10-31MOE Chap1

CHAPTER 1
CHAPTER 1
The United Arab Emirates

1.1 The UAE: Formation
Al-Khaimah and Fujairah. Abu Dhabi City is the federal capital. Each emirate has contributed to the nations progress and exciting opportunities for investors are to be found in all parts of the country. Sharing a border with Saudi Arabia and Oman, the UAE has a land mass of 83,600 square kilometres and a total population now estimated at 4.1 million. The urban population is 75 percent of the total as four fths of the territory is desert. The UAEs foreign population is 78.9 percent. According to OPECs 2005 report, the UAE has the worlds fth largest proven reserves of crude oil (9 percent of total world reserves), and fourth largest reserves of natural gas (5 percent of the world total). These reserves are expected to last for more than 100 years at current production rates. The people of the UAE are very proud of their ancestry but this publication will focus mainly on the success story of the last three and a half decades since the establishment of the Federation. Fifty years ago the UAE consisted of sand dunes, the occasional oasis, simple villages and
he United Arab Emirates (UAE) is a federation of seven emirates located in the Arabian Gulf: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al Quwain, Ras
hard working shepherds, shermen and seafarers. It was a real challenge to eke out a living in such a difcult terrain. Only a few decades ago the situation in the country was radically different from the way things are today. It was fortunate that the leadership of the various sheikhdoms constituting todays UAE followed a vision and had the courage to build a dynamic modern country. In 1971, a few years after the discovery of oil and a modest transformation from a seminomadic society, His Highness, the late Sheikh Zayed bin Sultan Al Nahyan became the ruler of the largest and richest UAE emirate of Abu Dhabi. Following the withdrawal of the British forces from the Gulf region, he invited the rulers of the other emirates to form a federation. Thus the United Arab Emirates, or UAE, was born. Sheikh Zayed spared no effort to make the Federation a success. Now that the UAE is party to many international agreements, the Federal Government works hard to harmonise the activities and decisions of the seven emirates. The UAE has used oil wealth to nance infrastructure and diversify into service sectors. Today the non-oil economy constitutes around 63 percent of GDP. Almost half of the non-oil economy is based on services. The country has targeted sectors with the most rewarding
opportunities, including tourism, logistics and transportation, ICT and nancial services. The emirate of Abu Dhabi is rich with natural resources and is much larger than the combined total areas of the other six emirates. Abu Dhabi city is the seat of the Federal Government. Dubai has been able to create one of the most impressive success stories of modern times. Today its many signature structures and initiatives have created a strong and enduring identity on the world stage. The emirate has become a holiday destination for many people around the world. Dubais success is particularly notable because the emirate is not endowed with large quantities of natural resources. The Northern Emirates are also buzzing with activity with each government drawing up ambitious plans for new developments as well as taking steps to improve their infrastructure. Culture, heritage and history are the dening characteristics of Sharjah. This emirate boasts a number of outstanding museums, galleries, libraries and renowned seats of learning. Sharjah is also the prime location for many UAE-based industrial rms. The emirate is keen to promote tourism and a number of major residential projects have been launched. Ajman is witnessing a boom due to the spillover effect from Dubai and Sharjah. The
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Investors Guide to the UAE
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THE UNITED ARAB EMIRATES
authorities in the Federations smallest emirate have opened wide its doors to investors and a raft of new investment projects have been recently announced. New focuses for economic development in Umm al Quwain include tourism and real estate development with plans for a new marina as well as huge residential complexes. The government of Ras Al-Khaimah (RAK) is making earnest efforts to provide world-class tourism facilities. In October 2006, RAK received its rst charter ight of tourists from Europe and
for six months of the year, ights bring European tourists to the emirates resorts every week. In November 2006, RAK announced that foreign and domestic investment in the emirate had reached AED100 billion. Fujairah has focused on developing its port and free trade zone and is now one of the worlds top three locations in bunkering, alongside Rotterdam and Singapore. The emirate also has ambitious plans to develop the tourist industry and nine new hotels are due to open in the next ve years.
The genius of the UAE is a combination of entrepreneurship, competition, cooperation and openness. With a tax free environment, worldclass infrastructure and negligible tariffs, the country has become a hub for entrepreneurship in the region, attracting the largest number of FDI projects. UAE businessmen and women realise that they need to compete locally but cooperate globally. They understand that the openness of the country to outside investment, labour and capital, results in increased economic prosperity for all.
1.2 Federal Government and the Political System

The federal system includes ve bodies with no full separation of powers: the Federal Supreme Council, the President, the Council of Ministers, the Federal National Council, and the Federal Judiciary. The Federal Supreme Council, comprising the rulers of the seven emirates, is the top policymaking body of the Federation and is vested with legislative and executive powers. The Federal Supreme Council elects the President and the Vice-President of the Federation, raties federal laws and decrees, and approves the nomination of the Prime Minister (who is selected by the President in consultation with the Members of the Supreme Council) and accepts his resignation. The Council may also relieve the Prime Minister of his post upon the recommendation of the President. Sheikh Zayed bin Sultan Al Nahyan, ruler of Abu Dhabi, was elected as the rst President of the UAE, and ruled until his death on 2 November 2004. Sheikh Zayed was succeeded by his son and Crown Prince, His Highness Sheikh Khalifa bin Zayed Al Nahyan, who was elected by Members of the Supreme Council as the new President on 3 November 2004. The post of Vice-President is held by the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al
TUNBAL SUGHRA ABU MOUSA TUNBAL KUBRA
Maktoum, who succeeded his brother after his

OMAN
death in January 2006. The President and VicePresident are elected by the Supreme Council for a term of ve years which is renewable.
Ras Al Khaimah
The Arabian Gulf
Um Al Quwain Ajman Sharjah Dubai
Khor Fakka Fujair
In the absence of the President, the VicePresident assumes his responsibilities. The President is accorded a wide range of legislative and executive powers. As chief executive of the State, the President has the right to convene and preside over meetings of the Supreme Council.
QATAR
DAS
ZIRKU ARZANAH DALMA SIR BANI YAS MERAWAH
SAADIYAT Port Zayed
Abu Dhabi
Sweiham Al Ain
OMAN
The President is also entrusted with signing laws, decrees and decisions sanctioned by the Supreme Council, supervising implementation through the Council of Ministers; and the ratication of treaties and international agreements after approval by the Supreme Council and the Council of Ministers. Headed by the Prime Minister, the Council
Abu Dhabi Dubai Sharjah Ajman Umm Al Quwain Ras Al Khaimah Fujairah
SAUDI ARABIA
Medina Zayed
Liwa Oasis
of Ministers is an executive authority of the Federation. The Prime Minister, who is currently the Vice-President and ruler of Dubai, selects his
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CHAPTER 1
cabinet ministers among representatives from the seven emirates. Federal National Council The Federal National Council (FNC) comprises 40 members representing the seven emirates. The number of seats assigned to each emirate (8); Sharjah (6); Ajman (4); Umm al-Quwain (4); Ras Al-Khaimah (6); Fujairah (4). The selection of representatives, who are appointed for two calendar years, is at the discretion of the ruler of each emirate. Under the Constitution, the FNC has a consultative role, including serving the people and the nation, consolidating the principles of shura (consultation) in the country, examining and amending proposed federal legislation, questioning ministers and holding them accountable for their respective ministries, and discussing the annual budget. The FNC is presided over by one of its members. The foundations of a democratic process began in the UAE in December 2006 with elections for the FNC. This was the rst phase of the process with half the members of the Council being elected. Phase two will dene the powers of the Federal National Council and its relationship with the government. The third phase will result in an enabled, larger and stronger Council with more specic areas of responsibility. The Judicial System The judicial system is composed of a federal and a local judiciary. The federal judiciary comprises the Federal Supreme Court, the Federal Courts of Appeal (civil and sharia), and the Federal Courts of First Instance (civil and sharia). The Federal Supreme Court consists of ve judges including a President of the Court, appointed by presidential decree and endorsed by the Supreme Council. The judges decide on the constitutionality of federal laws and arbitrate on inter-emirate disputes and disputes between the Federal Government and the emirates. The Federal Courts of Appeal comprise a body of judges including court presidents. Panels Political Stability When the rulers of the seven emirates agreed on the forms of government for their new federal state, they deliberately chose not simply to copy from others. They chose, instead, to work towards a society that would offer the best of modern administration, while at the same time retaining the traditional forms of government that, with their inherent commitment to consensus, discussion and direct democracy, offered the best features of the past. It is evident that they made the correct choice, for, despite the massive economic growth and the huge increase in population, the state has enjoyed political stability. of three judges hear criminal cases, civil, commercial, and other matters. They also hear appeals against judgments by the Federal Courts of First Instance and the local judicial authorities, together with other disputes in accordance with applicable laws. Judgments of the Federal Courts of Appeal are nal. The Federal Courts of First Instance have a body of judges and court presidents who hear criminal cases, as well as civil, commercial, and other matters. Judgments are delivered by a single judge unless the law stipulates otherwise. Article 116 of the Constitution states that all matters not specically stipulated as falling within federal jurisdiction may be considered within the relevant emirates. The emirates of Dubai and Ras Al-Khaimah have established a local judiciary, not attached to the Ministry of Justice, which oversees the federal judicial system.
WAM
There have been numerous attempts to create federal states, both in the Arab world and elsewhere. The UAE is the only one in the Arab world to have stood the test of time, proof of that being the smooth transition that occurred, in Government and throughout the country, following the death of the Federations founder Sheikh Zayed.
Sheikh Khalifa bin Zayed with Prince Charles
is based on its population: Abu Dhabi (8); Dubai
Women in the UAE According to the UAE Constitution, women enjoy the same legal status, access to education, and right to practise professions as men. Under the terms of the Labour Law it is prescribed that there shall be no discrimination between men and women in terms of equal pay for equal work. The Government has also ratied international agreements relating to women including the Convention on the Elimination of All Forms of Discrimination against Women. The UAEs attitude to women is well demonstrated by recent gures from UNESCOs Education for All Global Monitoring Report, which shows the UAE to be one of only 15 countries where girls outnumber boys in the formal education system. The majority of students enrolling for higher education are women. At the Higher Colleges of Technology, the proportion of female students is three times higher than that of men. There is no shortage of female role models in the workforce either. During recent years the UAE has appointed two women ministers (Sheikha Lubna Al Qasimi, Minister of Economy and Mariam Mohammed Khalfan, Minister of Social Affairs) and both the government and the private sector encourage the participation of women in all disciplines. One of the most important aspects of the Federal National Council elections that took place in December 2006, was the participation of women who, for the rst time, were eligible for inclusion into the council. When the results were ofcially announced in February 2007 the nal make-up of the councils 14th Legislative Chapter included nine women, one of whom had been elected, representing 22 percent of the total.
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1.3 Federal Ministries

