WT/TPR/S/162 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) THE INSTITUTIONAL FRAMEWORK  
1. The six emirates - Abu Dhabi, Dubai, Sharjah, Fujairah, Umm al-Qaiwain and Ajman - came 
together to establish a federal state (with a provisional federal constitution)1, the United Arab 
Emirates, on 2 December 1971.2  Until then they had been known as the Trucial States, with separate 
governments and treaty relationships with Britain.  Th e seventh emirate, Ra's al Khaimah, formally 
acceded to the new federation on 10 Fe bruary 1972.  According to Ar ticles 120 and 121 of the Federal 
Constitution, the federal authority is responsible for, inter alia , foreign affairs, security and defence, 
nationality and immigration issues, education, publ ic health, currency, postal, telephone, and other 
communications services, air traffic control and li censing of aircraft, and labour relations.  Under 
Articles 116 and 122, each emirate has jurisdiction in all matters not assigned to the exclusive 
jurisdiction of the federal government.   
2. The federal system includes five bodies with no full separation of powers:  the Federal 
Supreme Council, the president, the Council of Mini sters, the Federal National Council, and the 
Federal Judiciary.  The Federal Supreme Council is  the top policy-making body of the federation and 
comprises the rulers of the seven emirates.  It is vested with legislative and executive powers, 
including electing the President and the Vice-Preside nt of the Federation, ratifying federal laws and 
decrees, and approving the nomination of the Prime Mi nister (selected by the President in consultation 
with the Members of the Supreme Council) and accepting his resignation.3  The Council may also 
relieve the Prime Minister of his post upon recommendation by the President. 
3. The President and Vice-President are elected by the Supreme Council for a term of five years, 
renewable.  In absence of the President, th e Vice-President assumes his responsibilities.  The 
President is accorded a wide range of legislativ e and executive powers. As chief executive of the 
State, the president also enjoys powers that include  the right to convene and preside over meetings of 
the Supreme Council. The President is also entr usted with signing laws, decrees and decisions 
sanctioned by the Supreme Council, supervising im plementation through the Council of Ministers; 
and ratification of treaties and international agre ements after approval by both the Supreme Council 
and the Council of Ministers. Headed by the Prime Minister, the Council of Ministers is an executive authority of the federation.  The Prime Minister, who is currently the Vice-President, and ruler of 
Dubai, selects his cabinet Ministers among represen tatives from the seven emirates.  In February 
2006, the Prime Minister announced his new Cabinet, with two women Ministers (Minister of 
Economy and Minister of Social Affairs).
4   
4. The Federal National Council (FNC) comprises 40 members representing the seven emirates.5  
The number of seats assigned to each emirate is based on its population;  Abu Dhabi and Dubai hold 
                                                      
1 On 2 December 1996, the Supreme Council ap proved a draft amendment to the provisional 
constitution making it the permanent Constitution of the UAE.  The amendment also named Abu Dhabi City as 
the capital of the State. 
2 Ministry of Information and Culture (2005). 
3 Sheikh Zayed bin Sultan Al Nahyan ruler of Abu Dh abi was elected as the firs t President of the UAE, 
and ruled until his death on 2 Novemb er 2004.  Sheikh  Zayed was succeeded by his son and Crown Prince, 
Sheikh Khalifa bin Zayed Al Nahyan, who was elected by Members of the Supreme Council as the new 
President on 3 November 2004.  The post of Vice-President is held by the Ruler of Dubai, Sheikh Mohamed bin 
Rashid Al Maktoum, who succeeded his br other after his death in January 2006. 
4 The first woman minister in the UAE was appointed in November 2004 and was responsible for the 
Ministry of Economy and Planning.  In the new Cabinet, she is in charge of the Ministry of Economy. 
5 Article 68 of the Constitution.  Article 71 prohibits  any member of the FNC from holding any other 
post in the federal government, including ministerial positions. United Arab Emirates  WT/TPR/S/162 
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the largest number.6  The selection of representatives, appointed for two calendar years, is at the 
discretion of the ruler of each emirate.  Under the Constitution, the FNC has a consultative role, including serving the people and the nation, consolidating the principles of shura (consultation) in the 
country, examining and amending proposed federal legislation, questioning ministers and holding 
them accountable for their respective ministri es, and discussing the annual budget.  The FNC is 
presided over by one of its members.   
5. The judicial system is composed of a federal and a local judiciary.  The federal judiciary 
comprises the Federal Supreme Court, the federal courts of appeal (civil and sharia ), and the federal 
courts of first instance (civil and sharia ).
