Expat Life in Dubai
General History and Statistics of the UAE
The UAE started as a treaty between the two most influential rulers of the region, Sheikh Zayed bin Sultan Al Nahyan of Abu Dhabi and Sheikh Rashid bin Saeed Al Maktoum of Dubai. This took place in the year of 1968.
The two leaders then invited the rest of the states to join the treaty in the form of a federation. Seven of them accepted (including Qatar and Bahrain) agreed initially, then eventually rejected and formed their own independent countries.
On December 2nd, 1971, the United Arab Emirates was declared as a country with six Emirate federations (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, and Fujairah). Later on February 10th, 1972, the seventh and the last Emirate of Ras Al Khaimah (RAK) joined.
The following are the seven emirates with the percentage of emirate area to the UAE total area and the rate of population.
- Abu Dhabi with more than 86% of the area and less than 35% of population
- Dubai with only 5% of total area but more than 35% of population
- Sharjah with around 3.5% of the land and little more than 16% of population
- Ras Al Khaimah (RAK) around 2.5% of the area and 4% of the population
- Fujairah around 1.5% of the land and little less than 3% of population
- Umm al Quwain with around 1% of the land and less than 1% population.
- Ajman comprises around 0.5% of the land and less than 6% of the population.
Dubai is the most popular and touristic Emirate in the UAE, and the whole GCC phenomena started with Dubai’s ruler’s ambitious and brilliant vision.
Ajman is the most populated state due to its tiny size, and has a direct road linked to Dubai which makes it the cheapest place to live if you are working in Dubai.
Sharjah comes third (and just like Ajman) is a cheaper place to live if you are working in Dubai. As you get closer to Dubai, and at the locations that are bordered with Dubai, the prices become considerably higher.
Khalifa Tower 2013 – Picture Taken From Jumeirah Beach – Dubai
Abu Dhabi, as an emirate, is low in density because it is more than 85% of UAE’s area. However, the city of Abu Dhabi (the capital city of UAE), lately became very populated, and sometimes even more expensive than Dubai.
Abu Dhabi is the wealthiest Emirate and the capital of UAE, and they have very iconic projects and are becoming like a cultural center in the region.
Abu Dhabi in the last 15 years started to compete with Dubai, and in the 2009 economic crisis they rescued Dubai from bankruptcy.
However, they bought many iconic assets including Emirate Air and Burj Khalifa (the tallest building in the world, which was first named as Dubai Tower then in 2009 remained as Khalifa Tower after Abu Dhabi’s ruler Khalifa bin Zayed, Sheikh Zayed’s son).
All governing rules and the laws come out of Abu Dhabi and all the other Emirates (including Dubai) follow these rules/laws.
Another famous city in Abu Dhabi is Al Ain which is low in density, but big in influence. It is the birthplace and the preferred city of the ruling family of Abu Dhabi.
Keeping it intentionally low profile away from all the developments keeps it in its authentic residential environment.
The population % listed above is the combined population of Locals and legal residents. The local community is a little more than 11%, while the expat population constitutes almost 89% of the country’s population.
Indian expats are nearly 27% of the people, Pakistani 13%, Bangladesh 7%, and Philippine 5%. The remaining 48% of the people are from other countries all over the world including Egypt, Iran, Sri Lanka, Nepal, China.
Although Arabic is the official language, knowing English is more than enough to be able to navigate easily in the UAE. Islam is the official religion, but Christianity, Hinduism, and other faiths are openly practiced, and their religious holidays are celebrated (not officially, but practically).
For example, you will see the Islamic Eid Al Fiter, and Eid al Adha is celebrated as well as Christmas and New Year. The Islamic New Year (al Hujri lunar calendar) is not celebrated in the UAE.
However, many businesses are closed and celebrate the Chinese New Year, and the Nowruz (Persian New Year) and many Hindu holidays as well.
Why Choose Dubai?
If you are a business owner and want to market in the MEA region (the Middle East and Africa), then Dubai is one of the best places to have an office (20 years back was almost the only place after Lebanon and Iraq were destroyed by wars).
It’s tax-free
It is still tax-free, which is an excellent incentive for businesses (there are many other indirect taxes, a subject for another blog). However, there are many other incentives and benefits to move your business to Dubai from other neighboring countries.
You can Own Properties
UAE (in general) is politically stable, has one of the best infrastructures in the region, and owners can open a business without the need to have a local sponsor or partner.
Companies can own properties (it is in reality a long-term lease, but long enough to be considered ownership). UAE is a small country with excellent infrastructure, roads, public transports, internet, power, sanitation, and water systems.
It has excellent banking system and legal systems
Also, it has an excellent banking system and legal systems like most other developed countries. It also helps to have the English language widely used and is practically the second official language.
You might not need a visa
Another point to consider is that it is extremely easy to get in and out of Dubai. Most Western countries don’t need a visa, and if necessary, many country’s citizens can obtain a tourist visa easily.
Traveling in and out is easy
Dubai is also a hub with three major international airport terminals. They have terminal 1 for most international airliners, terminal 2 for budget airliners (the home of the Dubai budget airliner “Fly Dubai”), and terminal 3 is the home of the “Emirate air”, Dubai’s official airliner.
These three airports make traveling in and out of Dubai very easy and inexpensive, and trips are available daily to almost all major destinations.
Dubai also has two big ports (port Rashid and Jebel Ali Port) these two ports can receive all size ships, with significant dry dock capability and it is the only dry dock facility in the region (next to Port Rashid).