Ministry of Defence The Minister: (also Prime Minister) H.H. Sheikh Mohammed bin Rashid Al Maktoum POB: 46616, Abu Dhabi Tel: 02 446 1300; Fax: 02 446 3286 Website: www.gdocd.gov.ae Ministry of Finance & Industry The Minister: Sheikh Hamdan bin Rashid Al Maktoum The Minister of State: Dr Mohammed Khalfan bin Kharbash POB: 433, Abu Dhabi Tel: 02 672 6000; Fax: 02 666 3088 Email: mo@uae.gov.ae Website: www.fedn.gov.ae Ministry for Foreign Affairs Foreign Minister: Sheikh Abdullah bin Zayed Al Nahyan The Minister of State: Mohammed Hussein Al Shaali POB: 1, Abu Dhabi Tel: 02 4444488; Fax: 02 4449200 Email: mofa@uae.gov.ae Ministry of Presidential Affairs The Minister: Sheikh Mansour bin Zayed Al Nahyan POB 80, Abu Dhabi Tel: 02 622 2221; Fax: 02 622 2228 Website: www.mopa.ae Ministry of Interior The Minister: Lt-General Sheikh Saif bin Zayed Al Nahyan POB: 398, Abu Dhabi Tel: 02 441 4666; Fax: 02 4414938 Website: www.moi.gov.ae Ministry of Economy The Minister: Sheikha Lubna bint Khaled Al Qasimi POB: 901, Abu Dhabi Tel: 02 626 5000; Fax: 02 626 9942 Email: economy@emirates.net.ae Website: www.economy.ae Ministry of State for FNC Affairs The Minister of State: Dr Anwar Mohammed Gargash POB: 836, Abu Dhabi Tel: 02 681 2000; Fax: 02 681 2846 www.almajles.gov.ae Ministry of Labour The Minister: Dr. Ali bin Abdullah Al Kaabi POB: 809, Abu Dhabi Tel: 02 6671700 or 02-4183888; Fax: 02 6665889 POB: 4409, Dubai Tel: 04 2691666; Fax: 04 2668967 Ministry of Energy The Minister: Mohammad bin Dhaen Al Hameli POB: 59, Abu Dhabi Tel: 02 626 2288; Fax: 02 626 0037 Website: www.uae.gov.ae.moew Ministry of Culture, Youth and Community Development The Minister: Abdul Rahman Mohammed Al Owais POB: 17, Abu Dhabi Tel: 02 446 6145; Fax: 02 445 2504 Website: www.mcycd.ae Ministry of Justice The Minister: Mohammed Nukhaira Al Dhaheri POB: 260, Abu Dhabi Tel: 02 681 4000; Fax: 02 681 0680 Website: www.uae.gov.ae/moj Ministry of Governmental Sector Development The Minister: Sultan bin Saeed Al Mansouri POB: 6633, Dubai Tel: 04 295 2999; Fax: 04 295 9888 Website: www.mdgs.gov.ae Ministry of State for Cabinet Affairs The Minister of State: Mohammed Abdullah Al Gargawi POB: 899, Abu Dhabi Tel: 02 445 0777; Fax: 02 445 3409 Email: moca@uae.gov.ae Website: www.moca.gov.ae Ministry of Social Affairs The Minister: Mariam Mohammed Khalfan Al Roumi POB: 261, Abu Dhabi Tel: 02 632 2500; Fax: 02 633 3259 Website: www.moca.ae Ministry of Education The Minister: Dr Hanif Hassan Ali Undersecretary: Dr Jamal Al Mehairi POB: 295, Abu Dhabi Tel: 02 62138000; Fax: 02 6351164 Website: www.moe.gov.ae Ministry of Environment and Water Ministry of Higher Education and Scientic Research The Minister: Sheikh Nahyan bin Mubarak Al Nahyan POB: 45253, Abu Dhabi Tel: 02 642 8000; Fax: 02 642 8778 Website: www.uae.gov.ae/mohe Ministry of Public Works The Minister: Sheikh Hamdan bin Mubarak Al Nahyan POB: 878, Abu Dhabi Tel: 02 626 0606; Fax: 02 626 0026 Website: www.mopw.gov.ae The Minister: Dr Mohammed Saeed Al Kindi POB: 213, Abu Dhabi Tel: 02 449 5100; Fax: 02 449 5150 Website: www.uae.gov.ae/uaeagricent Ministry of Health The Minister: Humaid Mohammed Obeid Al Qattami POB: 848, Abu Dhabi Tel: 02 633 0000; Fax: 02 671 7722 Website: www.moh.gov.ae
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CHAPTER 1
1.4 Demographics
Population, in the UAE, has been rising, over the last few years, at a staggering rate of around 7 percent per annum. Around 2 percent of the growth rate is natural, while an inux of expatriate workers is helping support the rapid industrialisation of the UAE. Expatriates constitute the majority of UAE citizens (around 85 percent) and all expatriates come to the UAE to work or invest. Unemployment does not exceed 4 percent. There was a 26.3 percent participation in the labour force in 2006. Population Results 2005 by Gender and Nationality
Nationals Male 10.2 Female 9.9 Total 20.1 Male 58.1 Non-nationals Female 21.8 Total 79.9 Male 68.3 Total Female 31.7 Total 100
Population Results 2005 by Emirate

Emirate Abu Dhabi Dubai Sharjah Ajman Umm Al Quwain Ras Al Khaimah Fujairah Grand Total Male 926,819 989,305 520,234 131,684 30,084 129,442 78,584 2,806,152 Female 472,665 332,148 273,339 75,313 19,075 80,621 47,114 1,300,275 Total 1,399,484 1,321,453 793,573 206,997 49,159 210,063 125,698 4,106,427
Population Results by Age Groups and Nationality 2005

Age Group Male 0-4 5-9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65-69 70-74 75-79 80-84 80+ Not clear Total 55120 52371 53985 55575 50673 39396 25846 20189 14633 12433 10246 7893 6176 5335 3657 1621 1160 958 650 417917 UAE Nationals Female 52310 49704 50382 52536 52764 41121 26497 21554 16366 13857 9947 6341 4549 3283 2699 1205 960 830 673 407578 Total 107430 102075 104367 108111 103437 80517 52343 41743 30999 26290 20193 14234 10725 8618 6356 2826 2120 1788 1323 825495 Male 90497 87567 76777 65823 221350 444220 464072 366565 248093 162043 97081 43410 12632 3840 1746 576 370 304 1269 2388235 Other Nationalities Female 84217 79754 67887 58304 108756 137028 123994 92265 62190 37458 21592 9467 3971 2001 1319 622 479 339 1054 892697 Total 174714 167321 144664 124127 330106 581248 588066 458830 310283 199501 118673 52877 16603 5841 3065 1198 849 643 2323 3280932 Male 145617 139938 130762 121398 272023 483616 489918 386754 262726 174476 107327 51303 18808 9175 5403 2197 1530 1262 1919 2806152 Total Female 136527 129458 118269 110840 161520 178149 150491 113819 78556 51315 31539 15808 8520 5284 4018 1827 1439 1169 1727 1300275 Total 282144 269396 249031 232238 433543 661765 640409 500573 341282 225791 138866 67111 27328 14459 9421 4024 2969 2431 3646 4106427
Source: MOE Tedad (Census) 2005 (These results do not include 335,615 individuals who for various reasons are not counted in the census.)
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1.5 Business Culture and Tips on Business Etiquette in the UAE
RAKFZ
Hospitality is a matter of honour and a way of life in the Arab world and business is frequently conducted over lunch or dinner. It is considered polite to return the invitation. You will be offered traditional refreshments in an Arab home or ofce and sometimes a sweet tea or coffee avoured with cardamom is served without milk. If Arabic coffee is offered, you should accept at least one cupful. Your cup will be frequently relled. If you do not want any more, shake the cup to show that you have had enough. Three cups are considered to be sufcient. Be careful not to offer the left hand when accepting or passing items to Emirati people and position yourself so that you do not show the soles of your shoes or feet.
Although large rms are structured as in the rest The UAE is widely regarded as being at the forefront of regional development with a relaxed business environment. As a regional hub, the UAE is thought to be the ideal place to establish branches in nearby countries. Foreigners are attracted by a delightful winter climate, highly sophisticated infrastructure and a crime-free environment. Corporate leaders comment favourably on the high quality of life in the Emirates and the availability of good schooling for their children. Although Arabic is the ofcial language, all Emiratis speak uent English. of the world, companies in the UAE are often family affairs, with the ultimate decision-maker being the head of the family. Even if this is not the case, it is important to identify the decision maker. However, your initial meetings will probably be at a lower level. These are also very important as a means of building mutual trust. It is a good idea to print your business card in both English and Arabic and make sure that your promotional material is in full colour and well produced.
Jumeirah
Good manners, courtesy and patience are prized This highly cosmopolitan, well-educated society is familiar with the ways of doing business worldwide and even those few Emiratis who are not frequent travellers themselves, will have come across countless nationalities in the course of life at home. In the UAE, perhaps more than anywhere else, business is conducted on the basis of personal relationships and mutual trust. It is vitally important to build on these. Do not be offended if an Emirati does not return your handshake. Some people prefer to avoid this kind of contact. When being introduced to a woman it is better to avoid offering your hand unless she offers hers rst. attributes. You should always arrive on time for a meeting but you may be kept waiting. Your meeting may be interrupted by other guests or telephone calls as open ofce arrangements are quite usual. The direct, hard-hitting approach is not always welcome and it is usual to exchange pleasantries before getting down to business. During negotiations there may be unwillingness on the part of Emiratis to say no to your face. Nevertheless, once a deal is made an Arab businessmans word is his bond. This can be disconcerting if you come from a business environment where verbal agreements are not binding.
Businesswomen are commonplace in the UAE and are generally treated seriously, particularly if the woman acts in a condent and self-assured manner. It is best to dress conservatively and good grooming is essential you will nd that all business people are impeccably turned out. Although smart slacks, shirt (ideally long-sleeved) and tie are sufcient for some meetings, a blazer/ jacket are required for meetings at senior level. All buildings are air conditioned, so throughout the year it is quite comfortable to wear a jacket indoors. It can get quite cool in the evening in winter when a sweater or light jacket may be required.
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CHAPTER 1
1.6 Economic Transformation of the UAE