7  The Federal Supreme Cour t consists of five judges 
including a President of the court, appointed by  presidential decree and endorsed by the Supreme 
Council.8  The judges decide on the constitutionality of federal laws and arbitrate on inter-emirate 
disputes and disputes between the Federal Government and the emirates.  The federal courts of appeal 
comprise a body of judges including court presidents.9  Panels of three judges hear criminal cases, 
civil, commercial, and other matters.10  They also hear appeals against judgments by the federal courts 
of first instance and the local judicial authorities,  together with other disputes in accordance with 
applicable laws.  Judgments of the fede ral courts of appeal are final.   
6. The federal courts of first instance have a body of judges and court presidents who hear 
criminal cases, as well as civil, commercial, and ot her matters.  Judgments are delivered by a single 
judge unless the law stipulates otherwise.  Article 116 of the Constitution states that all matters not specifically stipulated as falling within federal juri sdiction may be considered within the relevant 
emirates.  The emirates of Dubai and Ra's al-Khaimah established local judiciary, not attached to the 
Ministry of Justice, which oversees the federal judicial system.     
7. At emirate level, governments differ in size and complexity, depending on, inter alia ,  
population, and areas of development.  The emirates of Abu Dhabi, Dubai, Ra's al Khaimah, and Sharjah have similar local government structur es, while in other emirates, the ruler has a diwan  – his 
office - through which the concerns of citi zens may be directed to the government.
11  U n d e r  t h e  
Constitution each emirate is permitted to relinquish national powers to the Federal Government.  
Important examples of this are the decision to unify the armed forces in 197612, and the 
relinquishment by each emirate of the right to join the Organization of Petroleum Exporting Countries (OPEC) and the Organization of Arab Petroleum Exporting Countries (OAPEC). 
                                                     
 
6 Eight seats each for Abu Dhabi a nd Dubai, six each for Sharjah and Ra's al-Khaimah, and four each 
for Fujairah, Umm al-Qaiwain, and Ajman.   
7 Article (9) of Federal Judicial  Authority Law No.3 of 1983. 
8 Articles 96 and 97 of the Constitution.  They are appointed for an indefinite duration. 
9 There are four civil federal courts of appeals and two sharia federal courts of appeals (one based in 
the capital and the other in Al Ain).  
10 There are no courts specialized in economic/commercial matters in the UAE. 
11 For example, the largest emirat e, Abu Dhabi, has its own central  governing council, the Executive 
Council, presided over by the Crown Prince Sheikh Mohamed bin Zayed Al Nahyan.  Its Eastern and Western 
regions are headed by an official with the title of Ruler' s Representative, and its main cities are administered by 
municipalities, each of which has a nominated municipal counc il.  Abu Dhabi also has a legislative branch at the 
local government level, which has a role similar to that of the Federal National Council.  Its National 
Consultative Council comprises 60 Members elected from among its main tribes and families and is chaired by a 
Speaker.  The Council provides a forum for its members to voice concerns and suggest introduction or revision of federal legislation.  The Council is also vested with powers to question officials and examine and endorse 
local legislation. There is a similar pattern of munici palities and departments in each of the other emirates  
(Ministry of Information and Culture, 2005). 
12 FNC decision 1 of 1976 amending the Constitution. WT/TPR/S/162 Trade Policy Review 
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8. Overall, modern and traditional government stru ctures co-exist and evolve together.  The 
concept of holding the open "majlis" or council, a traditional means for tr ibesmen to voice their 
opinions, concerns and complaints to their rulers, h as remained relevant.  In the majlises, for example, 
discussions between Sheikhs and other citizens ma y address a variety of issues including economic 
and foreign policy, matters concerning unemployment, or specific individual requests.  
(2) TRADE POLICY FORMULATION AND IMPLEMENTATION  
9. Formulation and implementation of the UAE trade policy is the direct responsibility of the 
Ministry of Economy and Planning, in coordination w ith other federal ministries, trade-related bodies 
and local departments:  These include the Ministry  of Finance and Industry, Emirates Authority for 
Standardization and Metrology (ESMA), Ministry of  Agriculture and Fisheries, the municipalities of 
Abu Dhabi and Dubai, Ministry of Labour and Social Affairs, Ministry of Justice and Islamic Affairs, 
Federal Customs Authority, Ministry of Public Health, and Ministry of Petroleum and Natural 
Resources.  The private sector provides inputs to tr ade policy formulation by communicating its views 
through the chambers of commerce and industry.   
10. A National Committee (NC) was created by a Mini sterial Decree 4/395 of 2002 to deal with 
WTO related matters.13  It acts under the supervision of the Ministry of Economy and Planning, as an 
advisory body to the UAE negotiating team.  The NC is supported by five sub-committees covering: 
market access for non-agricultural products, inte llectual property rights, protection of domestic 
production, trade in services, and the Singapore issues.   
