This chapter examines the policy framework shaping the contribution of foreign direct investment (FDI) to the digital transformation and skills development in the United Arab Emirates (UAE). It reviews national and Emirate‑level strategies, the mandates and co‑ordination mechanisms of key institutions, and the investment, competition, data and labour market frameworks that influence digital and skill-intensive investment. Policy recommendations aim to better align FDI with the UAE’s digital and human capital objectives, enhance knowledge spillovers to domestic firms and workers, and support the transition towards a more innovative, knowledge‑based and diversified economy.
Investment Policy Perspectives in the United Arab Emirates
Abstract
The UAE’s national strategies demonstrate a clear commitment to building a knowledge‑intensive, digitally enabled economy and a skilled labour force. The UAE Centennial 2071, the Principles of the 50 and We the UAE 2031 articulate a high-level vision centred on innovation and human capital, while thematic strategies, including those on AI, the digital economy and talent attraction-translate these ambitions into operational goals. In 2025, the Ministry of Investment (MoI) set out the desired outcomes and targets for FDI, including the intention to double FDI inflows and triple FDI stock by 2031, with advanced industries set as priority sectors for investment. Ensuring that these frameworks explicitly define and reflect the contribution of foreign firms to skills development and digitalisation would help align FDI attraction with broader national development objectives.
The UAE’s institutional framework includes various actors governing policy on investment, the digital economy and skills development. The recently established MoI increasingly anchors the national investment agenda, while Emirate‑level economic development departments and specialised free zones shape local ecosystems to attract technology-oriented firms. Institutions responsible for digital and skills policy, including the Telecommunications and Digital Government Regulatory Authority (TDRA), the Ministry of Human Resources and Emiratisation, the Ministry of Industry and Advanced Technology, and the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office, run wide‑ranging programmes to expand digital capabilities and talent development. As responsibilities are distributed across many actors, closer co‑ordination between investment authorities and digital and skills institutions would help ensure that FDI more systematically supports national priorities in digitalisation and human capital development.
The UAE has achieved a high degree of openness for most digital activities, supported by liberal foreign ownership rules and strong free‑zone ecosystems. Updated intellectual property (IP) laws and a modernised competition framework all support technology-intensive projects, while the Personal Data Protection Law and sector-specific cybersecurity rules provide a more predictable foundation for data-driven investments. However, regulatory discretion in a limited number of strategic sectors, such as telecommunications and media, and differences between mainland and free‑zone regimes can reduce predictability for foreign investors.
The labour market and skills system are evolving to support the digital economy, with foreign firms playing an important role in skills development. Government initiatives -such as the National Program for Coders and special visa schemes- are also expanding the domestic talent base and strengthening access to global talent, while policies aim to increase nationals’ participation in the private sector (i.e. Emiratisation). However, fragmented labour regulations continue to drive disparities in job quality between the public and private sectors, constraining labour mobility and potentially weakening Emiratisation outcomes. While recent reforms have improved private sector conditions, further alignment of labour standards across the economy would enable foreign firms to deliver the desired labour market outcomes.
Ongoing fiscal reforms create an opportunity to better align investment incentives with diversification objectives, and direct support more effectively towards target sectors. However, the current landscape of investment incentives in the UAE is fragmented, with offerings that vary between and within Emirates and free zones. This is in the context of an evolving fiscal system that involves a recent introduction of a standard corporate income tax (CIT) rate and alignment with the Global Minimum Tax. Consolidating information on incentive schemes would help increase their transparency to potential investors. Strengthening monitoring and evaluation of incentives schemes would also ensure that incentives contribute effectively to digitalisation and skills development, including of nationals.
International agreements are increasingly leveraged to support the digital economy in the UAE, evident by the conclusion of Comprehensive Economic Partnerships Agreements (CEPA) with a diverse range of economies, many of which include provisions on e‑commerce, data flows, cybersecurity and AI. Earlier BITs signed by the UAE include labour-related commitments, but the conclusion of CEPA agreements expanded these commitments with an added focus on skills development. Other international instruments, such as the OECD Guidelines for Multinational Enterprises and associated due diligence guidance, offer a practical framework for ensuring enterprises address emerging risks tied to the digital transformation, including those affecting labour.
Clarify the role of FDI in supporting digitalisation and skills development in national strategic documents. Ensuring alignment between national strategies on investment, digitalisation and skills development would reinforce the impact of FDI on these priority areas. Ensuring that national strategic documents on investment, digital transformation and skills development are publicly available and accessible on the U.AE platform, the official national site, would allow investors to familiarise themselves with plans in these areas and support a co‑ordinated implementation of initiatives across ministries.