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 worldrenowned status of the UAE as an international centre for trade, nance and services and has attracted major global companies. The UAE has always focused on strengthening its stance as a hub for private commerce. Economic growth in the UAE has witnessed a phenomenol increase over the last few years. According to the Ministry of Economy, the growth rate in terms of current prices reached 33.4 percent in 2006 and 8.9 percent in terms of xed prices. Nominal Gross Domestic Product has risen by more than 18 percent a year, increasing by 23.4 percent in 2006 to AED599 billion from AED485 billion in 2005. Another positive indicator is the increase of nominal GDP of non-oil sectors from AED212 billion in 2005 to AED376 billion in 2006 as the contribution of non-oil sectors in nominal GDP has reached approximately 63 per cent. The Government emphasises continued diversication away from dependence upon oil and gas to non-oil industries. This is evidenced by the export mix of the UAE: non-oil exports were 52.3 percent of total exports in the ve years from 2000 to 2004 compared to 31.9 percent in the 1970s and 29.5 percent in the 1980s. The services sector is another policy focus; the growth of services will contribute to increased diversication and broad-based growth. The major drivers behind this growth are higher oil prices as well as development in the manufacturing sector, real estate and business services, and transport and telecoms services. The UAE has recorded a surplus in the consolidated government nancial accounts for the rst time after over 20 years of scal decit in the budget. Long before the recent phenomenon of oil wealth, the local economy showed entrepreneurial spirit. During the Middle Ages ships plied the routes between the Indian Ocean and the Mediterranean carrying goods back and Investment Hub Local investment in the UAE was expected to grow by 29 percent in 2006 to reach AED121 billion given the volume of projects under construction around the country. International companies are also investing heavily in the UAE, lured by the strength of the UAE economy, the regulatory policies and the overall can do approach toward commercial activities. Again, it was the WTO that pointed out that the low trade barriers, and focus on creating industry hubs, or clusters where organisations from the same sector can create a vibrant community, have served the UAE well. If you consider the Impressive Growth Rates One of the major success stories in the UAE is the growth in the private sector, which is an engine to drive the economy for decades to come. Assets of local and foreign banks in the UAE grew 18 percent in rst quarter 2006, with analysts attributing that Diversication The UAE economy of the 21st century is becoming increasingly diversied as a result of concerted efforts to grow vertical sectors such as aviation, logistics, tourism, and manufacturing. The conditions which have dominated the energy market throughout 2006 have created favourable circumstances which have led to the development of all economic sectors and enhanced expansion of investements directed to infrastructural projects, hydro-carbon industries and real estate development. International entitities such as the WTO refer to the Emirates as an increasingly important supporter of the multilateral trading system. The UAE was the highest ranking country in the Gulf Cooperation Council (GCC) on the World Economic Forums Global Competitive Index for 2006-2007. It was ranked 32nd, just four places after Spain, followed by Qatar in 38th place. The World Economic Forum also ranked the UAE in 29th place on its 2006 Networked Readiness Index, part of its Global Information Technology Report. in forth from India and China. The people of the Emirates learned the values of trading, which has developed into the entrepreneurial spirit the UAE is displaying today. success of Dubai Internet City, with its blue-chip members, and more recent initiatives such as the Dubai International Financial Centre (DIFC) or Abu Dhabi Industrial City (ICAD), coupled with the UAEs tax-free status and world-class logistics infrastructure, it is clear that this is a country that wants to encourage investment. As a part of the approach to encourage businesses to set up operations in the UAE, the development of Free Trade Zones has been an important policy tool. Each emirate has made signicant investment in developing and operating these zones. In addition to facilitating inter/intra GCC trade, the zones also serve as the regional hub for businesses in the Middle East and Africa. There are always impediments to the growth of any economy, and the UAE is addressing the issues that accompany rapid growth, such as a rising cost of living and increased trafc, but these are being managed in a way that will enable further national development. Keeping this in mind, the Federal Government has proactively earmarked signicant investments developing a world-class infrastructure. Examples of this are the Dubai Metro and the various airport expansion plans currently being undertaken right across the UAE. The budget allocation for Dubai Metro is AED14.3 billion and the investment in airports is expected to be around AED45.6 billion. The Ministry of Economy is actively contributing to the countrys potential by negotiating free trade agreements with key nations and implementing new regulations such as consumer protection laws. In 2006 the Ministry issued Federal Law No 24 concerning consumer protection and created a special department for this purpose.
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the worlds cranes! While construction is not an

UAE FDI INFLOWS COMPARED TO OTHER GCC COUNTRIES, US$ Million
CAGR 2001-05%
1
export sector, it hires the low-income segment of the population and therefore has the highest multiplier effect since blue collar workers have the highest marginal propensity to consume. Turning to positive external factors, these included the increase in the price of oil which raised the crude oil and natural gas sector from AED92 billion in 2003 to almost double that gure (AED223 billion) in 2006. The return of GCC and UAE capital to the region, in the aftermath of Sept. 11th, and its investment in the UAE economy, had benets that are still being reaped today. The UAE has made great strides towards becoming a major player in the global economy. Recently there has been greater expansion in the national economic liberalisation policy, more achievements in customs and banking reforms and the continuous appreciation of all economic indicators including the rise in the rates of growth, operation and attraction of foreign investment and tourists. External Trade and Outward Investment The UAE is a trading nation, as witnessed by its high ratio of imports plus exports (of goods and services) to GDP (around 142 percent). The country is also an important participant in global capital markets through several investment institutions, including the Abu Dhabi Investment Authority, the Dubai Ports Authority, Dubai Holding, and Abu Dhabis International Petroleum Investment Company. Its current account has been consistently in surplus since independence.av
United Arab Emirates Saudi Arabia Qatar Bahrain Oman Kuwait

-111 504
1.184
12,000
78.4 74.1 49.3 90.3 245.8 N/A
4.628
296
1,469
80
1,049
715
250
2001
1
2005
Compound Annual Growth Rate Source: United Nations Conference on Trade And Development (UNCTAD)
growth in part to the continuation of strong private sector activity. Specically, 60 percent of the balance sheet growth was attributed to claims on the private sector. The UAE anticipates further private sector growth through initiatives such as the privatisation of government organisations, and family-owned business groups in the UAE creating more formal corporate structures. The adoption of free market policies and regulations in the UAE, has led to impressive growth rates and a trend towards sustainable and diversied development. The three non-oil sectors that led the way in 2006 were: manufacturing, trade and real estate. The manufacturing sector reached 19.5 percent of total GDP at a value amounting to
AED73.4 billion, reecting the importance that the government and the private sector are devoting to industry. A wide range of industries including oil by-products, chemical fertilisers, aluminium, building materials, food processing and pharmaceutical products have been developed. A number of high-tech SMEs have also been set up in the free-zone areas in the various emirates. The wholesale and retail trade sector is one of the vital sectors in the development process and in 2006 it contributed 16.6 percent of the total GDP, amounting to AED62.5 billion. The real estate sector contributed 12.2 percent of GDP at a net value of AED46.1 billion. The UAE has less than 0.1 percent of the world population but boasts 15 to 25 percent of
1.7 The UAE and its Potential

