Saturday, February 25, 2006

Dear America

With all the baloney about DP World controlling some ports in the US, I replied to a comment on Secret Arabian. An American commenter had expressed curiosity about exactly how 'free' trade is in the UAE. He'd heard that foreigners could not have full control of their businesses. Here's my reply:

Foreign ownership of companies in the UAE goes like this: generally, you need a local partner, and that partner will own 51% of the business. In Free Zones, however, foreign individuals and companies can own 100% of their business. There is no corporate or income tax in the UAE.

It is likely that the 51/49 ownership rule will be relaxed or revoked in the next few years. Free Zones in Dubai include Jebel Ali port (an enormous industrial area), Internet and Media Cities, Airport Free Zone and Dubai Healthcare City. There are many other Free Zones in the pipeline in Dubai, so whatever kind of business you want to invest in, you will be able to do it without a local partner.

Dubai realises how important FDI is, and that is why they are setting up all the Free Zones (I'm sure Dubai would love to abolish the local partner thing altogether, but that's a UAE Federal law, so it's not so easy).

In terms of Middle East reaction to the cartoons, the UAE has been very moderate. There have been protests and there is a boycott of Danish goods (misguided in my opinion), but there is one thing you absolutely have to understand about the UAE. It is the most liberal country in the region.

It supports the West in numerous ways. It is staking its future on being the friendly face of the Middle East: anyone (who has the money!) can come and live and work and do business here. It is not in the interests of this country to encourage terrorism or extremism in any form. You need to remember that the country is only 30 years old, and what it has achieved in that short time is absolutely mind-blowing.

No response from the anon American yet.

Labels: ,