How Dubai Became One of the Richest Cities in the World (2024)

FAQs

How did Dubai become the richest country in the world? ›

Dubai and the UAE have zero income tax for individuals and low rates of taxes for businesses, which attracts people who have high net worth and people who are business owners or entrepreneurs. The business-friendly environment, in general, has been a key driver of its success as a wealth hub in general.

In fact, until the 1960s, Dubai was a small fishing village with a modest pearl industry. The discovery of oil in 1966 changed everything and transformed Dubai into a wealthy city almost overnight.

The oil and the creation of the Riyal, a new currency with the newly independent state of Qatar, enabled Dubai to expand and develop fast. Dubai invested the oil revenues in building the city's infrastructure, which contributed to the tourism boom and economic diversification.

Established in the 18th century as a small fishing village, Dubai grew into a regional trading hub in the early 20th century and grew rapidly in the late 20th and early 21st centuries with a focus on tourism and luxury.

Dubai's wealth can be largely attributed to its strategic location and visionary leadership. Despite having limited oil reserves compared to its neighbors, Dubai's leaders recognized the need to diversify their economy and invested heavily in trade, tourism, and real estate.

How does the Dubai government make money without tax? The Dubai government generates revenue primarily from sources other than direct taxation. This includes fees from licenses and services, real estate transactions, and customs duties.

Income tax

The UAE does not levy a tax on income. There is, therefore, no need for an income tax return in the UAE as there is no applicable individual tax within the country. The same also applies to freelancers and self-employed workers who are residents of the Emirates.

In the United Arab Emirates, for example, $922,000 is the annual pretax income required to bump you into the 1%.

You will need a net worth of $1.6 million to join the UAE's richest 1 per cent, according to global property consultancy Knight Frank.

Why is Dubai so clean? ›

The city is also known for its cleanliness. The government of Dubai has implemented several measures to ensure that the city remains pristine, including a robust waste management system. The city's streets are regularly cleaned, and littering is heavily penalized.

Dubai hosts 72,500 millionaires, of whom 212 are centi-millionaires and 15 are billionaires, while Abu Dhabi is home to 22,700 resident millionaires, including 68 centi-millionaires and five billionaires, the Brics Wealth Report said.

Investors are attracted to Dubai because of cheap labor, which cuts down their costs. Apart from this, corporate-friendly policies of the UAE government have been successful in bringing massive investment in the country. Fewer regulations and low taxes resulted in investment growth in the economy.

Dubai is the world's second-most visited city

The UAE owes a lot of its economic success to international travel. Over the past 25 years, Dubai has made strides to be attractive to foreign visitors, loosening rules around alcohol and investing in flashy infrastructure.

Discovery of oil

Coupled with the joining of the newly independent country of Qatar and Dubai to create a new currency, the Riyal, after the devaluation of the Persian Gulf rupee which had been issued by the Government of India, it enabled Dubai to rapidly expand and grow.

1966. Oil is discovered in Dubai, attracting foreign trade and stimulating the economy, which over several decades diversified with shipping, finance and tourism.

There are two sources of water in the UAE: Desalinated seawater and groundwater. While groundwater is used for agriculture in Al Ain and Liwa, drinking water is provided entirely from desalinated seawater across the Emirates.

Question 1 a) Why did the leaders of Dubai decide they would use globalization as a tool to build future wealth in the emirate? In one sense they had little choice. The emirate did not have rich oil reserves like their neighbours and had few other natural resources of note.