The UAE has the fth largest proven reserves of crude oil in the world. In terms of natural gas supplies, the UAE is at third place in the Arab World and ranked fourth in the world. The country is politically and economically stable with free market policies, abundant nancial resources, zero income taxes and the free movement of capital and prots. The UAE maintains extensive trade and economic relations across the ve continents because of its strategic geographical location. According to the Chinese Embassy in UAE, the Emirates have become the largest trading partner of China in the GCC with two-way trade representing $14.2 billion in 2006, an increase of 31.5% on the previous year. The UAE is the Gulf Regions major transhipment hub due to its excellent port facilities, probusiness climate and central location between Europe, Asia and Africa. Jebel Ali Free Zone in Dubai houses the worlds largest man-made port and the emirate is already a major centre for international trade and the worlds third largest reexport centre after Hong Kong and Singapore. The volume of international trade reached AED847 billion in 2006. As a gateway to huge markets of more than one billion consumers
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The UAE is targeting higher and sustainable growth and further diversication to reduce dependence on oil. The country is keen on enhancing economic, trade and technical cooperation with other economic blocs. Such an environment is clearly conducive to foreign investment. Those who choose to set up businesses in the UAE will nd a hospitable and simple process, an active open economy and an opportunity to penetrate neighbouring markets.
WAM
Ination In the UAE, ination reached 10% for 2006. This has been mostly a result of both exogenous and endogenous factors. Some of the pressure on rent prices is expected to ease in 2007, as construction projects are completed. Nevertheless, the UAE government has started to actively combat inflation. Several rent ceilings were issued at the emirate level to deal with the rent increases. A Consumer Protection Law was recently passed
The next decade will witness a transformation to the super quality realm in the elds of education, healthcare, culture and tourism. Services will make an increasing contribution to GDP, with
Sheikh Mohammed bin Rashid with Microsofts CEO
growth in air and maritime transport, tourism, nancial services and a host of other services. The UAE can offer a wide range of attractive investment opportunities, ranging from petrochemical, gas, marine, metal and food-stuff industries to tourism, services and advanced IT industries. The country has established a number of industrial estates in various regions, in addition to creating and equipping special zones and parks such as Abu Dhabi Industrial City, Dubai Internet City, Media City, Logistics City, and Silicon Oasis. (See page 57 for list of Free Zones). The United Arab Emirates thus represents an innovative business environment that facilitates international trade and investment. The UAE is the regions most advanced business centre and is set to become one of the worlds most successful headquarters for every kind of international business.
FACTORS CONTRIBUTING INFLATION
TO
in countries such as Iran, Pakistan, India, the CIS, the Arab World and Africa, the UAE is an enormously important investment hub. Dubai International Financial Centre (DIFC) plans to become a regional nancial hub bridging the time zones between New York, London and Hong Kong. The opening of the Dubai International Financial Exchange (DIFX) in 2005 with its international-style rules and regulatory standards, was a major step towards this goal. The UAE is the third largest country in terms of GDP in the Arab World, number two in terms of per capita income, the second largest trader and the fastest growing tourist destination. The country is proud of its uncontested rst place position as the most open and competitive economy in the Middle East and North Africa.
Increasing money supply post September 11th - UAE and Arab capital returned from the US and the EU - M1 grew at least 30% a year over the last few years. Increasing rent prices - Due to supply shortages, rent prices increased signicantly in Dubai, Abu Dhabi and Sharjah. - Rent constitutes around 26% of the average household expenditure according to current CPI (Consumer Price Index) weights. A one-time increase in the price of fuel - Fuel prices increased by 31.5% in 2005 to reect increasing world prices The decline in the USD vis-avis other world currencies and its analogous effect on GCC currencies. - The dollar lost around 27% of its value over the years 2002-2005
Foreign Trade 2006 Exports Crude oil Petroleum by products Gas Free Zone exports Re-exports Others Total
Source: UAE Ministry of Economy
AED billions 178 18 22 80 162 28 488
Imports Commodities Free-zones exports
AED billions 283 76
359
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that should reduce inflationary pressures by protecting the consumer against price fraud. The Ministry of Economy is in the final stages of drafting a Competition Law that should provide further assistance in combating cartels and abuse of dominant position. Moreover, the UAE Central Bank also uses certicates of deposit as a monetary tool to curb money supply. While the depreciation of the US dollar vis--vis other world currencies over the last decade has led to imported ination, the debate of changing the exchange rate system is irrelevant to the UAE given that all GCC countries are currently pegged to the US dollar and that the GCC is working towards a unied currency by 2010.
Source: United Nations Conference on Trade And Development (UNCTAD)
Qatar Bahrain 796,000 696,000 15,355 30,423 Kuwait Oman 2,687,580 2,472,317 9,949 16,945 Saudi Arabia United Arab Emirates 4,104,695 23,765,000 13,001 23,698 Population 2005 number of people GDP per capita 2005, US$
UAE GDP PER CAPITA COMPARED TO GCC COUNTRIES
Future Direction The UAE has made signicant strides in economic development over the past few years. This was primarily due to the UAE governments provision of an enabling regulatory environment. It is expected that services will play a larger role in the UAE economy over the medium to long term, with rapid increases in niche sectors such as air and maritime transportation, logistics, medical tourism, pharmaceuticals and IT. The vision of the government of the UAE is to transform the country into a regional (and even global) hub for entrepreneurship in several industrial and service spheres. To achieve that vision, the government is committed to maintaining laissez-faire policies and an effective public-private partnership. Business Monitor Internationals (BMI) regular outlook for the UAE released in November 2006 forecast GDP growth of 8 percent in 2007, a moderate cyclical retreat to 4.5 percent in 2009, with pickup thereafter. The publication estimates that national income, measured as nominal GDP will rise steadily from US$165 billion in 2006 to US$237 billion by 2011. With population projected by BMI to reach 6.9 million in the same year, GDP per capita is expected to level off in the region of US$34,000. As oil prices also ease back towards US$40 a barrel, oil exports are set to subside, but hold a plateau above US$40 billion against the background of gently rising volumes. BMI presents the positive prognosis that the UAE is charting a steady course ... with a mixture of hydrocarbons muscle and robust non-oil performance. Despite rising imports based on strong domestic demand, non-oil sources will offset a decline in energy receipts. BMI says the UAE is likely to emerge as one of the regions strongest locations for FDI, with levels rising through US$20 billion in 2007, propelled particularly by opportunities in real estate. The BMI considers the economy relatively well insulated from external shocks and capable of riding out any stock price correction. Over the medium term Dubai is said to be on course to spend some US$200 billion on project activity, with Abu Dhabi catching up at around $160 billion.
1.8 Economic Data

In 2006, the national economy grew at the rate of 33.4% in terms of current prices and 8.9% in terms of xed prices reaching AED389.5 billion. (The base year for the xed prices growth calculation is 2000.) The rate of increase in nonoil sectors reached 10.3 percent. The output of these sectors constituted 74.3 percent of GDP in 2006. The value of the output of oil and natural gas sector rose from AED95.1 billion in 2005 to AED99.9 billion in 2006, ie., an increase of 5.0 percent. Surpluses were achieved in both the trade balance and the current account in 2006. The surplus in the trade balance reached AED129 billion representing a 14 percent increase over the previous year. The surplus in the current account also rose by 16 percent above the levels achieved in 2005. The UAE also plays a major role in supporting the economies of other countries through expatriate transfers to their countries of origin. In 2005 transfers to India alone reached AED29 billion. The manufacturing sector contributed AED73.4 billion (19.5%) to non-oil GDP in 2006. Intermediate and capital goods contributed AED62.5 billion (16.6%). Real Estate accounted for AED46.1 billion (12.2%) and the Government Services
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CHAPTER 1
GROSS DOMESTIC PRODUCT (BY SECTOR) 2006

Quarrying 0.2% Domestic Services of Households 0.4% Social and Personal Services 1.4% Electricity, Gas and Water 1.6% Resturants and Hotels 1.7% Agriculture,Live Stock and Fishing 2% The Finance corporation Sector 4.7% Transportayion, Storage and Communication 6.4% Government Services Sector 6.5% Construction 7.5% Real Estate and Business Services 7.7% Wholesales, Retail Trade and Repairing Service 10.4% Manufacturing Industries 12.2% Crude Oil and Natural Gas 37.3%
AVERAGE OIL PRICES PER BARREL 65% 53.5% 36.9% 28.1%
* incl. agriculture, livestock & shing, electricity & water, restaurants & hotels, social & personal
Source: Ministry of Economy
2003
2004
2005
2006
Source: UAE Ministry of Economy
sector came in at AED39 billion (10.4%). With regard to monetary and banking developments, money supply (M1) rose by 29.2% to reach AED104.45 billion by the end of 2005. Meanwhile, quasi-monetary deposits increased by AED58.19 billion (36%). Consequently, broad money (M2) expanded by AED81.82 billion (33.8%) to reach AED324.06 billion. An analysis of the factors affecting broad money shows that the impact of net foreign assets was expansionary, by AED21.51 billion (14.8%), in addition to the expansionary impact of net domestic credit of AED89.01 billion (45.9%). However, the impact of net other factors (capital,
reserves, provisions and other items), which grew by AED28.70 billion (29.6%) on broad money (M2) was, contractionary. Financial markets in the UAE witnessed marked growth in all performance indicators. As a result of increases in the number of traded shares and of listed companies, trading volume increased by 541 percent in Abu Dhabi Securities Market and 703 percent in Dubai Financial Market. GDP at base price and at current prices achieved higher rates of growth in 2006, compared to rates recorded in recent years. Fixed investments in the country also grew by an impressive 29 percent in 2006, reaching a record AED121 billion.
OIL SECTOR CONTRIBUTION TO UAE GDP 35.7% 37% 31.9% 28.4%
2003
2004
2005
2006
1.9 Federal Budget 2007

The federal budget for 2007 amounts to AED28.4 billion (compared to AED27.9 billion in 2006) maintaining a zero decit for the third year running. Education makes up 33 percent of the total (AED7.1 billion). Security and justice constitutes 15.7 percent (AED3.3 billion). AED1.5 billion has been allocated for health (7.1 percent), while almost similar amounts have been earmarked for social affairs, infrastructure (AED1.497 billion) and projects (AED1.1 billion or 5.2 percent). The Emirates (Abu Dhabi and Dubai) contributed 52 percent (AED14.8 billion) of the budget, 35
Contributions to GDP by Emirate (2005)