11. Trade policies are formulated and implemented by means of legal instruments. Bills are 
prepared by the relevant ministries, and presente d successively to the Council of Ministers, the 
Federal National Council,  and to the Pr esident of the Federation, for approval.14  Once ratified by the 
Supreme Council, the bills are signed by th e President and published as laws in the Official Gazette .15   
12. According to Federal Law No 1 of 1972, each Ministry negotiates international agreements 
within its jurisdiction. However, the sole Ministry authorized to sign such agreements is the Ministry 
of Foreign Affairs, which can delegate its authority to other ministries.16  The Federal Supreme 
Council is responsible for ratifying and endorsi ng international agre ements and covenants.17  T h e  
Council of Ministers is also obliged under the C onstitution to notify to the Federal National Council 
of all international agreements and covenants.  Treaties/interna tional agreements, once ratified, 
prevail over domestic legal instruments.  In descen ding order, the Constitution is followed by laws, 
decree-laws, ordinary decrees, and regulations.  The main trade-related laws and regulations of the 
UAE are presented in Table II.1. 
                                                      
13 The NC comprises 33 members and is chaired by the Vice-Minister of Economy and Planning.  
Membership of the NC includes representatives from the Ministry of Finance and Industry, Chamber of 
Commerce and Industry, Emirates Aut hority for Standardization and Metrology, Ministry of Agriculture and 
Fisheries, municipality of Abu Dhabi, Ministry of Labou r and Social Affairs, Ministry of Justice and Islamic 
Affairs, Federal Customs Authority, Ministry of Public  Health, Ministry of Petroleum and Natural Resources, 
Federal Environment Authority, the Central Bank, and the University of the Emirates. 
14 Chapter 1, part 5 of the UAE C onstitution (Articles 100-115), regulates  the legislative procedures at 
the federal level. 
15 They come into effect one month from the date of publication or the date specified in each law.   
16 Articles 46/6, 54/4, 60/7 and 91 of the Constitution treat the same issue. 
17 Article 47 of the Constitution.  Under Article 49 of the Constitution, substantive decisions by the 
Supreme Council must be taken by a majority of five out of the seven members, and include the votes of Abu Dhabi and Dubai.  Decisions relating to procedur al matters are taken by simple majority.   United Arab Emirates  WT/TPR/S/162 
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Table II.1  
Main federal trade-related laws in the UAE 
Laws Subject 
GCC Common External Customs Tariff Tariff 
GCC Common Customs Law of 1 January 2003 
(Decision of the Supreme Council of the GCC regulating the customs 
procedures for the establishment of the customs union; 21-22 December 2002)   Customs regulations; impor t and export procedures; 
rules of origin 
Federal Law No. 18 of 1981 concerning the organization of commercial agencies, as amended by Federal Act No. 14 of 1988 Regulation of commercial agencies (exclusive 
distribution rights) 
Federal Company Law No. 8 of 1984 concerning commercial companies and 
the amending laws thereof Commercial companies law  
Federal Law No. 5 of 1975 Commercial register 
Federal Law No. 5 of 1985 Civil transactions (Civil Code) 
Federal Law No. 18 of 1993  Commercial transactions  
UAE Federal Order No. 16 of 1975 (the public tenders law) Government procurement  
Ministerial Decision No. 20 of 2000 on Administration of Contracts System Government procurement  
Federal Law No. 7 of 1976 establishing the St ate Audit Institution Government procurement 
Federal Law No. 1 of 1979 organizing i ndustrial affairs   Industrial projects  
Federal Law No. 7 of 2002 concerning c opyrights and neighbouring rights Copyright 
Federal Law No 37 of 1992 on trademarks as amended by Law No. 8 of 2002  Trade marks  
Federal Law No. 17 of 2002 on the in dustrial regulation and protection of 
patents, industrial drawings and designs.   Industrial patents 
Federal Law No. 4 of 1983 on the Pharmaceutical Profession and 
Pharmaceutical companies Pharmaceutical profession and pharmaceutical 
companies 
Federal Insurance Law No. 9 of 1985  Insurance services  
Ministerial decision (Minister of Economy and Commerce) No. 333 of 2004 regulating the activities of foreign insurance companies Insurance services 
Federal Law by Decree No. 3 of 2003 regarding the organization of the 
telecommunication sector, the amended Federal Law of 1991, and the Executive Order of the Supreme Committee No. 3 of 2004 Telecommunications 
Federal Law No. 4 of 1985 and Federal Law No. 8 of 2001 Postal services   
Federal Law No. 10 of 1980 concerning the Central Bank, the monetary system 
and organization of banking Banking and financial intermediation services  
Federal Law No. 4 of 2000 (Stocks and Co mmodities Authority) Securities regulation  
Federal Law No. 23 of 1991 concerning th e practice of the advocate profession 
and amending laws, respectively, No. 20 of 1987 1997 and No. 5 of 2002 Legal services 
Source: Information provided by the UAE authorities. 
