2018 Index of Economic Freedom

United Arab Emirates

overall score77.6
world rank10
Rule of Law

Property Rights76.3

Government Integrity77.3

Judicial Effectiveness83.4

Government Size

Government Spending70.9

Tax Burden98.4

Fiscal Health99.0

Regulatory Efficiency

Business Freedom79.9

Labor Freedom81.1

Monetary Freedom80.2

Open Markets

Trade Freedom84.3

Investment Freedom40.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 9.9 million
  • GDP (PPP):
    • $668.9 billion
    • 3.9% growth
    • 4.3% 5-year compound annual growth
    • $67,871 per capita
  • Unemployment:
    • 3.7%
  • Inflation (CPI):
    • 1.8%
  • FDI Inflow:
    • $9.0 billion
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The United Arab Emirates’ economic freedom score is 77.6, making its economy the 10th freest in the 2018 Index. Its overall score has increased by 0.7 point, with higher scores for the government spending and government integrity indicators outpacing small declines in judicial effectiveness and business freedom. The UAE is ranked 1st among 14 countries in the Middle East and North Africa region, and its overall score is above the regional and world averages.

To realize its ambition to diversify the economy and promote the UAE as a global trade and tourism hub, the government must build on earlier efforts to upgrade the business climate. State-owned enterprises need at least partial privatization, and the regulatory regimes governing the financial, real-estate, cyber, and free-trade zone sectors should be improved to enhance their appeal to foreign investors and visitors. Making the legal framework even more effective and independent should be another priority.



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 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 2004. In 2011, the government responded to protests calling for greater political participation by expanding the number of people allowed to vote in elections. Since 2012, the UAE has clamped down on social media activism. The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Economic diversification has reduced the oil and gas sector’s portion of GDP to 30 percent.

Rule of LawView Methodology

Property Rights 76.3 Create a Graph using this measurement

Government Integrity 77.3 Create a Graph using this measurement

Judicial Effectiveness 83.4 Create a Graph using this measurement

The United Arab Emirates has made property registration easier by increasing the transparency of its land registry. Each emirate establishes its own land ownership procedures. 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. The UAE is considered one of the region’s less corrupt countries.

Government SizeView Methodology

The UAE has no income tax and no federal-level corporate tax. Different corporate tax rates exist for certain activities in some emirates. The overall tax burden equals 12.8 percent of total domestic income. Over the past three years, government spending has amounted to 31.2 percent of total output (GDP), and budget deficits have averaged 0.4 percent of GDP. Public debt is equivalent to 19.3 percent of GDP.

Regulatory EfficiencyView Methodology

Reforms adopted in previous years have created a relatively efficient and well-functioning regulatory system. Employment regulations are flexible, and the nonsalary cost of employing a worker is not high. New labor laws that went into effect in 2016 make it easier for laborers to switch jobs. The government is phasing out fuel and electricity subsidies but continues its massive subsidies to UAE-based airlines.

Open MarketsView Methodology

Trade is extremely important to the UAE’s economy; the combined value of exports and imports equals 205 percent of GDP. The average applied tariff rate is 2.8 percent. Nontariff barriers impede some trade. Government openness to foreign investment is below average. 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

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Regional Ranking

rank country overall change
1United Arab Emirates77.60.7
9Saudi Arabia59.6-4.8

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