There are other ports in UAE as well. One in Abu Dhabi, two in Sharjah, the Fujairah port, a hub for oil export in the region (because it bypasses the Al Hormuz Strait which is vastly controlled by Iran).
There are also other international airports in the UAE besides the three terminals in Dubai. They have a big international airport in Abu Dhabi (the capital) and the home for “Etihad Air”, the Abu Dhabi official airliner.
They have another international airport in Sharjah. The Sharjah airport is less popular but has inexpensive flights to India, Pakistan, and some other Southeast Asian countries.
It is also the home for “Al Arabiya Air”, the official Sharjah airliner. RAK and Fujairah have tiny airports that have some minimal international flights (in 2012, when I visited Fujairah airport, and there were only three airplanes parked in the airport taxiways).
Cost of Doing Business and Living in Dubai
Due to the increasing popularity of Dubai as a business and tourist destination, the cost of living and doing business in Dubai and Abu Dhabi started to skyrocket since the late 90s.
The cost of living in Dubai and the capital city of Abu Dhabi is the most expensive in the UAE and the neighboring countries. However, the employment pay grade is the lowest than any other GCC country.
For a similar title, in the same company, you would probably make 10 to 15% more working in Saudi, and maybe 5 to 10 % more working in Qatar. It will also cost you at least 20 % more living in Dubai the same standard of life if you were living in Saudi.
My two-bedroom three-bathroom apartment in Dubai cost me more than a 6-bedroom, 5-bathroom villa I rented in Riyadh – Saudi.
I started my first company in Dubai in June 2006 with $150,000.00 with three admin and one Forman.
We started with a labor-only contract and imported 5 laborers, which took a month to get them. I used to rent laborers from the market to perform our contracts.
As we grew, we started to import our laborers and buy equipment and evolve with market demand. Whenever there was a new contract, I would hire freelance laborers or technicians and even experts from the market.
A percentage of the contract I would subcontract out and gradually increase our staff and experts. This arrangement is what small and medium-size general contractors do to help control overhead and release people if work was unavailable.
This practice also helped smaller companies to ask their laborers to freelance whenever they have no project at hand.
In mid-2007, the labor department started to crack down on freelance laborers. The labor department regularly raided all the places that laborers congregate and resulted in companies being fined and laborers getting deported.
In addition, the project sites were raided. Laborers, technicians, and engineers were asked to show proof of residency and proof that their company is officially contracted to perform that specific job listed.
This practice continued even through the 2009 crisis, and that made a lot of contractors give up work and leave due to high overhead and not enough contracts.
Dubai is one of the most exciting cities I lived in and worked in. It was a fantastic experience that I will never regret. Life in Dubai can be 24 hours non-stop if you have the energy for it.
Work is very demanding, and the country wants to adopt the highest standards from every state and apply them in Dubai. However with time, the country became very paperwork oriented and overly complicated.
Of course, like anywhere else in the region, Dubai has its share of corruption, especially if your work is inside the country. The government always fights corruption, but it is a fact of life there, and after a while working it can be very tiring and costly.
As a business owner starting a small to medium business, you will find many challenges these days. There are many challenges besides the working permit.
Labor laws are stringent, and the authorities, to control the bad reputation of mistreatment that GCC countries have, try to put all types of regulations to ensure the laborers’ rights are protected.
However, in my eight years there, I had low and high paid employees and laborers. What I noticed is that the more laws the authorities put, the more it became hard for owners to import more people to perform, and at the same time be cost-effective and make profit, and at the same time, these rules make it harder for employees and reduce their standard of living.
In my opinion, the regulations were more a public relations effort and less carefully studied effort to solve problems.
As a business owner in Dubai, you need to have enough laborers, staff, sales, engineers, or any other staff under your visa. You cannot hire laborers or technicians per day or job.
Regulations also made it hard to efficiently hire or fire staff as the market demands today. Hence you must have a steady payroll that you will be committed to in addition to having enormous liabilities to every person on your payroll. To fire a person, you should give at least a month’s notice if not more.
Then there is gratitude and end of service pay that you have to pay to let someone go. For many businesses, this is a huge cash flow issue, especially if you have hundreds of employees. Hence, sometimes you keep these employees on payroll and eat up the company’s profits or reserve cash till the next job.
To overcome this, many companies fire people prematurely before the 2-year mark, so they escape paying end of service payments. Some companies, especially the more significant employers, would leave their staff and employees with no salary for two and sometimes up to 6 months.
Some don’t even pay labor camp rents, causing laborers to be evicted from their accommodation. Of course, employees have the right to complain to the labor department, which is when the company starts negotiating with employees very unfavorable terms or terminating their contract, using their employment visa as leverage.
Many small and medium businesses don’t want to go through unfair methods. To survive, these employers either borrow money from banks or spend the reserve cash.
And eventually either forced to sign terrible contracts, with terrible clients and in many cases end up leaving.
Final Thoughts
For many, Dubai looks like the place that you can live forever (the reasons I will touch upon as I continue my blogs). As I worked, lived, and survived the 2009 catastrophe, we grew into a multi-million dollar company with more than 150 personnel and staff, and bought other smaller companies which helped us grow faster.
I had a beautiful life, a single guy working and living in Dubai, a dream life for many. But I started to realize I was living in “The Hotel California” type of situation. Too much noise and glitter, but no real life.
This with the immense pressure, no real people, and no real future made me decide I had to leave. Leaving Dubai was not an easy decision or task, but I am glad I did. However, I always miss Dubai and I will be going back soon as a tourist.
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