Dubai is one of the seven emirates that make up the United Arab Emirates on the Arabian Peninsula. Dubai is the second largest emirate in the federation after Abu Dhabi and its main city, Dubai “city”, is the largest city in the UAE. The Population of the UAE is approximately 3.7 million with Dubai carrying a population of 1.7 million. Dubai has become an important tourist destination and is diversifying as an important hub for service based industries. The government has set up enclaves for industry specific corporations and continues to be proactive in developing an infrastructure to attract foreign investment and business.

Dubai is the third most important re-export center in the world (after Hong Kong and Singapore) and is diversifying as an important hub for service based industries. Dubai presents international businesses with a wide range of opportunities for different activities and operations.

The incentives of setting up business in Dubai include a free enterprise system, no corporate or personal taxes on income or capital, no foreign exchange controls and a stable, freely convertible currency, sophisticated services sector, air links to over 130 destinations worldwide via some 90 airlines, leading center for tourism and leisure activities in the Middle East and a cosmopolitan lifestyle, tolerant, and virtually crime-free environment.

Although the wealth of the UAE as whole is based on the oil and gas output (about 33% of GDP), most of the oil is situated in the Emirate of Abu Dhabi. In recognition of this fact, Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defense Minister, has focused on development of the non-oil sector in Dubai. Economic growth in the non-oil sector reached 8.4% in 2000.

One of the greatest achievements in Dubai was the establishment of the Jebel Ali Port and the Jebel Ali Free Zone. More than 3800 companies operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption. A major power plant with associated water desalination units, an aluminum smelter, and a steel fabrication unit are prominent facilities in the complex. Except in the free trade zone, the UAE requires at least 51% local citizen ownership in all businesses operating in the country.

The information industry in particular has been lavishly courted by Dubai. In 2000, Dubai Internet City opened at a cost of $250m. This is a zone of tax-free trading based on the Jebel Ali Free Zone model, designed to appeal to large information technology companies and “knowledge professionals” from around the world. The list of tenants includes Dell, Siemens, HP, Microsoft, Oracle and Cisco Systems. For media companies there is the adjacent Dubai Media City, opened in 2001, and now home to CNN, MBC, Reuters and Dow Jones, among others.

Sheikh Mohammed, often referred to as the emirate's chief executive, has dedicated himself to turning Dubai into a business, tourism and aviation hub. He hopes to attract 15m visitors a year to Dubai by 2010. The annual Dubai Shopping Festival (DSF), launched in 1995, now fills hotels to 100% capacity and can generate extra sales of up to $1.5 billion and draws shoppers from Europe, Asia and from and around the region. Other, smaller shopping festivals such as Dubai Summer Surprises are held throughout the year. The city has many malls such as City Centre, Bur Juman, Mercato, Lamcy Plaza, Al Ghurair Centre and Wafi Centre that house international stores, theaters, gaming arcades and food courts. Currently under development is an entertainment complex called Dubailand, the Palm Island and Burj Dubai, the tallest building in the World. Dubailand includes a theme park and the Mall of Arabia, which will be the largest shopping mall in the world. Dubailand is slated to open in 2006. Dubai is also home to the Dubai World Cup, the world's richest horse race, held every March. The Burj Al Arab, a luxury hotel built on an artificial island and the second tallest hotel in the world, has become an instant symbol of the city.

Other projects in the works include the Dubai Marina, a $10 billion housing development; a $1.6 billion Festival City; a $150m zoo, as well as the recreation of “Old Dubai”. The most ambitious project, however, is the Dubai International Financial Centre, which aims to turn Dubai into the leading capital market in the Middle East.

Emirates Airlines, the Dubai-based airline, launched in 1985, is equally ambitious. It has turned a profit every year since it began in 1985; in 2003, its net profits climbed to $428m, carrying 23% more passengers than in 2002. In 2003 they were the world's biggest buyer of aircraft, spending $19 billion on Airbus and Boeing jets. In June 2004 Emirates commenced non-stop service to New York, soon to be followed by Chicago and San Francisco. The airline has always welcomed competition—100 airlines now link Dubai to 145 destinations—and in the early 1990s persuaded hoteliers to offer cheap rates for short stays, luring long-haul fliers to rest for a couple of days, rather than just changing planes.

The government's vision to diversify from a trade based, but oil reliant economy to one that is service and tourism oriented, has been conducive to the growth of real estate corporations such as Emaar properties and Jumeirah International. Corporate office enclaves on Sheikh Zayed road were developed to shift Dubai's traditional business area from the creek to the western parts of the city. Modern Dubai, with its glass skyscrapers, lavish hotels and 21st-century business ambitions, seems a far cry from the city that existed even 30 years ago. Today, much of Dubai’s trade comes from multinationals. But Dubai has been a regional trading hub since the 16th century.

A trip to downtown Deira, by the mouth of the creek, provides first-hand evidence of modern Dubai’s links with its past. The thriving Gold Souk, now a busy tourist attraction and the throng of traditional wooden dhow ships moored on the banks of the creek, still ferrying goods between Dubai and Iran or Sudan, harks back to Dubai’s roots as a humble trading post. No one can question the advances made by Dubai in recent decades; the architectural evidence is everywhere.

Until recently, real estate in Dubai could only be owned by UAE nationals and to a lesser extent, by nationals of other Gulf Cooperative Council (“GCC”) countries. However, numerous new real estate development projects now allow expatriates to own property on a “free hold” basis.

The official language is Arabic, but English, Hindi, Urdu and Malayalam are widely spoken. Islam is the only officially recognized religion. A vast majority of the people are Sunnis. There are foreign minority Hindus and Christians as well.

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