digital and mobile payments, blockchain and distributed ledgers, big data, flexible platforms (API), and other emerging technologies,” according to the agreement. 19 Urban planning, wastewater management, and semiconductor research & development are among the other sectors where Singapore and Abu Dhabi have collaborated. 20
Where did all of Dubai’s money come from?
With a GDP per capita of $57,744, the UAE is the world’s third richest country, after Luxembourg at number two and Qatar at number one. The production of items and provision of services connected to petroleum, petrochemicals, aluminum, and cement account for the majority of its revenue.
What makes Qatar so wealthy?
The once-sleeping peninsula off Saudi Arabia’s eastern coast has transformed into an important oil-exporting international hub in the last two decades, with only a little fishing economy and nearly no schools. Qatar began substantial natural gas shipments to Japan and Spain in 1997, then expanded to additional nations in the early 2000s. After fifteen years and 14 natural gas plants, the country’s GDP has risen from $30 billion to more than $200 billion. Qatar, behind Russia and Iran, has the world’s largest natural gas reserves, with about 900 trillion cubic feet, accounting for 60 percent of the country’s total GDP.
It began producing 46,500 barrels per day in 1951, after discovering oil in 1939 and natural gas 30 years later. Although some of the revenue was used to begin modernizing the country, the Royal Family amassed a large portion of it, with portions going to the kingdom’s sovereign country, Great Britain. Khalifa bin Hamad deposed his father after the country gained independence in 1971 and increased spending on social programs, housing, health, education, and pensions while lowering the Royal Family’s benefits. Investments in foreign businesses, banks, and even the Paris Saint-Germain soccer team and London real estate provide big returns for the country.
Is Dubai more prosperous than India?
According to a new report, India is the world’s sixth wealthiest country, with total private fortunes of $8,230 billion (Dh30 trillion) in 2017, while the United States is the wealthiest.
According to New World Wealth, a wealth intelligence and market research firm, Indians own more assets in their home country than residents of other wealth hotspots such as France, Canada, Australia, and Italy.
India’s wealth has grown the most in the last year, rising by 25% from $6,584 billion in 2016. Indians were also among the wealthiest people in the world during the last decade, with a 160 percent growth between 2007 and 2017, second only to the Chinese, who gained 198 percent more wealth in the same time period.
Total wealth refers to the sum of all people’s fortunes in a certain state or city, and it includes cash, real estate, stocks, and business interests. It does not involve any cash from the government.
Privately owned assets in the United States totaled $62,584 billion, the largest in the world; China came in second with $24,803 billion, followed by Japan ($19,522 billion), the United Kingdom ($9,919 billion), and Germany ($9,660 billion).
Private fortunes will grow by a massive 200 percent over the next ten years, according to the report, thanks to India’s large entrepreneur community, good educational system, and English-speaking population, with strong growth in the local financial services, information technology, business process outsourcing, real estate, healthcare, and media industries.
As of 2017, India had 330,400 high-net-worth individuals, making it one of the world’s most populous countries. Last year, there were at least 119 billionaires in the country, far more than in Germany, Canada, France, Australia, China, or Russia.
wealthiest countries in the world by total wealth held, 2017
1. The United States of America ($62,584 billion)
China comes in second with a total of $24,803 billion.
Japan ($19,522 billion) is the third-largest economy in the world.
4. The United Kingdom has a GDP of $9,919 billion dollars.
Germany (5th): $9,660 billion
India has a GDP of $8,230 billion dollars.
France has a GDP of $6,649 billion dollars.
Canada is ranked number eight with a total value of $6,393 billion.
Australia: $6,142 billion dollars
Italy is ranked tenth with a total value of $4,276 billion.
Is there any poverty in Dubai?
The GDP per capita in the United Arab Emirates (UAE) is a stunning 49,000 dollars, while the unemployment rate is as low as 2.4 percent. On the surface, the country appears to be thriving, with plenty of opportunity for expansion; nonetheless, the UAE has a substantial population living in poverty. This isn’t generally mentioned in the news because the focus is usually on the wealthy cities of Abu Dhabi and Dubai, which hold the vast majority of the UAE’s total wealth.
This media concentration gives the impression of a prosperous and wealthy country to foreigners, and here are 10 facts about poverty in the United Arab Emirates that you should know.
Facts About Poverty in the United Arab Emirates
- In the United Arab Emirates, there is no government data on poverty. Official data on local poverty levels is not released by the government. The government’s worries and aid efforts should be questioned in light of this lack of information.
- Despite the fact that the UAE is one of the top ten wealthiest countries in the world, a considerable portion of the population an estimated 19.5 percent lives in poverty. This number is concerning because the country is still deemed prosperous overall, despite the fact that nearly a fifth of its citizens are not.
