United Arab Emirates - Country Commercial Guide
Digital and Information Communication Technology (ICT)

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-08


The UAE, a leading hub for international trade and business in the MENA region, is a competitive market for the Information Communication Technology (ICT) industry. In a bid to reduce dependence on oil revenue and grow the private sector, the Abu Dhabi Economic Vision 2030 and the UAE Vision 2021 government initiatives set out to build a competitive knowledge economy and establish an open, efficient, effective, and globally integrated business environment. The UAE government is taking several steps to prompt the development of the knowledge economy.  

The UAE government has established a number of FTZs such as Dubai Internet City (in 1999) and Dubai Silicon Oasis (in 2005) that specialize in the ICT industry and act as industry clusters for high technology and innovation. Within these zones, firms are allowed 100% import and export tax exemptions, 100% repatriation of capital and profits, and corporate tax exemptions for 50 years, on a renewable basis. These minimal trade barriers have made the UAE, and Dubai specifically, the preferred location for businesses serving the entire Middle East and North Africa and this is also driving demand for IT software and services from the private sector.  

Investment is also driving the demand for ICT products and services, in sectors such as healthcare, space, aviation, aerospace and defense, transportation, retail, financial services, hospitality, and those sectors linked to the UAE’s economic diversification plans such as manufacturing and real estate. UAE ICT market challenges include the relatively high cost of internet access and bandwidth and its exposure to cybersecurity risks. To attract foreign companies and develop human capital resources, the UAE government has established the UAE ICT Fund, which educates hundreds of Emirati students overseas in the ICT field. Moreover, the UAE’s SmartPass system has created a digital framework for the operations of all government services and ministries, and the UAE Strategy for Artificial Intelligence (AI) 2031 plans for AI technology to be incorporated into these services. These vast government projects will require the expertise and services of foreign firms, and many American companies may have a comparative advantage with advanced technologies and innovations.  

Leading sub-sectors 

Cloud Computing 

The UAE is one of the largest data center hubs in the Middle East and more are planned. Up to $1 billion in additional investments are projected by 2026. In 2019, Microsoft launched two cloud regions in Dubai and Abu Dhabi. In 2021, Amazon Web Services announced plans for a new data center region in the UAE. The new region will consist of three availability zones and is set to open in the first half of 2022. 

With the exponential investments by the UAE government in cloud computing, and the UAE’s competitive business laws, as well as strong technological infrastructure, the sector is forecasted to continue expanding in the years ahead. Public cloud hosting in the UAE has addressed variations in resources and expertise efficiently through highly specialized solutions. Despite these significant expansions, there is still sizeable room for development that will require the expertise and know-how of American firms.  


The UAE’s geopolitical position and importance to the world economy in the energy, oil & gas, and aviation industry make the UAE vulnerable as a target of cyber-attacks, driving rapid growth in the cybersecurity market. The Emiratis report the highest number of malware incidents among consumers in the GCC. To protect the UAE’s critical data information infrastructure and improve national cybersecurity, the government introduced the UAE Information Assurance Standards which are a set of guidelines for government entities in critical sectors. Compliance with these standards is mandatory for all government organizations and businesses that are identified as critical infrastructure in the UAE. Several local players have been developing cybersecurity capabilities to capitalize on rising demand, while international IT security firms are expanding their presence in the country. With leading technology experts stating that the number one priority for UAE firms remains cybersecurity, the market is expected to continue expanding. 

The Dubai government launched the Dubai Cyber Security Strategy, which involves five main domains: becoming a cyber-smart nation (through public awareness), innovation through research, user cybersecurity (confidentiality and privacy), cyber resilience (maintaining the non-stop availability of IT systems), and national and international collaboration in the realm of cyberspace. All the UAE development initiatives also drive the demand for cybersecurity, which will provide many opportunities for American companies. 

Internet of Things 

Internet of Things (IoT) opportunities include smart services, the industrial internet, and machine-to-machine communications. There are applications in the public sector for smart cities and telehealth, and enterprise applications include smart metering, asset tracking, and production optimization. The UAE has emerged as a leading global location for the deployment of IoT solutions to enhance public infrastructure, especially Dubai as it aims to become a leading smart city. There is a foundation of cooperation across multiple sectors including ICT, power, transportation, infrastructure, healthcare, and government. Due to the high level of government interest in developing IoT in the UAE, spending on IoT is estimated to exceed $37 billion by 2020, with a CAGR of 31%. Telecom leader Etisalat announced that, in cooperation with Emirati authorities, it is planning a mass IoT introduction into the UAE market.  