13. As a member of the Gulf Co-operation Counc il (GCC), the UAE has to harmonize its trade-
related legislation with that of the other members (section (4)(ii)(a)).  According to the authorities, 
this has been achieved to a large extent.  As of  10 October 2005, 15 GCC resolutions had been 
adopted, covering, inter alia , the extension of national treatment to all GCC nationals, exemption of 
production inputs from tariffs, and introduction of an industrial organization law/regulation in GCC 
countries.  The UAE has also ta ken steps to align its trade-related legislation on the WTO 
Agreements, as well as establishing institutions to mon itor this legislation.  However, the UAE still 
needs improved and targeted WTO technical assi stance in customs valuation, competition policy, 
TBT, and SPS measures.  In general, investment in the UAE is regulated by Commercial Companies Law No. 8 of 1984, and by Commercial Agency Law No. 18 of 1981 and amending Law No. 14 of 
1988 (sections (4)(i) and (5) below).     
(3) P
OLICY OBJECTIVES  
14. The UAE's main goal is to develop sound econom ic (including trade) policies to increase 
growth, diversify the economy away from oil, and create more employment opportunities for all its 
citizens.  The policies are also aimed at attracting local and foreign investment to develop further the WT/TPR/S/162 Trade Policy Review 
Page 14 
 
 
economy.  The government is to continue to promote a progressive economic agenda, built around 
economic liberalization and diversification, and promotion of the role of the private sector.  
15. The government recognizes the importance of trade and investment to its overall goals.  To 
this end, it seeks improved market  access for its products through multila teral trade liberalization, and 
bilateral and regional trade agreements; the UAE  already has quite a liberal trade regime.  
Furthermore, discussions are under way in the UAE to  re-examine the federation's commercial law, 
which limits foreigners to minority stakes in local firms, and to extend foreigners the right to own 
property. 
16. The Federal Government provides the broa d framework for policymaking in the UAE; 
however, most key decisions are made at the emir ate level.  Dubai is involved with most new 
initiatives, and is expected to accelerate its diversif ication process to compensate for its small and 
declining oil industry.  Diversification will include  developing further the emirate's tourism, media, 
shipping, financial, and commercial services, as well as expanding its industrial base.  Dubai has 
announced the launch of several new free zones.  Abu Dhabi, meanwhile, intends to continue to invest 
heavily in the development of its large, upstr eam hydrocarbons resources and downstream industrial 
projects, notably in the petrochemicals subsector.  It will also promote plans to sell off a number of 
non-hydrocarbon industries, and contin ue efforts to privatize the entire power and water subsectors by 
2006.18   
(4) TRADE AGREEMENTS  
(i) WTO 
17. The UAE became an original Member of the WTO on 10 April 1996; it had been a 
contracting party to the GATT since 8 March 1994.  The UAE is neither a signatory nor an observer to any of the WTO's plurilateral agreements.  It has not been involved in any dispute under the Dispute Settlement Mechanism, either directly or as a third party.  The UAE has fulfilled most of its 
notification requirements (Table II.2).  Missing notifi cations are essentially in the areas of agriculture, 
rules of origin, import licensing, and state trading. 
18. The UAE grants at least most-favoured-nation (M FN) treatment to all its trading partners, 
except Israel.  It benefited from transition periods  (available to developing countries) to implement 
some of its commitments including un der the Agreement on Customs Valuation .  The UAE notified 
the Secretariat on 5 July 2004 that it has enacte d the necessary legislation and is now fully 
implementing the WTO Customs Valuation Agreement.   
19. The UAE is a strong believer and advocate of the multilateral trading system.  It is playing an 
active role in the current round of  multilateral trade negotiations.  Its main interests in the Doha 
Development Agenda (DDA) include greater non- agricultural market access (NAMA), and further 
liberalization of trade in services.  In NAMA, th e UAE suggested the inclusion of a new sector (raw 
materials, including non-ferrous metals, with primar y aluminium as its strategic priority)  into the 
proposed list to be covered by the sectoral tariff elimination approach.
19  The UAE also submitted its 
initial offer in services, which is basically in line  with the policy objectives set by the Government 
                                                      
18 The Economist Intelligence Unit, September 2005. 
19 WTO document TN/MA/W/37, 37Add.1  and Add.2 of respectively 20 May 2003, 28 May 2004, and 
21 April 2005 United Arab Emirates  WT/TPR/S/162 
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and its reform process currently under way.20  The UAE supports the strengthening of technical 
assistance programmes for developing a nd least developed countries.   