- 83.2 percent of the UAE’s wealth is controlled by Abu Dhabi and Dubai. As a result, the other five emirates are financially reliant on the federal government.
- At least 98 percent of households that receive government assistance have loans that prevent them from paying for basic necessities. Some attribute this to the UAE’s high social standards and high cost of life.
- When it comes to receiving government financial assistance, there are some guidelines to follow. The government examines a family’s income, properties, family member-to-room ratio, rent, and health statuses before determining eligibility for assistance.
- Poverty in the UAE can be reflected in the working class’s working circumstances. Migrants arrive in Dubai in search of job and send money home to their families. They are promised decent wages and safe living conditions; however, these promises are rarely kept.
- The 2008 economic crisis muddled poverty data. The UAE had a poverty rate of roughly 20% prior to the economic crisis; now, the UAE reports a poverty rate of zero, based on a poverty line of around $22 per day.
- Reporters in the United Arab Emirates are discouraged from covering poverty. The government has complete control over the information that surrounds the state and the ability to withhold facts concerning reality.
- Trade and oil are the only things that keep the economy afloat. When global prices fall, government subsidies are required.
- Nationality and gender are used to make economic distinctions. Women are frequently discriminated against in hiring decisions, which contributes to the poverty rate disparity.
Room for Growth in the UAE
These statistics on poverty in the United Arab Emirates demonstrate that, while the UAE is stable in many ways, it might benefit from foreign aid and government support.
While the country’s employment rates and GDP per capita are remarkable, the amount of citizens living in or near poverty is alarming. Thankfully, the UAE’s local government has launched aid programs aimed at reducing and alleviating local poverty. But, in the meanwhile, help should be supplied and made available to those who require it.
Is there a tax in Dubai?
Dubai is attracting a large number of expats. Apart from the good quality of living, the fact that Dubai is a tax-free country is the primary cause for such enthusiasm. Income earned in Dubai is not subject to taxation. In addition, the bulk of goods and services are exempt from sales tax. As a result, there is a common misconception that Dubai imposes no direct or indirect taxes on its citizens. It is, after all, a myth. This is because no state can exist without taxes, according to common sense economics. If Dubai is providing expensive incentives to Emiratis, those incentives must be paid by some form of revenue. We’ll look at the many forms of hidden taxes that are charged in Dubai in this article.
Income Tax
Since we just established that Dubai is known for not levying taxes, it is unexpected to find income tax as the top source of revenue. It is true that the majority of Dubai’s citizens are exempt from paying income tax. This does not imply that everyone is tax-free. Certain categories of listed firms are required to pay tax. The oil industry is the most well-known on the list. Oil companies are taxed at a mind-boggling rate of 55 percent. Given that Dubai’s economy is mostly based on oil, this is a significant sum.
Dubai also levies a tax on the profits of foreign banks doing business in the country. The tax rate on this item is a dismal 20%. Given the volume of transactions, however, the Dubai government still makes a lot of money from these taxes.
Dubai has identified a few industries that account for the majority of tax revenue. Everyone else has been given a pass!
Entertainment Taxes
Dubai is known for levying exorbitant amusement charges. In Dubai, every restaurant adds a 10% service charge to the overall bill. The service charge is what it’s called. The remuneration, unlike the service charge, is not distributed among the hotel workers. The money is instead transferred to the government. This is equivalent to levying a 10% service tax on all hotels. As a result, there is no such thing as no tax in Dubai when it comes to the restaurant industry! Similarly, hotels in Dubai that provide boarding and lodging must pay taxes as well. The rationale goes that the residents of Dubai are not paying these taxes. Tourists, on the other hand, are responsible for paying it.
Similarly, theaters, amusement parks, and any other form of entertainment and leisure spending are subject to hidden taxes.
Import Duties
Dubai is an island that produces nothing of its own. Apart from oil, Dubai’s entire economy is based on imports. The majority of these imports are likewise tax-free. Some imports are significantly charged if they violate local Islamic regulations. These commodities include alcoholic beverages, tobacco, firearms, and ammunition, among others. Alcoholic beverages, for example, are substantially taxed, with imports being taxed at 50% and sales taxed at 30%. Other products, such as cigarettes, are also taxed more heavily than in other countries. Dubai’s tax structure is in line with their Islamic worldview. Rather than punishing those who do not obey Islam, Dubai imposes a monetary strategy that makes disobedience costly.