Abu Dhabi 59% Dubai 28.9% Sharjah 7.4% Ajman 1.2% Umm al Quwain 0.4% Ras Al-Khaimah 1.9% Fujairah 0.4%
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percent (AED9.9 billion) came from ministries revenues and 13 percent (AED3.6 billion) from investments. The ten key programmes for the scal year 2007 include education, power generation, police
services, educational curricular development, curative services, social development, foreign policy and higher education at UAE University and the Higher Colleges of Technology. Some 435 million will be allocated for road projects.
Salaries
constitute projects
AED9.1 are
billion estimated
and at
infrastructure AED 6.5 billion.
1.10 World Trade Organisation

partners, except Israel. The UAE has never been involved in any dispute under the WTO Dispute Settlement Mechanism. Once ratied, treaties and international agreements prevail over domestic legal instruments. With the full integration of the UAE into the World Trade Organisation, the government is reviewing the various laws regarding trade, export and re-export of commodities to ensure greater integration with the global economy and facilitate the movement of commodities to and through the UAE. The UAE is a staunch advocate of multilateralism. As a developing economy that thrives on free trade (as evidenced by a total trade that constitutes around 145 percent of GDP), the UAE believes that it is essential to have a strengthened international trade system which is fully legitimate, fulls the aspirations of most (if not all) of its members, and lays down the principles and rules for promoting international trade liberalisation.
Sheikha Lubna & Pascal Lamy, Director General, WTO
Total number of Bilateral Investment Agreements concluded, 1 June 2006 Partner Algeria Austria Belarus China Czech Rep. Egypt Finland France Germany Italy Korea Kuwait Lebanon Malaysia Mongolia Morocco Mozambique Pakistan Poland Romania Sudan Sweden Switzerland Syria Tajikistan Tunisia Turkey Turkmenistan UK Yemen Date of Signature 24-Apr-01 17-Jun-01 27-Mar-00 1-Jul-93 23-Nov-94 11-May-97 12-Mar-96 9-Sep-91 21-Jun-97 22-Jan-95 9-Jun-02 12-Feb-66 17-May-98 11-Oct-91 21-Feb-01 9-Feb-99 24-Sep-03 5-Nov-95 31-Jan-93 11-Apr-93 18-Feb-01 10-Nov-99 3-Nov-98 26-Nov-97 17-Dec-95 10-Apr-96 28-Sep-05 9-Jun-98 8-Dec-92 13-Feb-01 24-Nov-99 15-Dec-93 25-Aug-01 24-Feb-97 15-Mar-00 16-Aug-99 10-Jan-01 9-Apr-94 7-Apr-96 1-Apr-02 14-Jul-99 22-May-92 Date of Entry into Force 3-Jun-02 1-Dec-03 16-Feb-01 28-Sep-94 25-Dec-95 11-Jan-99 15-May-97 27-Apr-92 2-Jul-99 29-Apr-97 5-Jun-04
Belgium & Lux. 5-Mar-04
The United Arab Emirates sectoral initiative submitted to the World Trade Organisation with free respect to the Non-Agriculture Market Access (NAMA) negotiations proposes the elimination of all customs tariffs on raw materials, including non-ferrous metals with strategic priority for primary aluminium. The initiative supports the diversication of exports, especially in sectors where developing countries have a comparative advantage. It is expected that the elimination of tariffs on raw materials would increase the demand of such materials in the world market and allow for a fair and level playing eld for those commodities. The initiative aims at reaching a balanced approach between tariff reductions through a formula approach which does not in many
The
UAE
government
believes
that
trade is a necessary condition for increased competitiveness and productivity in the long run. Protectionism, in the form of high tariff barriers and technical barriers to trade, would only result in a stagnant and inefficient private sector. It is in this spirit that the UAE has joined the World Trade Organisation (WTO) and has signed several free trade agreements and embarked on negotiations, either individually or with the GCC, on different regional trade agreements. A contracting party to the GATT since 8 March 1994, the UAE became an original member of the WTO on 10 April 1996. It grants at least Most Favoured Nation treatment to all its trading
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CHAPTER 1
cases focus on areas of interest to developing countries and the aim of increasing exports of raw materials that many developing countries consider an essential element of their economy. Exports than 50 of raw materials of the contribute GDP of more many percent
provide the necessary exibilities and allow these countries the possibility to exclude sensitive materials and ask for longer transitional periods for adoption of the initiative. As primary aluminium can account for up to 50 percent of the cost of an aluminium semi-nished product, a duty free primary aluminium would therefore stimulate consumption and support the competitiveness of this material. The initiative would allow for a reduction in the speculative and distortive pricing of raw materials, which in turn would provide more predictability in the
operation of the aluminium market and secure a more transparent environment. A sectoral agreement on raw materials, can be considered an example of cooperation and convergence between the interests of both developed and developing countries of the WTO, while noting that it is important for all Member states to maintain the objective of a balanced agreement on all points of negotiations. The UAE is actively participating in the Doha Development Agenda Negotiations and working closely with other WTO members to reach the objectives agreed in the Hong Kong, China Conference. In the NAMA negotiations, the UAE
developing countries. The United Arab Emirates reafrms its full support of the less than full reciprocity approach accorded to developing countries as a special and differential treatment, and notes that the initiative falls under the development aspect of the Doha Agenda. Sectoral initiatives have been a point of divergence among developing and developed countries during the fth Ministerial Meeting of the WTO Members in Cancun 2003, the differences mainly relating to whether or not participation of WTO Members in such initiatives should be mandatory or voluntary. In this respect, and based upon the positions of WTO Members and with regard to the past experiences on the Zero to Zero initiative of the ASEAN countries, the United Arab Emirates fully supports the position of the developing countries with regard to the voluntary approach of the sectoral initiative. This reects the exibility referred to in the July package of 2004. With the aim of addressing the sensitive issues existing in handling a sectoral initiative, the UAE points out that developing countries who decide to participate in the initiative may look for a selective participation approach, which would
GCC FTA negotiations with other countries and economic blocs: GCC Japan GCC Singapore GCC EU GCC Mercosur GCC India GCC Turkey GCC China GCC EFTA (European Free Trade Assoc: Switzerland, Norway, Liechtenstein & Iceland) GCC Australia - in near future GCC New Zealand - in near future
was part of the intensive process and tabling of the draft schedules of concessions, which was commensurate with the objectives of the Government to augment the current liberal policy on trade in goods. On the services process, the UAE has already submitted an initial offer which is in line with the on-going reform process. Recently, new collective requests have been received from certain WTO members and are under consideration. The United Arab Emirates is fully committed to WTO principles. The world is becoming increasingly small as globalisation affects us all. Today, unless a nation recognises these global trends and pays attention to their directions, that nation will be left behind, eventually becoming marginalised. The United Arab Emirates is not such a nation.
1.11 Free Trade Agreements

The UAE has adopted an open-minded approach in pursuing high-standard, WTO-consistent FTAs with its trading partners, in recognition of the potential of such agreements to reinforce global trade liberalisation. Bilateral Agreements In March 2005, the UAE ofcially started negotiations with the USA with the aim to conclude a comprehensive Free Trade Agreement (FTA). Negotiations are still in process. A Trade Investment Frame Agreement (TIFA) was signed between the two countries in March 2004. The UAE has also signed bilateral preferential agreements for trade with Syria, Jordan, Lebanon, Morocco and Iraq. GCC FTAs As a committed member of the GCC, the UAE has also signed joint FTAs with some other countries and regional economic blocs. At GCC level the EU is the primary one in terms of trade agreements, followed by China, Pakistan and India. To avoid conicts between bilateral under-takings and commitments as a GCC member, the GCC Heads of States have agreed that any new preferential agreement concluded by one of its members will apply pari passu to all members, except for agreements with the United States. The UAE is also a member of the Greater Arab Free-Trade Area (GAFTA) in which all GCC States participate.
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1.12 Direct Investment Policy

The UAE strongly believes that the private sector (both local and foreign) is the true engine of growth in the long run and that FDI brings in transfer of knowledge and expertise in areas that are not the countrys core competencies. Moreover, FDI sustains investment condence and creates employment. Finally, the partnership with foreign investors opens new market opportunities due to the creation of new networks. To this end, the Ministry of Economy has been given the mandate, from the UAE Cabinet, to champion a National Investment Reform Process that includes several relevant parties and aims at making the UAE more conducive to investments. The MOE is currently preparing a federal Unifed Foreign Investment Code, which will serve as a one-stop-shop law reecting government policies towards foreign investments. The law will regulate the foreign investors investments, open up sectors or sub sectors for foreign investors, create an institutional framework dealing with investors, promote specic investment opportunities, describe investment guarantees and facilitate start-up procedures. Opportunities exist in most economic sectors with access to the Arab market of around 300 million consumers. Foreign investors can now benet from: 100 percent foreign ownership in any of the UAEs Free Trade Zones no taxes (on all sectors excluding banking) no restrictions on repatriation of capital Investment Framework The UAEs investment policy is implemented through licences, the basic requirement for all business. Licensing procedures vary from emirate to emirate; they apply differently to local free movement of labour (less than 22 percent of the population are UAE nationals) negligible barriers to entry (the effective tariff rate is 5 percent for most goods) The UAE maintains the belief that income tax exemptions encourage an increase in FDI and a more vibrant private sector development. All free zones therefore benet from zero income tax. Moreover, the UAE believes that a balanced public budget is conducive to economic growth. According to the World Bank, foreign direct investment in the UAE reached US$12 billion in 2005. Leading sectors attracting FDI are oil and gas eld machinery and services, power and water, computers, medical equipment, Reform of the Investment Framework Currently discussions are underway in the UAE to re-examine the Federal Commercial Law that limits foreigners to minority stakes in local rms (the historical cap of 49 percent) and a new Companies Law will be announced in 2007. Under this new law some sectors will be liberalised by a decision of cabinet of ministers. Such a decision would be binding on the government with no reversal possible. The main objective is to further diversify the economy. The reform of the current investment framework (through amendments to the Company Law) is perceived as one of the most important ways to materialise this objective and attract more Foreign Direct Investment to support this endeavour. telecommunications, and franchising. The bulk of FDI has been directed into real estate projects, and into the free zones. Jebel Ali Free Zone in Dubai in particular has estimated annual revenue of over US$8.5 billion. The bulk of the companies in Jebel Ali are active in the assembly of electronic products, light engineering and manufacturing, as well as in distribution services beneting from low costs, efciency enhancing infrastructure, and logistics services. and foreign companies, but are publicly available and transparent. For example, in Dubai, there are three categories of licences: 1. Industrial licences for industrial activities 2. Professional licences covering all services and artisans 3. Commercial licences covering all kinds of trading activities Licences can be obtained only by domestic companies that are majority-owned by UAE nationals, or by 100 percent foreign-owned branches, which must appoint a local services agent or sponsor. This does not apply in the free zones.
STOCKS OF THE COMPANIES OF DIRECT FOREIGN INVESTMENTS DISTRIBUTED IN INDUSTRIAL SECTORS
Real Estate and Commercial Enterprises 10.5% Mining and Energy 19.0% Construction 4.3% Health and Education 0.4% Transformational industry, water and electricity supply 29.5% Wholesale and retail trade, maintenance of engine vehicles and personal commodities 21.7% Financial mediation 6.6% Transport and storing and communications 6.2% Others 1.9%
The UAE is keen to develop the following sectors: ICT Financial Services Electronics and Engineering Industrial Technology Healthcare Biological and Life Sciences Education and Knowledge Industries Tourism Service industries
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CHAPTER 1
1.13 Legal Framework

