Successfully investing in the United Arab Emirates

last updated on 10 October 2025 | reading time approx. 3 minutes

How do you assess the current economic situation in the UAE? »
How would you describe the investment climate in the UAE? Which sectors offer the largest potential? »
What challenges do German companies face during their business ventures into the UAE? »
How does the UAE differ from its neighboring countries? »
In your opinion, how will the UAE develop? »

How do you assess the current economic situation in the UAE?

Despite global economic uncertainties, the United Arab Emirates continues to demonstrate robust and growth-oriented economic performance in 2025. The government is consistently pursuing an active diversification strategy to reduce dependence on the oil and gas sector. Through national initiatives such as UAE Vision 2031, Operation 300 bn, and the Green Growth Strategy, the country is actively expanding non-oil sectors and promoting sustainable economic development. The International Monetary Fund forecasts a 5.1 percent increase in the UAE’s real GDP for 2025, while the UAE Central Bank anticipates even stronger growth, projecting a 6.2 percent rise.

Although diversification efforts are accelerating, the energy sector remains a key pillar of the economy. Most recently, OPEC+ (Organization of the Petroleum Exporting Countries) granted the UAE an increased production quota, which will lead to higher revenues from oil exports and provide additional funds for implementing new futureoriented projects. Simultaneously, the UAE government is making substantial investments in emerging and diversified growth sectors, signaling a long-term vision for economic resilience and innovation.

How would you describe the investment climate in the UAE? Which sectors offer the largest potential?

The United Arab Emirates continues to position itself as one of the most attractive investment locations in the MENA region. With the liberalization of key economic sectors to allow 100 percent foreign ownership, along with business-friendly tax policies, including a competitive corporate tax rate of only 9 percent above a defined profit threshold – the UAE offers compelling opportunities for international companies seeking market entry and expansion.

Governmentled initiatives such as UAE Vision 2031, Operation 300 bn, and the Green Growth Strategy are actively reshaping the nation’s economic landscape. These strategies aim to diversify beyond oil and gas by fostering high-growth sectors and advancing a knowledge- and technology-driven economy. Notable examples include the construction of one of the world’s largest AI data centers – the 5 GW AI Campus in Abu Dhabi – signifying the country’s strategic push toward digital innovation.

Sustainability and renewable energy also play a central role in the UAE’s economic transformation. Ambitious developments in solar energy, green hydrogen, and carbon-neutral industrial initiatives, such as the Mohammed bin Rashid Al Maktoum Solar Park, underscore the government’s commitment to environmental leadership and green technology.

The logistics sector continues to benefit from the UAE’s strategic location at the crossroads of Asia, Europe, and Africa, supported by world-class infrastructure such as Jebel Ali Port and Al Maktoum International Airport (DWC). The latter is poised to handle up to 150 million passengers annually within the next decade, with future capacity targeted at 260 million passengers and 12 million tons of cargo per year.

Key growth areas – including artificial intelligence, renewable energy, logistics, aerospace, tourism, financial services, and construction – are receiving increased investment and policy support. Together, these trends reflect the UAE’s broader objective: the development of a diversified, resilient, and future-ready economy.

What challenges do German companies face during their business ventures into the UAE?

Introduction of Corporate Tax: As of June 2023, the United Arab Emirates has introduced a federal corporate income tax, marking a historic shift in the country’s fiscal policy. A standard tax rate of 9 percent now applies to annual taxable profits exceeding AED 375,000. This significant reform aligns the UAE’s tax framework with global best practices and reflects the government’s broader commitment to economic diversification and modernization.

Expansion of Emiratisation Requirements: Effective 2024, the UAE has broadened its Emiratisation policy to include smaller businesses operating within specific sectors. The updated regulations require businesses to hire and integrate Emirati nationals into their workforce, reinforcing the government's focus on sustainable employment and the development of local talent. For foreign companies, this shift presents both a compliance

requirement and a strategic opportunity: by proactively engaging with the local labor market, companies can build resilient, locally rooted teams and establish long-term workforce stability.

Enhanced Compliance and Transparency Regulations: In response to international standards set by organizations such as the Financial Action Task Force (FATF), the UAE is tightening its regulatory requirements related to anti-money laundering (AML), ultimate beneficial ownership (UBO), and tax transparency. As a result, companies operating in the UAE face increasingly comprehensive reporting and disclosure obligations. While these developments may increase administrative requirements, the growing regulatory framework also enhances legal certainty and strengthens investor confidence in the UAE as a business destination.

How does the UAE differ from its neighboring countries?

The United Arab Emirates is positioning itself as a frontrunner of the Energiewende in the Middle East, pursuing ambitious goals to transform its energy system. By 2030, the UAE aims to significantly decarbonize its national power supply and transform its energy mix, with a central focus on renewable energy – particularly solar power. A flagship initiative in this effort is the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, set to become one of the world’s largest solar power facilities with a projected capacity of 5 gigawatts by 2030.

The UAE is utilizing a combination of photovoltaic (PV) and Concentrated Solar Power (CSP) technologies.

In parallel, the UAE is modernizing its national electricity infrastructure through smart grids and advanced battery storage systems, ensuring efficient distribution and reliability of renewable energy across the grid.

Under the UAE Energy Strategy 2050, the nation has set a long-term goal of generating 50 percent of its energy from clean sources by 2050. A substantial share of electricity is expected to be emission-free as early as 2030. These goals are supported by robust government incentives, international cooperation, and strategic investments in research and development – most notably through platforms such as Masdar, which leads global initiatives in sustainable energy innovation.

In your opinion, how will the UAE develop?

The United Arab Emirates will continue to advance as an innovation-driven, globally focused economic hub. Digitalization, artificial intelligence, and green technologies remain central to the country’s economic transformation, aiming to further reduce reliance on the oil sector and develop sustainable new sources of revenue. At the same time, the UAE is strengthening its role as a global logistics and trade hub. Major projects such as the expansion of Al Maktoum International Airport and Smart City initiatives in Dubai and Abu Dhabi highlight the commitment to creating modern, interconnected economic and living environments.

In its commitment to climate protection and sustainability, the UAE is investing heavily in solar energy, green hydrogen, and carbon-neutral technologies, establishing itself as a regional frontrunner in green innovation. This transformation extends beyond economic and technological progress – labor and education reforms, new visa policies, and initiatives to promote women in leadership are helping to build a more inclusive and forward-thinking society.

By integrating economic diversification, technological advancement, and social progress, the UAE is strengthening its reputation as one of the Middle East’s most attractive destinations for investment, appealing to both German and international businesses.