United Arab Emirates - Country Commercial Guide
Market Challenges

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2020-09-12

Note: The global COVID-19 pandemic and worldwide economic downturn impacted the UAE, as it did every country around the world. The pandemic created an unprecedented economic crisis as oil prices declined, cutting the UAE’s oil revenues significantly, and as the non-oil economy suffered from severe declines in tourism, aviation and trade and logistics sectors.

The downturn made economic projections uncertain. Every effort has been made to use the latest data, yet much of the available data is from 2019, 2018, and recent years. Please contact our office for updates and the latest information.

The economy of the UAE was severely impacted by the COVID-19 pandemic and responding to the health crisis and mitigating economic damage continue to be top government priorities. Real GDP in 2020 is expected to fall by approximately 3.5% before recovering to a growth rate of 3.3% in 2021, according to IMF projections.  In the near term, the UAE’s domestic market is suffering from weak demand by businesses and consumers, a declining real estate market weighted down by oversupply, an exodus of unemployed workers, and cuts to government spending. These factors limit the attractiveness of the UAE as a market, though its position as the premier business hub in the Middle East remains unchallenged.

The UAE is a major regional hub, yet challenges remain for American companies. Highlights include:

On the Plus Side:

  • Ease of Doing Business (World Bank 2020): #16 out of 190 countries.
    • Getting electricity: #1.
    • Dealing with building permits: #3.
    • Enforcing contracts: #9.
    • Registering property: #10.
    • Starting a business: #17.
  • Corruption Perception Index (Transparency International 2019): #21 out of 180 countries.
  • On the Minus Side:
  • Low Ranking areas on the World Bank Ease of Doing Business report:
    • Trading Across Borders:  #92.
    • Resolving Insolvency:  #80.
    • Getting Credit:  #48.
  • Other Common Problems:
    • Receiving payment for completed work.
    • UAE companies attempting to change scope of work after signing the contract.
    • Problems terminating commercial agent agreements even in cases of non-performance.
    • Dispute resolution systems vary in different emirates and can take a lot of time.
    • Increased pressure to hire local Emiratis in certain industries under the government policy of Emiratization.
  • Qatar Dispute:
    • UAE, Saudi Arabia, Egypt and Bahrain severed diplomatic and business relationships with Qatar in June 2017.
    • Companies may seek local legal assistance regarding the implications of this boycott.