Table II.2 
UAE's selected notifications to the WTO, as of November 2005  
WTO Agreement Description of 
requirement Periodicity Most recent 
notification Comment 
Agreement on Agriculture  
Articles 10 and 18.2 Export subsidies Annual G/AG/N/ARE/4 
22 May 2002 No export subsidies in 2000-01 
Article16.2   Net-food import  G/AG/N/ARE/1  
Article 18.2 Domestic support  G/AG/N/ARE/5 
22 May 2002 List of DS measures in 2000-01 
Agreement on Implementation of GATT Article VI (Anti-dumping)  
Article 18.5 Laws and 
regulations Once, then changes G/ADP/N/1/ARE/1 
26 March 1997 No laws/regulations relevant to 
the agreement 
Article 16.4 AD Semi-Annual G/ADP/N/53/Add.1/
Rev.1 
19 April 2000 No AD actions taken since 31 
December 1999 
Article 16.5 Competent 
authority  G/ADP/N/14/Add.4 
G/SCM/N/18/Add.4
25 April 1997 Anti-dumping, subsidies and 
countervailing duties 
Agreement on Import Licensing Procedures  
Article 7.3 Import licensing Once, then changes G/LIC/N/3/ARE/1 
25 April 2000 No import licence requirements 
Articles 1.4(a) and 8.2(b) Import licensing 
Laws and 
regulations Once, then changes G/LIC/N/1/ARE/1 
18 April 1997 No legislation on import 
licensing procedures 
Article 5     
Agreement on Preshipment Inspection  
Article 5 Laws and 
regulations Once, then changes G/PSI/N/1/Add.5 
3 February 1997 No laws and regulations 
relevant to the Agreement 
Agreement on Rules of Origin  
Agreement on Sanitary and Phytosanitary Measures  
Article 7, Annex B Sanitary and 
phytosanitary 
Measures Ad hoc G/SPS/N/ARE/1 
G/SPS/N/ARE/12 Emergency measures 
Agreement on Safeguards     
Article 12.6 Safeguards Once, th en changes G/SG/N/1/ARE/1 
27 March 1997 No legislation 
Agreement on Subsidies a nd Countervailing Measures  
Article 25.1 Subsidies Annual G/SCM/N/38/ARE 
G/SCM/N/48/ARE 
G/SCM/N/60/ARE 18 April 2000 No subsidies  
Article 25.11 Countervailing 
measures Semi-Annual G/SCM/N/52/Add.1
/Rev.1 2 May 2000 No countervailing action during 
the period 1 January-30 June 1999 
Article 32.6 Countervailing 
measures Once, then changes G/SCM/N/1/ARE/1 
26 March 1997 No legislation  
Agreement on Technical Barriers to Trade  
Articles 10.1 and 10.3 Enquiry point Once, then changes G/TBT/ENQ/26, 
3 March 2004  
GATT 1994     
Article XVII:4(a) and 
Understanding on the Interpretation of Article XVII:1 State trading 
enterprises Annual G/STR/N/1/ARE 
14 October 1996 No STEs 
Article VII - 20.1   Customs valuation  WT/Let/72 
 Extension of CV transition 
period for three years 
Annex III of Article VII Customs valuation Once G/VAL/N/4/ARE/1 
15 September 2004 Full implementation of the 
Agreement 
    Table II.2 (cont'd) 
  
 
 
                                                      
20 WTO document TN/S/O/ARE, 4 July 2005. WT/TPR/S/162 Trade Policy Review 
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WTO Agreement Description of 
requirement Periodicity Most recent 
notification Comment 
GATS      
General Agreement on Trade in 
Services (GATS) Art. III:3 Trade in services  S/C/N/29 
25 October 1996 No changes to existing laws 
and regulations 
General Agreement on Trade in 
Services (GATS) Art. III:4 or 
IV:2 Enquiry point Once, then changes S/ENQ/46 
17 September 1997 The Ministry of Economy and 
Planning 
Decision on Notification Procedures for Quantitative Restrictions  
  Notification 
procedures quantitatve restrictions Every two years, 
from 31 January 1996 G/MA/NTM/QR/1/
Add.5, 19 November 1998;  G/MA/NTM/QR/1/
Add.7 
16 June 2000 QRs maintained 
Agreement on Trade-Related Aspect s of Intellectual Property Rights  
Article 69 Contact points Once, then changes IP/N/3/Rev.4/Add.3 
12 September 2000 Ministry of Economy and 
Planning 
Article 63.2 Copyright and 
neighbouring 
rights Once, then changes IP/N/1/ARE/C/1 
3 March 2004 Federal Law No. 7 of 2002 
Source: WTO documents. 
(ii) Regional agreements 
(a) Gulf Cooperation Council (GCC) 
20. The GCC was created on 25 May 1981 by Bahrai n, Kuwait, Oman, Qatar, Saudi Arabia, and 
the United Arab Emirates.21  Behind its formation was a general perception by these countries of their 
vulnerability arising from their oil wealth, their small and dispersed popula tions (28 million), their 
vast surface area (2.6 million square kilometres), and their limited military capabilities in a generally 
unstable region.  The main objectives of the GCC Agreement are regional c ooperation and integration 
in all economic, social, and cultural affairs, includi ng trade, industry, investment, finance, transport, 
communications, and energy.  Its specific objectives are to achieve a common market, with equal treatment of GCC citizens in each member country  in respect of freedom of movement, work, 
residence, ownership of real estate, movement  of capital, as well as financial and monetary 
coordination including adoption of a common currency .  At a December 2005 summit in Abu Dhabi, 
GCC leaders endorsed five macroeconomic and budgeta ry convergence criteria for monetary union by 
2010, including a cap on budget deficit relative to gr oss domestic product, the public debt to GDP 
ratio, inflation rates, and on nationa l interest rates, and adequacy of foreign exchange reserves.  