Full information on the Commercial Companies Law and the Trade Agencies Law are available at www.economy.ae. Main Federal Trade-Related Laws in the UAE
Laws GCC Common External Customs Tariff GCC Common Customs Law of 1 January 2003 (Decision of the Supreme Council of the GCC regulating the customs procedures for the establishment of the customs union; 21-22 December 2002) Federal Law No. 18 of 1981 concerning the organisation of commercial agencies, as amended by Federal Law No. 14 of 1988 and Federal Law No. 13 of 2006. Federal Company Law No. 8 of 1984 concerning commercial companies and the amending laws thereof Federal Law No. 5 of 1975 Federal Law No. 5 of 1985 Federal Law No. 18 of 1993 UAE Federal Order No. 16 of 1975 (the public tenders law) Ministerial Decision No. 20 of 2000 on Administration of Contracts System Federal Law No. 7 of 1976 establishing the State Audit Institution Federal Law No. 1 of 1979 organising industrial affairs Federal Law No. 7 of 2002 concerning copyrights and neighbouring rights Federal Law No 37 of 1992 on trademarks as amended by Law No. 8 of 2002 Federal Law No. 17 of 2002 on the industrial regulation and protection of patents, industrial drawings and designs. Federal Law No. 4 of 1983 on the Pharmaceutical Profession and Pharmaceutical companies Federal Insurance Law No. 9 of 1985 Ministerial decision (Minister of Economy and Commerce) No. 333 of 2004 regulating the activities of foreign insurance companies Federal Law by Decree No. 3 of 2003 regarding the organisation of the telecommunication sector, the amended Federal Law of 1991, and the Executive Order of the Supreme Committee No. 3 of 2004 Federal Law No. 4 of 1985 and Federal Law No. 8 of 2001 Federal Law No. 10 of 1980 concerning the Central Bank, the monetary system and organisation of banking Federal Law No. 4 of 2000 (Stocks and Commodities Authority) Federal Law No. 23 of 1991 concerning the practice of the advocate profession and amending laws, respectively, No. 20 of 1987, 1997 and No. 5 of 2002 Subject Tariff Customs regulations; import and export procedures; rules of origin Regulation of commercial agencies (exclusive distribution rights) Commercial companies law Commercial register Civil transactions (Civil Code) Commercial transactions Government procurement Government procurement Government procurement Industrial projects Copyright Trade marks Industrial patents Pharmaceutical profession and pharmaceutical companies Insurance services Insurance services Telecommunications Postal services Banking and nancial intermediation services Securities regulation Legal services
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1.13(a) Federal / Local Constitution

According to the Constitution, federal authority responsibilities include foreign affairs, security and defence, nationality and immigration issues, education, public health, currency, postal, telephone, and other communications services, air trafc control, the licensing of aircraft, and labour relations. Each emirate has jurisdiction in all matters not assigned to the exclusive jurisdiction of the Federal Government. At the emirate level, governments differ in size and complexity. The emirates of Abu Dhabi, Dubai, Ras Al-Khaimah, and Sharjah have similar local government structures, while in other emirates the ruler has a diwan his ofce through which the concerns of citizens may be directed to the government. The largest emirate, Abu Dhabi, has its own central governing council, the Executive Council, presided over by Crown Prince Sheikh Mohamed bin Zayed Al Nahyan. Its Eastern and Western regions are headed by an ofcial with the title of Rulers Representative, and its main cities are administered by municipalities, each of which has a nominated municipal council. Abu Dhabi also has a legislative branch at the local government level, which has a role similar to that of the Federal National Council. Its National Consultative Council comprises 60 members elected from among its main tribes and families and is chaired by a Speaker. The Council provides a forum for its members to voice concerns and suggest introduction or revision of federal legislation. The Council is also vested with powers to question ofcials and examine and endorse local legislation. There is a similar pattern of municipalities and departments in each of the other emirates. Under the Constitution each emirate is permitted to relinquish national powers to the Federal Government. Important examples of this are the decision to unify the armed forces in 1976 and the relinquishment by each emirate of the right to join the Organisation of Petroleum Exporting Countries (OPEC) and the Organisation
of Arab Petroleum Exporting Countries (OAPEC). Overall, modern and traditional government structures co-exist and evolve together. The concept of holding the open majlis or council, a traditional means for the people to voice their opinions, concerns and complaints to their rulers, has remained relevant. In the majlises, for example, discussions between sheikhs and other citizens may address a variety of issues including economic and foreign policy, matters concerning unemployment, or specic individual requests. The Federal Government provides the broad framework for policymaking in the UAE; however, most key decisions are made at the emirate level.
Federal Law No. 8 (1980) governs the rights, responsibilities and employees. Other laws relating to industry include Federal Law No. 14 (1992) regarding the establishment of the Department of Standards and Specication and Federal Law No. 44 (1992) for the regulation and protection of industrial ownership of inventions and designs. Local governments, the Free Zones and the Federal Environment Agency have issued various laws and regulations related to industry. Industrial projects that wish to manufacture medicines have to obtain the prior approval of the Ministry of Health. In order to provide a more exible and transparent incentive scheme, a committee has been formed to modify the Industrial Law which and duties of employers
1.13(b) Industrial Law

The main legislative instrument governing industrial affairs is Federal Law No. 1 of 1979. Local industrial production is dened as that in which local manufacturing accounts for not less than 25 percent of the total. The law applies to all industrial projects other than those of the federal government, oil and gas extraction and rening, mineral raw materials rening and small projects with a xed capital of less than AED250,000 or employing fewer than ten people. The law appoints an industrial committee under the chairmanship of the Minister of Finance and Industry. The committee studies applications for the setting up of industrial projects and any exemptions and incentives and decides by a majority. The law requires that at least 51 percent of the capital to be local and that the manager and majority of board members are UAE citizens. The law stipulates that industrial projects should employ a minimum of 25 percent local labour. However, the minister may reduce or waive this requirement if insufcient national citizens are available for the position. Ministerial Decision No. 51 (1986) gives preference to local products in terms of government procurement provided such goods are equivalent in quality to foreign products and not more than 10 percent more expensive.
is due for completion in 2007.
Foreign equity
will not be dealt with by this new law but will instead form part of the companies and foreign investment codes.
1.13(c) Company Law and its Update

