Dubai is one of the seven emirates that comprise the United Arab Emirates. Amongst the group, it is a rather an independent city state and is one of the most modern in the country. Oil and trade have transformed what was once a quiet and anonymous fishing village into the Pearl of the Middle East — Dubai — a modern desert trading city with luxurious four- and five-star hotels and world-class entertainment facilities. Tourists from all over the world revel in the bright lights and bargains that Dubai can offer, but could it also be your retirement haven?
NEW LIFE IN DUBAI CITY
Climate in Dubai
Make no mistake; Dubai is hot, hotter than tropical countries such as Thailand or Vietnam. In summer (June-September), the temperature can reach as high as 40 degrees C. You will need a lot of cold water and protective clothing and lotions, if you want to last in the desert summer months. However, air-conditioning is a blessing of technology that Dubai’s population has not hesitated to acquire and use. In fact people may find air-conditioned buildings altogether too chilly. It rains from February-March but the amount of rainfall is miniscule compared to say England or Ireland. Winter lasts from October to March, and features a healthy combination of warmth and sunshine.
The area cools down during September to May with cold night temperatures from 10 to 16 degrees Celsius. The humidity is nearly 60 to 70% near the cost makes people be indoors during the daylight hours.
Government in Dubai
Dubai is one out of seven geo-political entities that currently compose the United Arab Emirates (UAE). The UAE government operates as a constitutional monarchy ruled by the Al Maktoum family since 1833. The current Prime Minister is Mohammed bin Rashid Al Maktoum.
The UAE was established in 1971 and is ruled by the seven emirs who are called the Supreme Council of Rulers. The Council chooses the UAE’s prime minister and the cabinet. Up till 2006, government leaders were not elected.
Although the majority of the people and the rulers of UAE are Islamic, other cultures and religious are generally tolerated or respected, and allowances are now being made for tourists who may not be familiar with Muslin beliefs and practices regarding dress, diet and worship. It is better, however, for tourists and other visitors to exercise prudence and refrain from offending the Islamic population. UAE society is generally stable and will probably stay so in the foreseeable future.
Since 1966, the income from the oil industry has been channeled to meet the people’s needs regarding health care, education and infrastructure. Per capita annual average income is an astounding US $23,770. The oil and gas industry has also made it necessary for Dubai to employ foreign workers who now number 75 percent of the total population. Freedom of speech is enshrined in the constitution but there are strong controls on what appears in the media, especially when foreign media is concerned. On the other hand, there are about one million Internet users who can access a lot of information.
Tax System in Dubai
Dubai earns so much income from oil and gas that it does not need income from taxes and is an almost tax-less city. There are no income taxes, sales taxes, capital taxes, and withholding taxes. Only banks and oil companies pay 20% and 55% tax, respectively, on locally sourced income. Importers pay standard 4% duties but there are many exceptions such as food items and products meant for specific establishments. There have been talks and recommendations about setting up a modern tax system but these have remained at the proposal level but the current situation was reported by a post at the Dubai Expat Forum last September 28, 2009:
You realise that there are no personal income taxes in the UAE?
Honestly, there is little market for what you are suggesting. Experienced IFAs like me give advice on these matters (leaving or returning to UK) or people deal directly with HMRC. I think it’s a non-starter.
Sorry if this sounds negative, but I assume you want an honest & realistic response.
Medical Care in Dubai
Both the local population and foreigners are entitled to health care provided by the government either free or low cost. The health care network in Dubai consist of four government hospitals, a number of private hospitals, and the Dubai Medical Center. The number of facilities is quite sufficient for the number of population so that there is generally no hospital overcrowding or lines of patients waiting for assistance. Owing to Dubai’s small population and the numerous medical facilities in the private and public sectors, long waiting lists are almost unheard of in the country.
The quality of medical care in Dubai compares favorably with that available in Europe and the USA. However private health care is generally expensive. Most of the physicians and other health professionals are foreigners who received training in their own countries and were recruited to Dubai, attracted by the high salaries and good facilities. Respiratory and other illnesses caused by sand and dust, fatigue and heat are quite common among foreign workers, most of them employed in the construction industry. The ‘guest workers’ are also subject to excessive consumption of alcohol due to loneliness and homesickness.
Real Estate in Dubai
The Dubai government is making the acquisition of real estate by foreigners a much easier and simpler process. Real estate prices have gone up substantially over the last two years, especially in the case of prime properties. Real estate experts recommend buying rather than renting property. Houses and other living accommodations for sale are still reasonably priced while rent has gone up tremendously. Many foreigners stay for only a couple of years, making properties for lease much in demand and therefore priced higher.
The prices of villas in Dubai have continued to increase with a net worth of 8% in the third quarter of 2009 and are expected to remain stable in the short term.
Shopping in Dubai
With no taxes or import duties, Dubai has become transformed into a shopper’s paradise. It celebrates each year (generally January) with a Dubai Shopping Festival when companies offer even more bargains not only in goods but also in hotel accommodations and airplane fares. There is a huge amount of cargo passing through the area with low tariffs making for competitive rates and haven for shoppers.
Dubai’s shopping centers are 21st century marvels with air-conditioning, valet parking and other services. Those who want authenticity can visit the traditional markets or souks including the Deira souk that sells gold. Dubai laws ensure that the gold is correctly marked and classified. Other traditional products are rugs, food and spices. Bargaining is a skill that takes some practice but is expected by merchants.
Cost of Living in Dubai
The cost of living in the city has gone up so much that many choose to live in Sharjah, a nearby emirate. In the space of five years, prices have doubled. You pay US$2,200 for a single bedroom apartment and more if you want a two-bedroom apartment or house. Public transportation is not practical so you have to plan on having at least one car for yourself and another car for your spouse. One person needs about US$1000 a month for food.
It is quite clear that Dubai is an expensive city so you should factor that in your choice of a retirement haven. Living accommodations are expensive. So is private education if you have children who are still studying. Entertainment is expensive. On the other hand, there are advantages such as the fact that there are no taxes. If you have the means, however, you will find Dubai extremely entertaining and exciting, with its beaches, beach clubs, bars, restaurants, gold clubs, modern malls and traditional souks.