Tourism in Dubai is a part of the Dubai government’s strategy to maintain the flow of foreign cash into the emirates. Dubai’s lure for tourists is based mainly on shopping, but also on its possession of other ancient and modern attractions. Dubai got ranked as the world’s 1st most visited city by international tourists that have visited Dubai according to the recently released list and survey of Euro monitor in 2018.
In 2016, the direct contribution of the travel and tourism sector to the UAE’s GDP was AED 68.5 billion (USD 18.7 billion) which is equivalent to 5.2 per cent of the total GDP. It is forecast to rise by 5.1 per cent per annum from 2017 to 2027 to AED 116.1 billion (USD 31.6 billion) which would be equivalent to 5.4 per cent of the total GDP in 2027.
The total contribution of the travel and tourism sector to the UAE’s GDP was AED 159.1 billion (USD 43.3 billion) which is 12.1 per cent of GDP. It is forecast to rise by 4.9 per cent per annum to AED 264.5 billion (USD 72 billion) which would be 12.4 per cent of GDP in 2027.
The travel and tourism sector directly supported 317,500 jobs in the UAE which is 5.4 per cent of total employment. This is expected to rise by 2.4 per cent per annum to 410,000 jobs which would be 5.9 per cent of total employment in 2027.
Below are some of the biggest reasons why a tourism business can flourish in the UAE.
- Central Location:
Dubai is located on the Eastern coast of the Arabian Peninsula, in the south west corner of the Arabian Gulf. It is extremely well known for its warm hospitality and rich cultural heritage, and the Emirati people are welcoming and generous in their approach to visitors. With year-round sunshine, intriguing deserts, beautiful beaches, luxurious hotels and shopping malls, fascinating heritage attractions and a thriving business community, Dubai receives millions of leisure and business visitors each year from around the world. This makes Dubai an ideal city for international trading, export, import, hospitality, tourism and other business activities. With access to both land and sea, Dubai can take part in goods transportation between the West and the East. This strategic location makes it easy for Dubai to access consumer markets in Africa, Asia, the Gulf, Europe and CIS (Commonwealth Independent States) countries.
- Access to both Air and Sea:
The emirate is home to one of the largest air and seaports, Dubai International Airport and Jabal Ali Port, in the world. It is easy to transport goods by land, air and sea from different parts of the world to Dubai. Similarly, it is easy to send goods from Dubai to any parts of the world.
The UAE has the most advanced and developed infrastructure in the region. From roads to airports to telecommunications, the UAE is home to world class facilities that have supported economic growth and enabled the development of business. As the FDI increases, Dubai has been constructing facilities for industrial, residential, tourism and commercial use. These facilities are to help investors and entrepreneurs in setting up their businesses.
Furthermore, the construction of new roads, the new airport, and public transportation facilities have also been taking place. According to WEF’s Tourism Competitiveness Report, the infrastructure in UAE has been listed as the best in the world. UAE ranked second in quality of roads, third in quality of air transportation, fifth in port infrastructure and eight in land transportation network.
- No Taxation Policy
There are no taxes levied by the Federal Government on income or wealth of companies and individuals. Branches of foreign banks are taxed at 20%. As a rule, taxation in the UAE is based on the territoriality concept (and not on the worldwide one).
The UAE is known to have a very diverse economy. Almost all types of businesses have a no taxation policy, except for international banks branches, hotels, and large oil and gas companies. Personal Income Tax, Value-added Tax (VAT), Corporate Tax, Retention Tax and Tax on Capital gains are not applied by the government of Dubai.
- Repatriation of Earnings and Profits
Free Zone, also known as Free Trade Zone, is an area designed to promote the international business in UAE by providing 100% foreign enterprise ownership. Free Zones offer attractive incentives such as no requirement for a UAE national as a local partner/shareholder, tax exemptions on duties and taxes such as Corporate, Personal Income Tax, all import and export duties etc. The businesses in Free Zones are required to obtain the necessary licenses from the respective Free Zone authorities and comply with their guidelines when operating the business in this region.
- Safe to live and high quality of life
Regionally, the UAE retained its top position as the best place to live and work, it said. The survey results revealed that the UAE was rated the best place to live and work globally by professionals seeking career progression, financial security and a great place to raise a family. Crime rates in Dubai are one of the lowest in the world. Moreover, political and security stability is one of the major reasons for the increase in FDI. Dubai provides an ideal environment for businesses to prosper.
Furthermore, as the FDI increased, the standards of lifestyle have also increased. UAE is ranked as the 14th happiest nation in the world, by the UN Happiness Index.
- Visa and Residency
For business owners, operating their business setup Dubai or in other regions of UAE, being a UAE resident can be beneficial. Residents of UAE are allowed to lease spaces for long-terms, they can enter and exit UAE multiple times, open current accounts in UAE Banks, and also obtain a visa for other countries, including countries that make up the Schengen Area.
- Multinational Companies
A multinational corporation (MNC) or worldwide enterprise is a corporate organization that owns or controls production of goods or services in at least one country other than its home country. Dubai is home to many multinational companies’ offices such as Microsoft, LG Electronics, Sony, HSBC, Emirates, BBC World, etc. Furthermore, many universities that are internationally recognized have campuses in Dubai for example, London School of Business, Hult International Business School, Michigan State University, etc.