United Arab Emirates - Country Commercial Guide

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

Last published date: 2020-09-12


The United Arab Emirates (UAE) ranks among the top 15 defense spenders in the world according to Business Monitor International (BMI), and was the fifth-largest arms importer worldwide in the period 2009–18, according to the Stockholm International Peace Research Institute. The UAE defense expenditure as a percentage of GDP has remained comparatively high in recent years in response to rising Islamist extremism in the region, persistent tensions with Iran, and the UAE’s participation in the Saudi-led coalition’s military efforts in Yemen.

Accurate information pertaining to UAE defense expenditure has been scarce since 2016. According to BMI and GlobalSecurity, the UAE’s 2016 defense expenditures stood at approximately $23.4 billion. GlobalSecurity reported that the UAE registered a compound annual growth rate (CAGR) of 4.5% during 2016 and projects the country’s defense expenditure will grow at a CAGR of 6.5% to $31.8 billion by 2021. On a cumulative basis, the country is expected to invest $140.8 billion for defense purposes, of which $53.1 billion is earmarked for capital expenditure to fund defense procurements.

Key Stakeholders

Abu Dhabi is investing in the UAE’s defense sector to advance the country’s strategic interests and diversify the economy. There is significant public investment in the EDGE group, formed in 2019 to consolidate over 25 entities including the Emirates Defence Industries Company (EDIC), Emirates Advanced Investments Group (EAIG), Tawazun Holding, and others. The EDGE group has revenue of over $5 billion, and its 12,000 employees work across five verticals: platforms & systems, missiles & weapons, cyber defense, electronic warfare & intelligence, and mission support.

According to multiple sources, at the 2019 International Defense Exhibition and Conference (IDEX), the UAE signed contracts worth an estimated $4.5 billion. Domestic manufacturers won many of those contracts, which is a sign the indigenous defense industry is growing.

Offset Program

The Tawazun Economic Program, which is overseen by the Tawazun Economic Council, is the UAE’s program that seeks to capitalize on the country’s extensive defense procurements. The key objectives of the program include developing the defense sector, creating a knowledge economy, economic diversification, private sector opportunities, high-value exports, and employment opportunities for UAE nationals in high-tech fields. Tawazun issued new offset guidelines in 2019. While the focus will continue to be on development of the defense and security industry in the UAE, Tawazun will also consider projects in strategic industries including aerospace, infrastructure & transportation, communication technology, education technology, sustainability, environment & climate change, and food & water security.

A company incurs offset obligations if the value of the supply contract is equal to or more than $10 million, and if the value is less than $10 million, but the company, or a parent company, already have active offset obligation. Other changes to the new policy guidelines were changes to the project process. The project duration and milestones for investment and contractual engagement project categories are, by default, set at seven (7) years commencing from the effective date, unless otherwise agreed. For the capability development project category, the project duration is, by default, set at three (3) years commencing from the effective date, unless otherwise agreed. Additional information can be found at: https://www.tawazun.ae/.

Foreign Military Sales (FMS) and Direct Commercial Sales (DCS)

The UAE procures defense equipment through FMS, DCS, and hybrid routes. Many procurements contain both FMS and DCS components.  Advocacy via the Advocacy Center at the U.S. Department of Commerce is available to level the playing field on defense procurements, and the commercial and defense team at the U.S. Embassy works together to support U.S. companies.

Cooperation between the United States and the UAE

The U.S. and the UAE enacted a Defense Cooperation Agreement in 2019, which updated the 1994 defense accord. The agreement will enhance the robust military-to-military cooperation that the UAE and United States already enjoy. The agreement also enhances cooperation between the two nations at critical times and allows the United States to send more troops and equipment to the UAE. There are currently 5,000 U.S. military personnel stationed at UAE military facilities.

Leading Sub-Sectors

The UAE is a net importer of military assets, and the country is open to all suppliers. However, the government is working to reduce its dependence on defense imports through the development of its own defense manufacturing capability. The UAE Air Force and Air Defense traditionally receive the lion’s share of the UAE’s total defense procurement dollars, followed by the Joint Aviation Command, Land Forces, the Presidential Guard, and the Navy.

The UAE’s procurement priorities include missile defense, precision fires, intelligence, surveillance and reconnaissance (ISR), command and control, expeditionary logistics, and maintenance, repair, and overhaul. The UAE GHQ Critical Infrastructure & Coastal Protection Authority (CICPA) is expanding rapidly and is tasked with protecting key infrastructure such as water desalination plants, oil and gas platforms, pipelines, and the Barakah nuclear site.


To support Abu Dhabi’s emirate-wide strategic framework plan – Abu Dhabi Vision 2030 – the Abu Dhabi government is focused on importing knowledge to strengthen the Advanced Military Maintenance, Repair, and Overhaul Center (AMMROC). AMMROC is a joint venture between Mubadala, a strategic investment arm of the Abu Dhabi government, and the U.S. firms Sikorsky Aerospace Services and Lockheed Martin.

Over the last few years, the UAE has forged a number of partnerships to develop its local capabilities. Recently, Tawazun announced the establishment of another two business lines: Advanced Pyrotechnics, which will focus on the manufacturing of non-lethal ammunitions, and Al Hosn Armored Systems, which will produce protective personal gear.

Lockheed Martin partnered with Sweden-based Exechon and Abu Dhabi-based Injaz National to establish a machining center in the UAE.

Canadian WESCAM announced a partnership with ADASI to open a center in Abu Dhabi for the maintenance and repair of its imaging and targeting systems.

U.S.-based Orbital ATK formed a subsidiary in the UAE with Al Tuff.

Indian Reliance Defense Limited reportedly signed a cooperation memorandum of understanding with EDIC.

The UAE Armed Forces currently outsources a number of non-core military service activities, such as aircraft and equipment maintenance and military training to UAE and non-UAE-based private and government contractors. This arrangement underlines the UAE Armed Forces’ focus on professionalizing its core units to ensure they are well adapted and able to face and counter any threat.


While the UAE defense sector is promising and offers great opportunity, U.S. companies face several challenges in the market. Defense tenders in the UAE often lack transparency and clarifying information is often difficult to ascertain. Procurement requirements may be withheld or changed with minimal or no notice. In addition, negotiations and requirements can be quite challenging.


Trade Shows and Exhibitions

International Defense Exhibition and Conference (IDEX)

Date: February 21-25, 2021

(Check with the Association of the U.S. Army for updates)

Venue: Abu Dhabi National Exhibition Center - Abu Dhabi, UAE

Dubai Airshow

Date: November 14 – 18, 2021

Venue: DWC, Dubai Airshow Site - Dubai, UAE

Key Websites

EDGE Group

Tawazun Economic Council

Advanced Military Maintenance Repair Overhaul Center

Critical Infrastructure & Coastal Protection Authority