The UAE is keen on progressive liberalisation in a wide range of its service sectors. This is especially important given that services now account for over 50 percent of the countrys GDP. The UAEs initial offer on services, is in line with the policy objectives set by the Government and its reform process that is currently under way. The Federal Companies Law is in the process of being amended allowing the Council of Ministers to determine the sectors that non-nationals can operate in and the foreign equity participation thereof, which may be up to 100 percent in sectors that would be specied in a cabinets decision. Once a decision has been issued, sectors included and foreign equity participation may not be reduced. As for natural resources, this sector is excluded from the Federal Companies Law of the UAE, and according to Article (23) of the Federal Constitution of the UAE, ownership of all natural resources is vested in each individual emirate and not the Federal Government. Any foreign equity
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CHAPTER 1
in projects related to natural resources in the UAE is determined by the competent authorities of the local government of the emirate, in which the natural resources are located. Each emirate practises its right in accordance with its development needs, requirements for investment, technology, and technical know-how. Currently, there are some companies working in the natural resources sector (including the petroleum sector) in the UAE with foreign equity up to 100 percent. Commercial Agencies According to the UAE Commercial Agencies Law (Federal Law No. 18 of 1981, as amended by Federal Law No. 14 of 1988 and Federal Law 13 of 2006), foreign investors may have an agent to represent their interests in the UAE. The Law regulates and governs the appointment of commercial agents, representatives, and distributors. This law denes a commercial agency as any arrangement whereby a foreign company is represented by an agent to distribute, sell, offer, or provide goods or services within the UAE for a commission or prot (Article 1 of the Law). The Commercial Code (Federal Law No. 18 of 1993) augments the Commercial Agencies Law and establishes the regulatory framework for the various types of commercial agencies permitted. The most common type of agency is the contracts agency, whereby the agent undertakes on a permanent basis and in a specic area of activity, the instigation and negotiation of the conclusion of deals, to the advantage of the principal and in return for payment (Article 217 of the Code). Distributor contracts are treated like contracts agencies when they involve one agent as the sole distributor (Article 227 of the Code). Primary Requirements of Commercial Agencies: 1. Commercial agents must be UAE nationals or companies incorporated in the UAE and owned entirely by UAE nationals. 2. Commercial agents must be registered with the UAE Ministry of Economy.
3. The agency agreement must be registered in order for the agent to avail itself of the protections afforded under the law and to have the agency relationship recognised under UAE law. 4. Commercial agents are entitled to an exclusive territory encompassing at least one emirate for the specied products (Article 5(1) of the Law). 5. Unless otherwise agreed, commercial agents are entitled to receive commissions on sales of the products in their designated territory irrespective of whether such sales are made by or through the agent (Article 7 of the Law). 6. Commercial agents are entitled to prevent products subject to their agency from being imported into the UAE if the agent is not the consignee. The Commercial Agency Law provides for compensation of the agents terminated without due cause only if the agency agreement has been registered with the federal Ministry of Economy. Many UAE commercial agents will insist on a registered arrangement in order to avail themselves of the protection of the Commercial Agencies Law. The Federal Law concerning commercial agencies does not necessitate that importing activities, wholesale and retail distribution services should be reserved for exclusive agents; there are other types of agencies. But in the case of exclusive agents, it merely provides that whenever an agency contract is concluded and registered in the Ministry of Economy, the importing of the subject matter of the contract to the geographical area specied in the agency contract should be reserved for the exclusive agent. This general rule has been diminished by the Cabinets Decree that was recently adopted which amends Article 23 of the Federal Law concerning Commercial Agencies providing that no commercial agency might be the subject matter of any commercial item liberalised by a decree of the Cabinet and therefore, all registered agencies for such items should be cancelled. (The Commercial Companies Law and Agencies Law can be downloaded at www.economy.ae)
Amendments Introduced under the New Law The new amendments made under UAE Federal Law No. 13 of 2006 to original law no. 18 of 1981 have the following effect: 1. A statement that the commercial agency contract runs for the duration of its term. At the conclusion of the term, the commercial agency shall be deemed to have expired unless the parties have agreed to extend it. Upon such expiry of the term of the agency contract and at the request of either party, the Ministry shall then deregister the agency unless the Ministry receives an application from the parties expressing their mutual desire to renew the contract for a further term. Hence, the term of the commercial agency runs parallel with the term of the agency contract. If the agency contract is for a xed term, the commercial agency will run for that period and will expire at the end of the contract term. If the agency contract is for an unspecied term, then the agency and its registration shall continue indenitely unless the parties agree to terminate the agency or change the contract to a xed-term contract (without the involvement of the Ministry of Economy). The Article further states that a commercial agency may only be deregistered by mutual agreement of the parties or pursuant to court order. Therefore, where the parties to a xed term agency contract wish to terminate the contract summarily, or either party to a non-xed term agency contract wishes to terminate the contract, termination can only occur by bringing the matter before the court and it ordering deregistration pursuant to the parties arguments in court. 2. A statement that if the termination of an agency has caused damage to either of its parties, the aggrieved party may recover compensation for the damage which he has suffered. This right is given to both parties and not just to one party at the expense of the other. 3. Conrmation that no goods of a commercial agency may enter the UAE except through the
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registered agent. If goods are the subject of a registered commercial agency, such goods may be seized and can only be released with the consent of the Ministry or agent. Furthermore, the seizure will remain in force pending the resolution of the dispute over the goods entering the country. However, the Article contains a new provision concerning goods which have been classied as exempt and goods which may be traded and imported into the UAE regardless of the existence of a commercial agency. The provision aims to protect certain goods by stipulating that even if an agent already exists, such goods may be imported into the UAE, whenever necessary or whenever required by the UAE economy to prevent monopoly, and pursuant to a Cabinet decision. 4. The Law repeals Articles 27 and 28 which provided for the referral of any dispute to the Committee set up under the Ministry of Economy. The members of the Committee had to be representatives of the emirates. The Committee was competent to decide any dispute that arose between an agent and principal and the matter could not be referred to court unless it had rst come before the Committee. Articles 27 and 28 were repealed entirely so as to do away with the Committee at the Ministry of Economy. Therefore, in the event of any dispute arising between the parties, either party may approach the courts which have original jurisdiction over any commercial dispute.
competition within the telecommunications sector. Various model laws are being considered. The GCC Secretariat has submitted a draft for a unied GCC competition law, which the UAE is currently examining. The Ministry of Economy has the mandate to develop and implement the Competition Law. Recent inationary pressures have led to the exemption of basic food items from the scope of the Trade Agency Law. Currently, anti-competitive practices are dealt with on a case-by-case basis by the Ministry of Economy, in consultation with the Ministry of Finance & Industry and the chambers of commerce. However, the UAE government is committed to developing a highly competitive market with low import duties and the absence of non-tariff barriers. There are no a priori price controls, but the Ministry of Economy monitors the prices of 15 goods, mainly food products, in order to contain the negative effects of cartels and other anticompetitive practices. The Federal Government and the emirate governments have a role in the price determination or approval of a number of services, including telecommunications, postal, and medical services. Electricity, water, and gas prices are set by state-owned companies at emirate level.
The new law protects the rights of consumers in the market by giving them full freedom in making a choice and returning or substituting faulty items, as well as other rights safeguarded by the new law. The Ministry of Economy is setting up a special department to supervise the general policy on the protection of consumers and regulating prices. The department will also ensure fair competition in the market and will team up with other concerned bodies to ensure consumer awareness. The new department will do so by educating consumers about their rights and how to secure those rights. It will also set up a hotline in the ministry to receive complaints from consumers. The law states that commodities put on shelves for sale must have tags clearly displaying price. The law re-afrms federal law no. 18 of 1981 and its amendments which deal with the organising of commercial agencies in a way that every commercial agent or distributor must give all the necessary guarantees that producers or commercial agents give on their commodities.
1.13(f) E-Commerce Law

The UAE E-Commerce Law carries a maximum 15-year prison sentence and a ne of up to AED100,000 for cyber crimes such as interception, modication, data theft, interference and sabotage of networks, hacking and virus distribution. The law protects the privacy of internet users, information systems and programs as well as electronic correspondence and online government information and documents. The law also tackles computer-related crimes, including computer fraud, computer forgery and aiding and abetting cyber criminals. There are severe penalties for criminal activities, including child sexual abuse, abusing the internet to promote terrorism or thoughts that contravene public order and ethics and money laundering. Other offences, such as internet fraud, hacking credit cards, identity theft, computer intrusions and others involving the use or targeting of computers or networks will carry tough penalties.
1.13(e) Consumer Protection Law

Federal law no. 24 of 2006 concerns consumer protection. The law called for the setting up of a special committee to be known as the Higher Committee for Consumer Protection under the chairmanship of the Minister of Economy. Two representatives from the Emirates Society for Consumer Protection are to be included among the committee members. The Cabinet is to issue a decree to set up the committee and determine its prerogatives. It will also issue a decree for the setting up of a Consumer Protection Department at the Ministry of Economy and enact a law giving the Minister the power to take the necessary action to stop any unnecessary price hikes and to protect the interests of consumers.
1.13(d) Draft Competition Law

In order to protect consumers from groundless price increases, the UAE Government plans to introduce a Competition Law in 2007. This is in line with the strategy of the UAE government to create an enabling business environment that is conducive to economic growth. Sector specic competition policies exist and are enforced. In particular, the Telecommunications Regulatory and when Authority necessary, (TRA) issues policies directives concerning
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CHAPTER 1
The law is applicable to all offences, even those committed partially or totally outside the country if they harm the countrys interests. This legislation aims to facilitate the exchange of e-mails via reliable electronic records, to allow better transfer of electronic documents to government bodies and enhance the availability of government services via reliable e-mail connections, to facilitate and promote e-commerce and transactions at local and international levels by using e-signature, to limit forgery and amendment of e-correspondence, especially to the benet of e-commerce and other transactions, and to establish uniform principles and rules related to the documentation and safety of electronic correspondence.
1.13(i) Plans for Import / Export Laws

The UAE is planning to issue an Export Control Law which will provide further incentives and benets to foreign investors.
years (non-renewable) from the date of ling the application. The law enables the patent holder to prevent others from manufacturing, importing, offering for sale, selling, using or otherwise keeping for the purpose of selling or using the product, or using the method. To conform to Article 28 of the TRIPS Agreement, the amendment specied the rights of the patent holder in preventing others from using it. The 2002 amendment also extended the coverage of the protection of innovations to all elds of technology, including agriculture, hunting, shing, handicrafts, and services, covering both product and method of processing. Previously, inventions dealing with the chemistry of drugs or pharmaceutical compounds, as well as inventions in foodstuffs were excluded from coverage. They are now covered by Article 66 of the law. Exceptions (from patentability) exist for plant and animal research, or biological processes for the production of plants or animals, with the exception of microbiological processes and products; scientic principles and discoveries; diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and inventions related to national defence or that would be contrary to public order and morality. Micro-organisms are patentable. The supervisory ministry for IP matters is the Ministry of Finance and Industry. Since the entry into force of the TRIPS Agreement, it has opened a register for ling patent applications for inventions concerning pharmaceutical and agricultural chemical products. The Patent
1.13(j) Intellectual Property Laws

Since the inception of the Federation of the UAE in 1971, Intellectual Property Rights (IPR) have been protected in accordance with the general principles of law. From 1992 onwards, specic pieces of legislation have been enacted with the aim of further strengthening and enforcing protection of IPR. The UAE is amongst the leading countries in the protection of IPR and this was conrmed by recent international reports. The country is rmly committed to ensuring the enforcement of Intellectual Property Rights. There is a special department in the Copyrights and IPR Ofce for combating counterfeiting and piracy, which directly coordinates with different sectors of the government such as the municipalities and police. The UAE is a member of the following treaties: the WIPO Convention, since September 1974; the Paris Convention (industrial property), since September 1996; the Berne Convention (literary and artistic works), since July 2004; the PCT (Patent Cooperation Treaty), since March 1999; the WIPO Copyright Treaty (WCT), since July 2004; the Rome Convention, since January 2005; and the WIPO Performances and Phonograms Treaty (WPPT), since June 2005. Patents The 1992 Patent and Design Law No. 44 provides for the protection of a patent granted for any invention that is the result of an innovative idea, or for an improvement on a patented invention, whether in relation to a new industrial product, an industrial process or method or to the application of a known industrial process or method. The law was amended in November 2002, to ensure conformity with the provisions of the TRIPS Agreement. The term of patent protection was increased from 15 years renewable for ve additional years, to 20
1.13(g) Arbitration Law

The UAE has joined the UN convention for arbitration a global agreement that allows for the enforcement of trade dispute arbitration decisions in member countries. This is a move that will boost business condence in the country. On November 20th 2006, the UAE joined the United Nations Commission on International Trade Law, giving UAE courts powers to enforce arbitration awards made in foreign countries. Domestic companies doing business globally and foreign investors looking at opportunities in the UAE will benet from the country becoming a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This will make resolving disputes easier and fairer for all parties doing business in the UAE and boast the prevailing investment climate. The new law conrms that the UAE respects agreements between parties to refer any disputes to private arbitrators rather than the courts of the UAE or of any other state.
and Designs Law provides for non-exclusive compulsory licensing, after the lapse of at least three years after granting the patent. An applicant must prove that efforts have been made to obtain a licence from the patent owner on reasonable conditions. The licence should be for the purpose of fullling the demands of the local market. Article 23 of the Patent and Designs Law stipulates that the importation of the product is not sufcient ground for granting a compulsory licence. No compulsory licence has so far been
1.13(h) Plans for Investor Laws