Technical details, including percentages and ratios,  will be decided by Ministers of Finance and 
central bank Governors in 2006.   
21. In 1983, the GCC member states set up a fre e-trade area, whereby originating goods were 
exempt of customs tariffs.  That agreement wa s notified to the GATT, under the enabling clause, on 
11 October 1984.  Since January 20 03, GCC states have been in the process of setting up a customs 
union:  a common across-the-board tariff of 5% on most products has been in place since then; and 
the common GCC Common Customs law of 2003 provides for common origin rules for all the 
members (Chapter III(2)(iii)).    However, practical  details of certain trade issues have yet to be 
addressed, including fully harmonizing the list of pr oducts subject to rates higher than 5%, and 
standards and technical regulations  
22. In 1989, the GCC and EC concluded a Coope ration Agreement under which their Foreign 
Ministers hold a Joint Council/Ministerial meeting on ce a year.  The objective of this agreement is to 
                                                     
 
21 See GCC online information.  Availabl e at: http://www.gcc-sg.org/index_e.html. United Arab Emirates  WT/TPR/S/162 
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facilitate trade relations, and to contribute to stre ngthening stability in a strategic part of the world.22 
The GCC is negotiating bilateral trade agreements wi th the EC, China, and Turkey, and is considering 
such negotiations with EFTA, MERCOSUR, India, and Pakistan.   
(b) Greater Arab Free-Trade Area (GAFTA) 
23. Under the treaty of the Greater Arab Free-Trade Area (GAFTA)23, signed on 
19 February 1997, and in force since 1 January 1998, all trade barriers among its members were 
eliminated without exception on 1 January 2005.  Nonetheless, non-tariff barriers, in particular, 
standards, lengthy bureaucratic and administrativ e procedures at the borders,  transit fees, and 
certificates of origin are reported.  The treaty also provides for rules of origin (Chapter III (2)(iii)).  
The principal entity responsible for implementing th e programme is the Economic and Social Council 
of the League of Arab States (LAS).  The GA FTA has not yet been notified to the WTO.   
24. The GAFTA has contributed modestly to increasi ng inter-Arab trade 8-9% of total Arab trade 
with the world, from 4-5% in the 1990s.  The UAE's exports to the Arab world (f.o.b.), including petroleum products
24, more than tripled in five years, from US$1.9 billion in 1999 to around 
US$6.5 billion in 2004, second only to Saudi Arab ia (US$14.7 billion).  Moreover, UAE imports 
(c.i.f.) from the Arab world grew  from US$1.6 bi llion in 1999 to around US$3.8 billion in 2004. 
(iii) Bilateral agreements 
25. The UAE has signed bilateral trade agreemen ts with Syria (signed on 12 November 2000), 
Jordan (17 March 2001), Lebanon (2 March 2002), Morocco (17 March 2002), and Iraq 
(2 April 2002). Trade agreements are under cons ideration with the United States and Australia.  
According to the authorities, with the exception of  the ongoing bilateral negotiations with the United 
States, all future bilateral agreements will be nego tiated at the GCC level, not by individual members. 
(iv) Other preferential arrangements 
26. The UAE does not participate in the Global System of Trade Preferences (GSTP) among 
developing countries, and it neither provides nor receives trade preferences under the Generalized System of Preferences (GSP).  The UAE is a me mber of the Organization of Petroleum Exporting 
Countries (OPEC). 
(5) I
NVESTMENT FRAMEWORK  
27. The UAE's investment policy is implemented through licences, the basic requirement for all 
business.  Licensing procedures vary from emirate to emirate;  they apply differently to local and 
foreign companies, but are publicly available and tran sparent.  For example, in Dubai, there are three 
categories of licences:  industrial licences for indus trial activities;  professional licences covering all 
services and artisans;  and commercial licences cove ring all kinds of trading activities. While the 
UAE's economic environment is generally liberal  and business-friendly, its investment policy 
continues to discriminate between local and foreign investors, ex cept in the free zones. 25   Licences 
                                                      
22 European Commission (2003), The EU and the GCC , Brussels, 11 October 1983. 
23 The GAFTA members are: the GCC members plus Al geria, Egypt, Iraq, Jordan, Lebanon, Libyan 
Arab Jamahiriya, Morocco, Palestinian Authority, Somalia, Sudan, Syrian Arab Republic, Tunisia, and Yemen. 
