2017 Index of Economic Freedom

United Arab Emirates

overall score76.9
world rank8
Rule of Law

Property Rights76.7

Government Integrity74.2

Judicial Effectiveness85.0

Government Size

Government Spending67.4

Tax Burden96.4

Fiscal Health99.2

Regulatory Efficiency

Business Freedom81.1

Labor Freedom80.9

Monetary Freedom78.4

Open Markets

Trade Freedom83.5

Investment Freedom40.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 9.6 million
  • GDP (PPP):
    • $647.8 billion
    • 3.9% growth
    • 5.0% 5-year compound annual growth
    • $67,617 per capita
  • Unemployment:
    • 3.7%
  • Inflation (CPI):
    • 4.1%
  • FDI Inflow:
    • $11.0 billion
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Recent years’ broad-based and dynamic growth in the United Arab Emirates has been underpinned by continuous efforts to strengthen the business climate, boost investment, and foster the emergence of a more vibrant and diverse private sector. The generally liberal trade regime has helped to sustain momentum for growth. The UAE aims to be a regional financial hub, and its banking sector is resilient.

Overall fiscal soundness is well maintained, although the non-oil deficit has widened as the government’s overall surplus has fallen. Coordinating the various emirates’ fiscal policies and improving the transparency of public finances remain critical tasks. Keeping the legal framework effective and independent will be vital to continuing to attract dynamic foreign investment.



The United Arab Emirates is a federation of seven monarchies: Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al-Khaimah, Sharjah, and Umm al-Qaiwain. The Federal Supreme Council (the seven rulers of the individual emirates) selects the president and vice president for five-year terms with no term limits. Abu Dhabi ruler Sheikh Khalifa bin Zayed al-Nahyan has been president since November 2004. In 2011, the government responded to protests calling for greater political participation by expanding the number of people allowed to vote in the September 2011 Federal National Council elections. Since 2012, the UAE has clamped down on social media activism.

Rule of LawView Methodology

Property Rights 76.7 Create a Graph using this measurement

Government Integrity 74.2 Create a Graph using this measurement

Judicial Effectiveness 85.0 Create a Graph using this measurement

Each emirate establishes its own land ownership procedures. Although the judiciary is not independent and court rulings are subject to review by the political leadership, the rule of law is generally well maintained, and the UAE is considered one of the region’s less corrupt countries. A campaign to reform public services was launched in 2015, but the most significant government decisions are still taken only by the emirates’ ruling families.

Government SizeView Methodology

The UAE has no income tax and no federal-level corporate tax. There are different corporate tax rates for certain activities in some emirates. The overall tax burden equals 19.0 percent of total domestic income. Government spending has amounted to 33 percent of total output (GDP) over the past three years, and budget surpluses have averaged 3.5 percent of GDP. Public debt is equivalent to 19.4 percent of GDP.

Regulatory EfficiencyView Methodology

There is no minimum capital requirement for establishing a business, and licensing requirements have been streamlined. Employment regulations are relatively flexible, and the nonsalary cost of employing a worker is not high. In 2016, the IMF commended the government for eliminating fuel subsidies, raising tariffs on water and electricity, and scaling back grants and transfers to government-run enterprises.

Open MarketsView Methodology

Trade is extremely important to the UAE’s economy; the value of exports and imports taken together equals 176 percent of GDP. The average applied tariff rate is 3.2 percent. In general, foreign investors may own majority stakes in companies outside of “free zones.” State-owned enterprises distort the economy. The financial sector provides a full range of services, but the state presence is considerable. Capital markets are open and vibrant.

Country's Score Over Time

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Regional Ranking

rank country overall change
1United Arab Emirates76.94.3
7Saudi Arabia64.42.3

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