Dubai’s path to an oil-independent economy
Looking at the international and cosmopolitan city of today who would have thought that it started off as just a port that sustained via pearl-diving. And then came the era of discovery of oil in the Middle East. Persia (now Iran) was the first site where oil was found in 1908. 1938 saw the discovery of the second largest source of oil in the world in Saudi Arabia. Obviously people took note and started searching in other countries in the Middle East. In 1958, it was the first time that oil was found in UAE and the country as a whole had only seen growth thereafter.
About 94% of oil resources belong to Abu Dhabi, the capital of the country. Dubai holds about 4% of the country’s reserve. Although the second-richest emirate in UAE and the second-highest holder of oil, Dubai knew from the get go that it needed to look at sectors other than oil to sustain its economy as it held low oil reserves and other natural resources. Thus, Dubai became a flag-bearer of diversification.
Oil prices took a hit in 2014 and though it was great news for importers, it caused havoc to the economy of exporters like in the Gulf Co-operation Council (GCC) countries. This dip showed the necessity for diversification. The development and innovation-minded Government of Dubai started leading from the front with investments in non-oil sectors like airlines, logistics and port infrastructure as early as in the 1970s. Retail & trade, financial and business services and other sectors saw Dubai become the business hub that it is today. 5% VAT introduced in 2018 was also a Government’s move to drive the economy towards an oil-independent future.
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A major sector that the Dubai Government had focused on is real estate and constructions. This had led to Dubai having major, record-breaking landmarks which along with its world-class hotels and resorts had fueled the rise of its massive tourist industry which is also a major contributor towards its economy.
The Real Estate sector never found any lack of investors as Dubai’s tax-free business environment attracted them aplenty. But what this also resulted in was oversupply which got worst due to the pandemic. However, 2021 has been seeing a rise in the property market since the second quarter of the year. Dubai Government’s several programs and initiatives like “Vision 2021” and “Centennial Plan 2071” which aims to make it the best city in the world by 2071 are causing the economy to bounce back at a faster pace.
The EXPO 2020 that opened on October 2021 had been attracting tourists as well as property investors to Dubai. It is expected to keep doing so. Moreover, the new visa policies with long term investor visa Dubai, UAE options along with the option of various property visas is an immense boost to Dubai’s real estate sector.
With this rise in potential, it is a perfect time to form one’s business in the Real Estate sector. Flyingcolour Business Setup Services has been helping clients since the past 17 years. For any queries or assistance please feel free to mail at info@flyingcolour.com or contact us at +971 4 4542366.