24 Petroleum products are not covered by the GAFTA Treaty.  
25 Foreign companies or non-national individuals may own 100% of projects located in the free zones 
(Chapter III(3)). WT/TPR/S/162 Trade Policy Review 
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can be obtained only by domestic companies that ar e majority-owned by UAE nationals, or by 100% 
foreign-owned branches, which must appoint a local services agent or "sponsor" (Chapter III(2)(i)).26 
28. In each emirate a ruling family owns all the land and natural resources.  There is no 
legislation governing land ownership at the federal level;  the matter is left to the discretion of each 
emirate.  For example, acquisition of land for commercial or private purposes in Dubai is restricted to 
UAE citizens and, to a certain extent, GCC citizen s.  However, the emirate of Dubai has recently 
granted foreigners, the right to purchase private properties in exempted areas in three partly 
government-owned housing projects27; under two of the projects, the ownership allowed is freehold, 
the other allows leasehold for up to 99 years.  There is no law in the emirate of Dubai that regulates 
land ownership.  According to the authorities, a law is currently being drafted to clarify all 
ambiguities surrounding the legal status of land ow nership and long-term leased real estate in the 
exempted areas. 
29. In Abu Dhabi, a law on land ownership was adopted in 2005.28  The law stipulates that real 
estate granted by the Government to a citizen before  or after issuance of the law, is his or her own 
property;  the citizen has the right to register such  ownership and is entitled, within the limits of the 
law, to use, exploit, and dispose of such propert y.  The law also allows GCC citizens to own real 
estate located in investment areas,  and specifies the terms of the surface lease contracts on real estate 
outside investment areas.  Foreigners have also b een given the right, under the new law, to lease real 
estate in investment areas located in Abu Dhabi for a limited duration.  Other emirates have their own regulations and decisions governing land/property ow nership.  For example, the emirate of Sharjah 
adopted a resolution (in 2005), which stipulates that th e owner of a property is not permitted to sell it 
to non-GCC citizens;  such sales may only be possibl e after approval by the ruler of the emirate and 
under specific conditions. 
30. Federal Company Law No. 8 of 1984 (the Co mmercial Companies Law - CCL) regulates the 
establishment of companies, both local and foreign, outside the free zones.  All companies must have one or more national partners who acco unt for at least 51% of their capital.
29  The partners may agree 
to share the profits in proportions that differ from their capital share.  The Law also stipulates that 
management of the company may be undertaken by th e foreign partner.  According to the authorities, 
since 2005, the restriction no longer applies to GCC nationals, who can therefore own 100% of a 
company's capital.  The CCL is currently un der review by the Federal Supreme Council.    
31. Under the CCL, foreign companies may also ex ercise their main activity in the UAE by 
opening a branch or a representative office.30  About 1,600 branches are registered at the Federal 
Ministry of Economy and Planning (MEP), and opera te in construction, petroleum, insurance, 
accounting, tourism, courier, and air transport ser vices.  A foreign branch or office can be 100% 
owned by the foreign company.  The foreign bran ch may exercise only the activities for which it is 
licensed by each emirate;  the company must apply to the MEP for this licence.  If approved by the 
MEP, the application goes to the economic department  of each emirate in which the business is to be 
                                                      
26 Trade Agencies Law, Federal Act No. 18 of 1981, as amended by Law No. 14 of 1988. 
27 Emaar, Nakheel, and Dubai Real Estate. 
28 Law No. 19 of 2005.  
29 Under the CCL, companies are defined as any "eco nomic project", excluding companies operating in 
the hydrocarbon industry, and in electri city, gas, and water desalination.   
30 The representative office may promote business for the products and services provided by the parent 
company, and facilitate contacts between the company an d its UAE clients.  However, it is not licensed to 
conduct business operations or marketing directly in any manner. United Arab Emirates  WT/TPR/S/162 
 Page 19 
 
 
undertaken.31  Once licensed by the economic department  of the emirate, the company licence is 
registered by the MEP. MEP fees for a first appr oval are Dh 10,000.  A bank warranty of Dh 50,000 is 
also required for registration, and registration mu st be renewed annually, subject to payment of 
Dh 10,000.  Each branch can have several s ub-branches:  the same licensing and registration 
procedures must be followed for each sub-branch.  
32. A condition for opening a representative office or br anch of a foreign company in the UAE is 
to appoint a local service agent or "sponsor", wi th no capital share and management power (see 
Chapters III(2)(i) and IV).  The agent's services c onsist mainly in maintaining contacts with the 
governmental authorities, and obtaining the relevant licences, approvals, and authorizations.  Agents 
are not responsible for any of the financial oblig ations or activities of the company's branch or 
representative office within the UAE or abroad.  The agent's remuneration depends on the contract.  
