The United Arab Emirates and its bridgehead Dubai have experienced dazzling economic growth for 20 years, based on oil wealth. But the regional rival of Saudi Arabia and Qatar has decided to diversify by attracting investors with very advantageous conditions to become a hub, at the heart of the activities of three continents. RFI offers you a special file.
6 mins
From our special correspondent in Dubai,
What strikes you first when you travel through the city of Dubai, extended over tens of kilometers, this is the unfinished aspect of its construction. Roads that stop dead, buildings under construction until late at night and the possibility of expanding much further, in the desert or on the waters of the Persian Gulf. Palm Jumeirah, an artificial peninsula in the shape of a palm tree, forever symbolizes this gigantism assumed by the authorities of the regional rival emirate ofSaudi Arabia and Qatar. Tower Burj Khalifa 828 meters high (a world record) is integrated into an urban and commercial complex. The play of light and reverberation on the skyscrapers of Downtown Dubai with its sometimes fascinating architecture contribute to this feeling of vertigo.
In the coming years, this strategy must be extended into the sky with a major extension project for Al Maktoum international airport, located around forty kilometers from the center of the city. On April 28, 2024, Sheikh Mohammed bin Rashid Al-Maktoum, ruler of Dubai and Prime Minister of the United Arab Emirates, announced the construction of a new terminal to make this airport the largest in the world with a capacity of 260 million passengers per year, much more than in Atlanta or Beijing , the current leaders. This is five times more than the current Dubai International Airport, already the busiest in the world in terms of foreign travelers but whose location, close to the city center, prevents expansion. For the first phase of the project alone, nearly $35 billion must be deployed. The desire is therefore clearly displayed to welcome more and more visitors attracted by an offer geared towards both leisure tourism and business tourism. The luxury sector is a major element of this offer. “ Tourists come from all over the world with increasingly diverse origins “, explain Geoffroy Bunetel, President of the France-United Arab Emirates Chamber of Commerce and Industry and Chief of Staff of the Group’s President Chalhoub, a group born in Syria before settling throughout the Middle East. “ There are a lot of Indians, Chinese, Russians and more and more Africans. »
A mega-laboratory for the energy transition
The hotel infrastructure is also in full development. A concrete city, which some consider disconnected from climate issues, artificial, without soul, and which also hides profound social inequalities. But we can also see the fruit of collective energy, of a cosmopolitan project (Dubai is made up of 90% expatriates). Some come simply to earn a living to escape poverty in their country of origin, often in South Asia (Indonesia, Philippines, India and Sri Lanka in particular). Others want to succeed in business and benefit from the international influence of this new platform of the world economy, at the geographical crossroads of ascending Asia, the essential West and Africa in the making. Finance, tourism, real estate, luxury, the emirate has been able to focus on promising sectors in the 21st century. Beyond Dubai, the UAE’s gross domestic product has quintupled over the past 20 years to exceed $500 billion.
Because if the oil windfall has historically been the keystone of its rise to power, Dubai has made the resolute choice to diversify its economy. Devoid of large industrial groups, the emirate welcomes investors from all over the world to deploy infrastructure and an energy policy thanks to nuclear, hydrogen and solar energy. “ It’s a mega-laboratory in terms of size », says François Dao, vice-president ofEDF-Renewables for the Middle East and Africa, manager of Mohammed bin Rachid Al Maktoum solar park in the desert, an hour’s drive from Dubai and Abu Dhabi. “ The fact of not having a land problem, of having natural resources (solar and wind) allows for acceleration and rapid deployment in other countries around the world such as India, Egypt, Morocco or South Africa. » Have the United Arab Emirates really taken steps to limit the effects of global warming with the development of renewable energies? The authorities, who organized the COP28 in November 2023, they assure. Environmental organizations are much more skeptical. One weakness nevertheless remains difficult to compensate for in the short term: due to the arid climate and the limited supply of drinking water, the United Arab Emirates import a very large part of their agri-food needs.
Dubai attracts Africans
These are all markets that interest foreign companies, like those supported by Business France. “ The Gulf population is young and ultra-connected »explains to our microphone Axel Baroux, general director of Business France for the Near and Middle East. “ Most of the world’s mega-projects take place in the region. So it attracts French companies, but also our competitors. It’s a hyper-competitive area. » A bet that decided to try Digital Virgo, a company specializing in mobile payment. Pascal Dufour, vice-president in charge of the Middle East, Turkey and North Africa, thinks that “ the problem is finding local talent » with very minority local populations. “ Young people need to be trained in professions of the future such as energy transition without depending on administrations or oil companies. »
Valérie Hawley, director of Sorbonne Artificial Intelligence Research Center (SCAI) created in 2020 in Abu Dhabi, think that ” the Emirates have demonstrated the desire to have a knowledge economy by 2030. And to even be technology exporters. There is a significant way to go to train local talent and develop intellectual property. They have this desire to create a research ecosystem “.
The business environment and living environment of the United Arab Emirates and Dubai also attract more and more Africans who benefit from simpler air connections than with Europe. And those who come to settle sometimes occupy executive positions like the Senegalese Amadou Diallodirector of the logistics giant DHL for the Middle East. “ I think that today it is a little more difficult for young Africans to go to Europe because there are obvious prejudices. Visa procedures are extremely complicated. It’s the same thing for the United States. So Dubai has positioned itself to ensure that talent comes. This is why Dubai is doing better than other countries before, whether it is Singapore, China, European countries or America ».
Dubai, an ambitious and controversial tax policy
The United Arab Emirates have put in place incentive measures to attract foreign businesses and investors: administrative facilities and a very favorable tax framework. For tax residents in Dubai, the income tax rate is set at 0%. No taxation on assets either.
The corporate tax rate is also very advantageous. In the free zone (free zone dedicated to foreign capital), it is a total exemption. In the rest of the country (for the local market), what we call the “mainland”, it is 9%. This is much lower than the rate charged in France (25%), Germany or the United States (around 30%). In addition, annual taxable profits of up to 375,000 AED (Emirate Dirhams) or approximately 95,000 euros are exempt. “Golden visas” are granted to investors, entrepreneurs and those with recognized exceptional talent.
On the other hand, foreign banks operating in the “mainland” (local Dubai market) will now be taxed at 20% of their taxable income. The law was promulgated by the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. A decision which officially aims to increase public revenue to escape dependence on fossil fuels, but also to strengthen the supervision of financial institutions, prevent money laundering and the financing of terrorism.
After years of suspicion and scandals, conventions have also been signed with many countries, including France. “ The Dubai authorities are playing the game more “, explain Alexander Polaktax lawyer associated with the Coblenz law firm, “ via information exchange agreements. When a French national opens an account in Dubai, the information is sent to Paris. It’s more complicated when it comes to a company. » But ” the Anglo-Saxons are much tougher, there is much more exchange of information “, believes Alexandre Polak. “ The coercive power of their tax authorities is much stronger. »
In September 2018, the Dubai Papers scandal broke out, a leak of thousands of internal documents demonstrating the existence of an international tax fraud network. and an offshore laundering system in the United Arab Emirates via the Helin International pharmacy. The National Financial Prosecutor’s Office (PNF) and the French tax administration are investigating hundreds of people to regularize their situations. In March 2024, a 90-year-old woman and her 64-year-old son received a heavy fine and a suspended prison sentence for aggravated tax fraud and money laundering in connection with this case.
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