2016 Index of Economic Freedom

United Arab Emirates

overall score72.6
world rank25
Rule of Law

Property Rights55.0

Freedom From Corruption70.0

Limited Government

Government Spending76.1

Fiscal Freedom95.0

Regulatory Efficiency

Business Freedom79.6

Labor Freedom80.7

Monetary Freedom81.3

Open Markets

Trade Freedom82.8

Investment Freedom45.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 9.3 million
  • GDP (PPP):
    • $599.8 billion
    • 3.6% growth
    • 4.0% 5-year compound annual growth
    • $64,479 per capita
  • Unemployment:
    • 3.6%
  • Inflation (CPI):
    • 2.3%
  • FDI Inflow:
    • $10.1 billion
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The United Arab Emirates is competitive in many areas of economic freedom. Barriers to trade are quite low, and regulations support open-market policies. With a favorable business climate and political stability, the UAE has created a dynamic entrepreneurial environment for international investors. The financial sector’s overall soundness has improved substantially since the Dubai debt crisis of 2009.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 72.6 (up 0.2 point)
  • Economic Freedom Status: Mostly Free
  • Global Ranking: 25th
  • Regional Ranking: 2nd in the Middle East/North Africa Region
  • Notable Successes: Open Markets and Regulatory Efficiency
  • Concerns: Property Rights and Corruption
  • Overall Score Change Since 2012: +3.3

Despite regional political and security instability, the rule of law has been relatively well maintained. The perceived level of corruption has declined, but the judicial system remains inefficient and susceptible to political influence.



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 for greater political plurality with a multi-year infrastructure investment in the poorer northern emirates and by expanding the number of people allowed to vote in September 2011 elections for the Federal National Council. Since 2012, the UAE has clamped down on social media activism. Home to many multinational firms that operate in the region, the UAE has a modern communications and transportation infrastructure.

Rule of LawView Methodology

Property Rights 55.0 Create a Graph using this measurement

Freedom From Corruption 70.0 Create a Graph using this measurement

Although the UAE is considered one of the Middle East’s least corrupt countries, most decisions of any significance are made by the various emirates’ ruling families. The judiciary is not independent, and court rulings are subject to review by the political leadership, but the rule of law is generally well maintained. Each emirate is allowed to decide on how ownership of land may be transferred within its borders.

Limited GovernmentView Methodology

The UAE has no income tax and no federal-level corporate tax. Different corporate tax rates exist for certain activities in some emirates. There is no general sales tax, and the overall tax burden equals 22.4 percent of total domestic income. Government spending amounts to 28.2 percent of total domestic output. Large oil revenues have kept the government budget in surplus and public debt below 15 percent of GDP.

Regulatory EfficiencyView Methodology

Business regulatory efficiency has improved. There is no minimum capital requirement for establishing a business, and licensing requirements have been streamlined. Labor regulations are relatively flexible, and the non-salary cost of employing a worker is moderate. The UAE cut energy subsidies in 2015, but commercial airlines in the U.S. and Europe have charged that there are “obvious and massive” state subsidies to Emirates and Etihad airlines.

Open MarketsView Methodology

The UAE’s average tariff rate is 3.6 percent. Foreign ownership levels are generally capped at 49 percent. State-owned enterprises include Emirates Airlines and Emirates National Oil Company. In many cases, at least 51 percent of a business must be owned by a UAE national. The modern financial sector provides a full range of services. Capital markets are open and vibrant and are becoming more competitive.

Country's Score Over Time

Bar Graph of United Arab Emirates Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
2United Arab Emirates72.60.2
8Saudi Arabia62.10.0

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