Foreigners may form sole proprietorships  to practice certain activities in Dubai32;  these include 
medical services, engineering consultancies, legal c onsultants, computer cons ultants, and non-trading 
activities.  A foreign sole proprietor is also required to appoint a local services agent.  
33. The UAE's hydrocarbon industry is specifically excluded from the provisions of the CCL.  It 
is owned and controlled by the respective emirates, and foreign participation must take the form of 
joint-ventures (Chapter IV(3)(ii)).33  Similarly, electricity, gas, and water utilities are supplied by state 
monopolies, although the Emirate of Abu Dhabi has r ecently announced the partial privatization of 
several electricity and water plants (Chapter IV(3 )(iii)).  Projects involving foreign participation in 
these subsectors are generally majority state controlled and owned by the State or by UAE nationals.      
34. Certain activities are reserved for UAE nationals and for companies totally owned by UAE 
nationals:  real estate services; rental/leasing services relating to cars;  services incidental to agriculture, hunting, and forestry, including veterinary medicine stores;  services incidental to fishing;  
placement services;  investigation and security ser vices; and passenger and freight road transport. 
35. There are no restrictions on investment abroad  by UAE nationals.    The UAE has signed 
various bilateral trade and investment framework agreements (Table II.3).  On 15 March 2004, it 
signed a bilateral trade and investment framewo rk agreement (TIFA) with the United States.
34 The 
UAE is a member of the Multilateral Investment Guarantee Agency.   
                                                      
31These are the Abu Dhabi Municipality (online info rmation available at: h ttp://www.adm.gov.ae); the 
Ajman Municipality;  the Dubai Municipality (online information available at: http://www.dm.gov.ae); the 
Fujairah Municipality (online information available at: http://www.fujairahmunc.gov.ae. );  the Ra's al-Khaimah 
Municipality; the Sharjah Municipality; and the Umm al-qaiwain Municipality . 
32 Sole proprietorship is a simple business method whereby an individual trades on his own account 
pursuant to a trade licence issued in his own name. Th is form of business entity is referred to as an 
"establishment" rather than a company. 
33 The Constitution states that all natural resources ar e the property of each emirate and that they should 
be preserved and effectively used for the good of the national economy. 
34 For details of the agreement see USTR online information.  Available at: http://www.ustr.gov/. WT/TPR/S/162 Trade Policy Review 
Page 20 
 
 
Table II.3 
Bilateral invest ment treaty  
Country  Final signature Cabinet decision Federal decree Execution 
Algeria  24/4/2001 (319/8) 2001 (27) 2002 3/6/2002 
Austria 17/6/2001 (422/5)2001 (26) 2001 3/6/2002 
Belarus  27/3/2000 (299/8) 2000 (1) 2001 .. 
China 1/7/1993 (260/6) 1993 (36) 1194 12/4/1994 
Czech Republic 23/11/1994 (12/12) 1995 (84) 1997 .. 
Egypt 11/5/1997 (110/6) 1997 (34) 1998 2/3/1998 
Finland 12/3/1996 (223/9) 1996 (22) 1997 .. 
France 9/9/1991 (80/5) 1992 (35) 1992 27/4/1992 
Germany 21/6/1997 (193/14) 1997 (35) 1998 2/3/1998 
Italy 22/1/1995 (84/6) 1995 (62) 1995 20/11/1995 
Korea 9/6/2002 (472/6)2003 .. .. 
Lebanon 17/5/1998 (307/15) 1998 (105) 1998 .. 
Malaysia 11/10/1991 (561/4) 1991 (24) 1992 25/3/1992 
Mongolia  21/2/2001 (492/5) 2001 .. .. 
Morocco 9/2/1999 (118/9) 1999 (89) 1999 .. 
Mozambique  24/9/2003 .. .. .. 
Pakistan 5/11/1995 (69/13) 1996 (37) 1996  
Poland 31/1/1993 (104) 1993 (6) 1993 29/1/1993 
Romania  11/4/1993 (61/12) 1995 (3) 1996 .. 
Sudan  18/2/2001 (345/8) 2001 .. .. 
Sweden 10/11/1993 (583/22) 1999 (32) 2000 .. 
Syria  26/11/1997 (541/9) 1998 (31) 1999 16/2/1999 
Tajikistan  17/12/1995 (433/7) 1999 (15) 2000 .. 
Tunisia  15/4/1996 (259/12) 1996 (24) 1997 24/2/1997 
Turkmenistan  9/6/1998 (420/27) 1999 (109) 1999 24/11/1999 
Ukraine .. .. (12) 2004 28/2/2004 
United States 15/03/04 .. .. .. 
Yemen  13/2/2001 (270/8) 2001 (75) 2001 25/8/2001 
.. Not available.  
Source: Information provided by the UAE authorities.