weighted score 5.5 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
UAE
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for the UAE as a sourcing destination.
Labour cost competitiveness
2
Very high labour costs relative to Asian and African manufacturing peers. Expatriate workforce commands premium wages. Domestic labour supply negligible for manufacturing roles.
Supply base depth
4
Limited domestic manufacturing base. Strong in aluminium (EGA), petrochemicals, and food processing. Most manufactured goods are imported and re-exported rather than produced locally.
Logistics & infrastructure
9
Jebel Ali port #9 globally. World-class air cargo via Emirates SkyCargo. Excellent road and warehousing infrastructure. Free zone logistics parks among the best in the region.
Workforce skills
7
Large expatriate professional workforce with strong English proficiency. Engineering and finance talent pools concentrated in Dubai and Abu Dhabi. Limited blue-collar manufacturing workforce.
Scalability
3
Small domestic market (~10M population). Manufacturing scalability constrained by labour cost and limited industrial workforce. Strong as a re-export and distribution hub rather than a production base.
Ease of doing business
8
DIFC and ADGM provide English common law jurisdictions with independent courts. Free zone company formation is straightforward. Onshore regulatory environment has simplified significantly since 2020 reforms.
Trade access & tariffs
7
GCC common external tariff of 5% on most goods. No EU FTA. Strong connectivity to Africa, South Asia, and MENA markets. Re-export hub positioning offsets some tariff disadvantage.
Sustainability baseline
6
COP28 host. Net zero 2050 commitment. Barakah nuclear and large-scale solar investments. But per-capita carbon emissions among the world's highest. Desalination energy intensity is a structural challenge.
Innovation & IP
2
R&D expenditure low as a share of GDP. Patent filings modest. Innovation ecosystem nascent outside fintech and proptech. IP enforcement improving through DIFC/ADGM courts but limited track record.
Quality standards
7
ESMA (Emirates Authority for Standardization & Metrology) enforces product standards aligned with international benchmarks. Free zone compliance infrastructure is strong. Halal certification framework well-established.
Logistics & Trade Hub
Logistics & Trade Hub
- Port infrastructure
- Jebel Ali (DP World) ranks #9 globally by container throughput and is the largest port in the Middle East. Direct connectivity to over 180 ports worldwide. Khalifa Port in Abu Dhabi adds capacity with an integrated industrial zone (KIZAD).
- Free zones
- Over 40 free zones including JAFZA (Jebel Ali Free Zone), DMCC, and Dubai South offer 100% foreign ownership, zero corporate tax, and streamlined customs. Free zones handle approximately 30% of UAE non-oil trade.
- Air cargo
- Dubai International (DXB) and Al Maktoum International (DWC) together form one of the world's largest air cargo hubs. Emirates SkyCargo operates a global freighter network. Critical for high-value, time-sensitive supply chains.
Business Environment & Legal Framework
Business Environment & Legal Framework
- Legal frameworks
- DIFC (Dubai) and ADGM (Abu Dhabi) operate under English common law with independent courts and internationally recognised judges. Contract enforcement, arbitration, and creditor protections are materially stronger than onshore UAE civil law.
- COP28 host
- UAE hosted COP28 in November 2023, positioning itself as a sustainability transition hub. Committed to net zero by 2050. Investing heavily in renewables (Barakah nuclear, Al Dhafra solar) while remaining a major hydrocarbon producer.
- Population & labour
- Total population approximately 10 million, of which over 85% are expatriate workers. Labour costs are very high relative to Asian manufacturing peers. Kafala (sponsorship) system has undergone reforms but labour market flexibility remains employer-weighted.
- EU FTA status
- No EU-UAE bilateral FTA in force. GCC-EU FTA negotiations have been ongoing since 1990 without conclusion. MFN tariffs apply to most goods. This limits tariff competitiveness for EU-bound supply chains versus FTA-covered origins.