The UAE is planning to issue an Investor Law which will provide further incentives and benets to foreign investors. This law will also deal with equity of foreign investors.
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granted. There is no provision on parallel imports of patented products. Industrial Designs Industrial designs are protected by the Patent and Design Law (Article 51) and the related 1993 Decree No. 11 (Articles 45-49). The holder is accorded exclusive rights over imports of any product related to the industrial design, or processing of such a product for the purpose of offering it for sale or selling it. All industrial designs must be registered by the Ministry of Finance and Industry (the Directorate of Industrial Design). The provisions on industrial designs under the Patent and Industrial Design Law also apply to integrated circuits (Articles 43-51). Protection is granted for ten years, renewable once for ve years. Layout of Integrated Circuits (topographies) Computer programs are protected by the 1992 Copyrights and Neighbouring Rights Law No. 40. The 2002 amendment has brought under its scope computer program applications, as well as compilations of data. The law now provides for clear provisions to deal with the situation foreseen in the derogation from Article 36 as specied in Article 37 of the TRIPS Agreement, whereby a person has no knowledge or reasonable grounds to know when acquiring an integrated circuit or an article incorporating such an integrated circuit that it contains an unlawful topography. The provisions on industrial designs under the Patent and Industrial Design Law also apply to integrated circuits (Articles 43-51). Protection is for ten years, renewable once for ve years. Copyright and Related Rights The 1992 Copyrights and Neighbouring Rights Law No. 40 is the main legislation protecting copyright. It was amended in 2002. The amendment provides more detailed measures to enforce copyright in line with the provisions of the TRIPS Agreement. In particular, the amendment is designed to meet the obligations arising from Article 9 of the TRIPS Agreement (Berne Convention, Articles 1-21, except Article 6 bis), Trademarks The 1992 Trademarks Law No. 37 is the main legislation protecting trademarks. Article 2 of the law considers as trademarks, among others, signs that take a particular form if they are used to distinguish goods, products or services, or to indicate that the products, goods or services are the properties of the owner of the mark. Sound constitutes an element of the trademark if it accompanies the trademark. The law also contains provisions on well-known marks. The Trademarks Law allows the court to delete the registration of a trademark if it is determined that the mark has not been used effectively during ve years, unless the owner justies the non-use of the trademark. The 2002 amendment of this law added that the non-use of the trade mark should not be a reason for the deletion, if it is due to reasons not related to the ownership of the trademark. Trademarks Geographical Indications The Trademarks Law does not contain a denition of geographical indications as such. However, geographical indications can be considered as trademarks if they are used to distinguish goods or services with regard to their production, selection or commercialisation. Geographical indications related to alcoholic beverages cannot be registered in the UAE. Under the Trademark
Industrial designs are protected by the Patent Law
through the extension of the works and types of expression covered as well as the nature of the protection. The amendment introduces the exclusive right to exploit, under the rental right, literary works, including computer programs and cinematography work. Copyright protection is for 50 years.
registration is renewable indenitely. The Ministry of Economy is the supervisory ministry for issues related to trademarks. The Trademark Law does not contain provisions with respect to parallel imports or to national or international exhaustion of rights. However, the owner of a trademark may, by a written notarised contract, grant to any person a licence to use the trademark (Article 30). The licence has no effect on third parties unless it has been recorded in the Register and published as prescribed in the Executive Regulations. According to the authorities, the Trademark Law could, as a result, be invoked by the owner of the trademark to prevent parallel imports; no such case has so far been led in the UAE. (The Trademark Law can be downloaded at www.economy.ae)
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CHAPTER 1
keep it condential. According to the authorities, the term of protection of undisclosed information in the pharmaceutical sub sector is, in practice, ve years. Enforcement The Copyright Law, the Patent and Design Law, and the Trademarks Law provide measures to prevent violation of intellectual property rights, including preventive seizure, conscation, removal or destruction of products and equipment, as well as elimination of the effects of the illegal acts, and compensation. Punitive Law No. 3 of 1987 species imprisonment of up to three years for IPR violation. Customs can take measures at the border to prevent any violation of intellectual property rights, in accordance with the above-mentioned laws as well as under Customs regulations. These measures can be taken upon demand of the right holder based on a judicial order. Articles 37-42 of the Trademark Law dene
Pharmaceutical products are subject to special laws
one of the important bases in its environmental policies for the present and future generations. The UAE has nalised its National Environmental Strategy and the National Environmental Plan in line with international best practice. During the past three decades, the UAE has achieved major steps in sustainable development and is one of the leading countries in the region with regard to protection of the environment. The Federation has also signed many regional and international conventions that are concerned with climate, protection of the environment from pollution, and combating desertication, underlining the commitment of the UAE towards environmental protection. Over the past decade, the UAE has established four environment protection agencies: the Federal Environmental Agency (FEA), established in 1993; the Environment Agency in Abu Dhabi (formerly the Environmental Research and Wildlife Development Agency - ERWDA), established in 1996; the Environmental and Protected Areas Authority, in Sharjah, established in 1998; and the Environmental Protection and Industrial Development Commission in Ras Al-Khaimah, established in 1999. Their activities do not have a direct impact on trade, except for issues related to the international conventions mentioned above. No taxes are levied for environmental purposes. Environmental-Related Trade Measures The UAE prohibits the import of certain products for environmental or health reasons, or in accordance with international conventions, in respect of transboundary movements of hazardous wastes and their disposal (Basel Convention), chemicals (Rotterdam Convention on prior informed consent), and products of animals and plants (Appendices I, II and III of CITES convention). Federal Law No. (24) of 1999 species that No public or private party or qualied or unqualied persons are allowed to import or bring, bury or dispose of hazardous wastes in any form in the UAE. The handling of hazardous chemicals and waste in the UAE falls under the Regulation on Handling of Hazardous Substances, Hazardous Wastes and Medical Wastes.
penalties with regard to counterfeit, imitation, misleading practices, and fraudulent use of registered trade marks. Unlimited nes of at least AED5,000 can be levied, as well as unlimited prison sentences (up to three years under the Punitive Law). The Copyrights Law lays down similar procedures, with minimum detention of two months (up to three years under the Punitive Law), and nes of AED10,000-50,000. Articles 60-62 of the Patent Law also lay down criminal sanctions and monetary penalties in the range of AED5,000-100,000. Imprisonment is for at least three months, and up to three years under the Punitive Law.
Law, a trademark that misleads consumers about the origin of a product cannot be registered. Protection of Undisclosed Information Article 1 of the Patent and Industrial Designs law denes know-how as the technical information, data or knowledge that results from professional experience and is applicable in practice. Article 39 states that know-how shall be protected against any unlawful use, disclosure or communication by third parties, unless it has been published or made available to the public. In addition, the bylaws of the 1992 Patent Law (1993 Decision No. 11 of the Ministerial Council) lay down procedures to ensure the protection of know-how. As regards pharmaceutical products specically, Law No. 4 of 1983 related to pharmaceutical institutions and the pharmacy profession and its by-laws provide for the establishment of a committee in charge of pharmaceutical registration and pricing. All condential information submitted to it must be kept condential, provided the owner has undertaken the necessary steps to
1.13(k) Environmental Laws

Sustainable development has been an increasingly important objective of public policy, and it is now an essential component of government policy. Environmental concerns are an important element in sustainable development in UAE. The UAE adopted the Johannesburg Declaration on Sustainable Development, and has always recognised the importance of conserving environmental resources, something that became
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Sheikh Zayed bin Sultan Al Nahyan, Founder and First President of the UAE
WAM
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CHAPTER 1

The United Arab Emirates

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

1.2 Federal Government and the Political System

Maktoum, who succeeded his brother after his

Um Al Quwain Ajman Sharjah Dubai

Khor Fakka Fujair

ZIRKU ARZANAH DALMA SIR BANI YAS MERAWAH

SAADIYAT Port Zayed

Investors Guide to the UAE

is based on its population: Abu Dhabi (8); Dubai

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

1.3 Federal Ministries

Investors Guide to the UAE

Population Results 2005 by Emirate

Population Results by Age Groups and Nationality 2005

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

1.5 Business Culture and Tips on Business Etiquette in the UAE

Investors Guide to the UAE

1.6 Economic Transformation of the UAE

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

the worlds cranes! While construction is not an

United Arab Emirates Saudi Arabia Qatar Bahrain Oman Kuwait

78.4 74.1 49.3 90.3 245.8 N/A

1.7 The UAE and its Potential

Investors Guide to the UAE

Sheikh Mohammed bin Rashid with Microsofts CEO

FACTORS CONTRIBUTING INFLATION

AED billions 178 18 22 80 162 28 488

Imports Commodities Free-zones exports

AED billions 283 76

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

UAE GDP PER CAPITA COMPARED TO GCC COUNTRIES

1.8 Economic Data

Investors Guide to the UAE

GROSS DOMESTIC PRODUCT (BY SECTOR) 2006

AVERAGE OIL PRICES PER BARREL 65% 53.5% 36.9% 28.1%

Source: UAE Ministry of Economy

OIL SECTOR CONTRIBUTION TO UAE GDP 35.7% 37% 31.9% 28.4%

1.9 Federal Budget 2007

Contributions to GDP by Emirate (2005)

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

infrastructure AED 6.5 billion.

1.10 World Trade Organisation

Belgium & Lux. 5-Mar-04

Investors Guide to the UAE

1.11 Free Trade Agreements

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

1.12 Direct Investment Policy

STOCKS OF THE COMPANIES OF DIRECT FOREIGN INVESTMENTS DISTRIBUTED IN INDUSTRIAL SECTORS

Source: Ministry of Economy

Investors Guide to the UAE

1.13 Legal Framework

Investors Guide to the UAE

THE UNITED ARAB EMIRATES

1.13(a) Federal / Local Constitution