Taxes on Utilities
Dubai has a large government with multiple branches. When these branches’ services are employed, they each levy a fee. When utility bills are generated, for example, a council tax is collected. This means that electricity bills are taxed at the point of sale. In addition, Dubai has recently begun charging excessive tolls on roadways used by automobiles. The revenue generated by these tolls is enormous, and it aids Dubai’s government in covering its massive expenses. Dubai’s parking is likewise owned by the government. The parking fees are extremely high. In reality, parking fees are the primary motivator for people to use public transportation instead of driving their own car.
Taxes Generated From Expats
The cost of renewing a national ID in Dubai is 100 dirhams every year. They can live, work, and earn in the United Arab Emirates with this ID. Dubai has a sizable expat community. As a result, even though 100 dirhams is not a large sum for an individual expat, the total receipts in this area are significant. Similarly, practically all foreigners in Dubai live in rented apartments. The government of Dubai levies a 5% tax on the rental income generated. This is in addition to the property’s annual council tax! This makes owning or renting a home in Dubai prohibitively expensive.
Dubai also collects taxes from tourists who visit the nation by charging a visa processing charge. Every person traveling out of the UAE is also subject to a fee. The money raised is utilized to keep airports in good working order.
With Dubai’s government in debt, more taxes may be added to the list in the near future. In a tax-free country, this is already a staggering amount of taxes. Given the extensive number of taxes listed above, calling Dubai tax-free isn’t entirely accurate. Businesses have warned the government that any additional tax increases will have a detrimental impact on foreign investment in Dubai.
What made Dubai so wealthy?
Dubai is one of the world’s wealthiest states or emirates, thanks to oil. The city serves as a prosperous commerce center for the Gulf and Africa. Despite the fact that Dubai has little oil, the black gold has made it wealthy. Dubai has become an opulent state admired around the world in less than 50 years because to its strong economy. Dubai has become a global economic powerhouse because to its oil industry and forward-thinking corporate methods.
Is Saudi Arabia part of the UAE?
The present and historical relationship between Saudi Arabia and the United Arab Emirates is referred to as Saudi Arabia-UAE ties. Saudi Arabia has an embassy and a consulate in Abu Dhabi, while the United Arab Emirates has an embassy in Riyadh and a consulate in Jeddah. Both countries are neighbors and share strong political and cultural links as members of the Middle East and Persian Gulf region.
In terms of foreign policy and geopolitical objectives, the two countries are recognized for cooperating closely during the 201718 Qatar diplomatic crisis and supporting anti-Muslim Brotherhood administrations in Libya, Tunisia, and Egypt. However, on regional conflicts such as the Yemeni Civil War, where the UAE opposes Al-Islah and supports the Southern Movement (which has fought against Saudi-backed forces), Arab-Israeli normalization, and the Syrian Civil War, where the UAE has reopened its embassy in Damascus, the UAE and Saudi Arabia continue to take slightly different positions.
The reign of Saudi Crown Prince Muhammad bin Nayef, who had a tense relationship with UAE de facto ruler Mohammed bin Zayed Al Nahyan after the latter compared the former’s father to an ape, strained relations momentarily. However, with the emergence of Mohammed bin Salman in Saudi Arabia, relations have improved substantially, with Mohammed bin Zayed assisting his elevation to crown prince and functioning as a “mentor” to the younger prince.
In Dubai, how many billionaires are there?
According to latest data, there are around 26,000 millionaires in Dubai.
According to New World Wealth, the city has the second highest number of millionaires in the Middle East (measured in US dollars), after only Istanbul in Turkey.
With a population of 2.2 million, this means that one out of every 100 persons in Dubai – or one out of every 23 households – is well-off and has a large amount of disposable cash. The value of principal dwellings is not included in the figures.
This highlights how significant Dubai is becoming on a worldwide scale, as its mix of sporting, cultural, and leisure events attracts a large number of high-net-worth individuals.
London has the most millionaires of any city in the world (339,200), followed by New York (300,100) and Tokyo (300,000). (226,500).
The Swiss city of Geneva tops the list in terms of millionaire density (the number of millionaires per unit of population), with Zurich and Singapore coming in second and third, respectively.
With the real estate market in Dubai likely to strengthen dramatically in the next years, now could be a great moment to conclude a Dubai property investment deal and make a purchase before the Expo 2020 preparations get underway.
The survey expands on a study released last year by the Boston Consulting Group, which indicated that one in every 25 UAE homes is a millionaire, making the UAE the world’s ninth richest country.
Furthermore, three out of every 100,000 households in the country are multimillionaires, placing it among the top 15 countries in the world for this statistic.
With so many high-net-worth individuals working and residing in Dubai and the UAE, the region’s and the Middle East’s futures appear bright.