Artificial Intelligence 

Artificial Intelligence (AI) is a priority in the UAE. AI is forecast to play a role to contribute almost 14% of the national GDP by 2030 ($96 billion), and the annual growth in the AI contribution to the UAE economy is forecast to grow by 33.5% between 2018 and 2030. As part of the government’s UAE Centennial 2071 plans, the UAE AI Strategy 2031 was launched to improve efficiency in the transport, health, space, renewable energy, water, technology, education, environment, and traffic sectors. To achieve this, the UAE recently appointed its first Minister of Artificial Intelligence. The UAE has already begun integrating AI with industries such as education, healthcare, space, transportation, and aviation. AI is a key part of the ambitious plans of the UAE government to diversify their economy and become a knowledge economy. The race between Gulf states to have the newest and most sophisticated technology, particularly in the field of AI, provides a large market in which U.S. firms have comparative advantages. 

Smart Cities 

In a bid to transition away from dependence on oil, the UAE has made significant investments into projects for smart cities, with goals to build smart cities from scratch and improve infrastructure in existing cities. Since October 2013, the Dubai authorities have undertaken a mission to transform Dubai into a smart city, with innovations centered on six key areas: transport, communications, infrastructure, electricity, economic services, and urban planning. The Digital Dubai Authority was established to support the city-wide initiative to transform Dubai into the world’s smartest and happiest city. In October 2021, the Dubai Paperless Strategy helped the government achieve over 98% of its government transactions digitally. 

Examples of initiatives include the provision of public Wi-Fi, electric car charging stations, live traffic monitoring, and an eWallet for the Roads and Transport Authority, highlighting how there are tech-related opportunities for American companies in all sectors of the Emirati economy. UAE authorities will want to maintain the reputation of the UAE as a leading smart country, and continuous public sector investments in large-scale infrastructure projects revolving around ‘smart’ building will continue growing, providing opportunities for American companies. 


The UAE was the first country in the Arab region and fourth globally to launch its 5G network. Both Du and Etisalat, the nation’s leading telecom companies, launched limited 5G networks in 2019, along with the 5G-enabled ZTE Axon 10 Pro smartphone to both post-paid and pre-paid customers. By the end of 2023, it is estimated that 16 million 5G smartphones will be operational in the region. With the UAE being at the forefront of technological advances and given the strong GDP per capita, demand for 5G services is predicted to be strong over the coming years. In June 2021, Etisalat revealed a 6G project that is estimated to be around 100 times faster than 5G. They have invested in 6G realization by conducting research and developing international standards that are the main building blocks for the 6G ecosystem. The rollout and expansion of the telecom network and infrastructure in the UAE will offer many business opportunities for American companies.   


The UAE continues to grow in the technology space. Private and public sector players are seeking to modernize by adopting state-of-the-art solutions and catch the broader global wave of innovation, data utilization, digital transformation, and technological advancement. The UAE’s desire to diversify and build a knowledge economy is creating new opportunities, and the government has set aside large parts of the budget to achieve the ambitious Vision 2021, Abu Dhabi Vision 2031, and UAE AI vision 2031 plans. Technology players continue to see the potential to grow their business in the UAE.   

According to Business Monitor International (BMI), the software and services segments have seen significant investment in areas such as cloud computing, smart services, and cybersecurity. IT spending in the UAE is forecast to increase at 6.5% over 2020-2023 to reach a total of $8.2 billion. Software and services demand will drive IT spending growth over the medium term, especially demand from large industries for solutions around cloud computing, data analytics, cybersecurity, and IoT. The hardware segment will also see healthy growth as the market tilts towards high-end power users and workstation purchases from the enterprise and commercial sectors. 

UAE IT Market Forecast 2019-2023
UAE IT Market Forecast 2019-2023

There is also growth expected in the demand for business management software. Key verticals include process manufacturing, followed by the finance sector, where regulatory compliance and new services, including Islamic banking, will help to create opportunities. The UAE is expected to spend more than $5.3 billion on IT enterprises in 2021, which will lead to the development of more facilities across the country. The increasing regional and global orientation of the UAE economy is a major driver for locally-based small and medium-sized enterprises to enhance the efficiency of their operations.