Ensure that the MoI is sufficiently represented in co‑ordination bodies on talent and digitalisation. The MoI may have a more prominent role in co‑ordination bodies overseeing the digital economy, talent development, and Emiratisation to ensure that investment considerations are systemically integrated into related policies and programmes, while at the same time promoting a more balanced representation of all Emirates beyond Abu Dhabi and Dubai.
Increase regulatory predictability and coherence for digital investment, particularly in strategic sectors and across regulatory regimes. Reduce regulatory discretion in strategic sectors such as telecommunications and media. Greater transparency on licensing, ownership thresholds and exemption criteria, alongside clearer guidance on how free‑zone licences interact with onshore regulatory and sectoral requirements, would reduce information asymmetries and facilitate market entry and scale‑up for digital firms.
Strengthen implementation capacity and co‑ordination in digital competition, data governance and intellectual property enforcement. Recent reforms have aligned the UAE’s framework more closely with international standards. To maximise their impact, further efforts could focus on issuing detailed guidance and case practice under the new competition regime, finalising implementing regulations under the Personal Data Protection Law, and building specialised enforcement capacity for IP- and data‑intensive activities.
Expand on recent labour market reforms to improve FDI outcomes on talent retention and Emiratisation. This includes aligning wages and working conditions between the public and private sectors to stimulate labour mobility and strengthen Emiratisation outcomes. Ensure appropriate labour standards, including the legal and institutional framework for workers’ voice arrangements, to improve job quality and in turn support talent retention. Harmonise labour regulations between free zones and the wider economy to reduce labour market segmentation.
Strengthen the skills ecosystem to support FDI in digital-intensive sectors. Further facilitate partnerships between foreign investors and education providers as well as adopting policies that incentivise workplace training. These efforts would help address skill gaps, especially in AI, cybersecurity, and data analytics, while advancing job satisfaction and retention. Ongoing efforts to develop a skills anticipation system should involve investment bodies and foreign firms to help anticipate future skills more effectively – FDI decisions often reflect forward-looking labour market trends.
Continue integrating provisions to support the digital economy and labour outcomes in international trade and investment agreements. The UAE uses international trade and investment agreements as a strategic policy tool to advance the digital economy, incorporating a wide range of issues such as e‑commerce, cross-border data flows, or cybersecurity, which helps develop a conducive regulatory environment for digital-intensive investment. International instruments on responsible business conduct could also be leveraged to improve labour standards and ensure businesses address risks related to technological advancements.
Enhance transparency of investment tax and non-tax incentives, including instruments aimed at digitalisation and skills development. The UAE could establish a portal consolidating all investment incentive offerings by economic sector and location (e.g. Emirate or free zone) to help investors navigate available support and ensure a more level playing field.
8.2.1. Digitalisation and skills development are high on UAE’s national agenda, but links with investment could be strengthened
At the federal level, the UAE’s strategic vision places strong emphasis on the digital transformation and workforce upskilling, as reflected in high-level strategies such as the UAE Centennial 2071, the Principles of the 50 and We the Emirates 2031. The UAE Centennial 2071 prioritises the development of a knowledge‑based economy through a strengthened education system, expanded science, technology, innovation, and research capacity, and targeted policies to raise productivity, support innovation-oriented industries and strengthen national R&D (UAE, 2024[1]). The Principles of the 50, which define the UAE’s overarching priorities until 2071, identify digital transformation and human capital as drivers of long-term economic development. In the shorter term, We the UAE 2031 seeks to advance digital infrastructure and enhance cybersecurity, while leveraging both global and Emirati talent (UAE, 2024[2]). These strategies highlight the central roles of the digital economy and talent on the UAE’s national agenda.
Other thematic and sectoral documents provide more granular objectives and targets for skills development and the digital economy, and have the potential to promote a co‑ordinated approach to strengthen the enabling infrastructure and skills base to sustain the digital transformation (Table 8.1). The Strategy for Talent Attraction and Retention aims to support enterprises in key sectors to recruit and maintain skilled workers, including digital sectors such as advanced analytics, AI, and blockchain. The National Strategy for Artificial Intelligence 2031 aims to expand the supply of AI-related skills through training programmes, professional development initiatives, and incentives for firms to develop an AI-capable workforce. Several complementary strategies address other components of the digital economy, such as data governance, cybersecurity, digital government services, and innovation. These strategies set quantitative targets (e.g. increasing the contribution of the digital economy to non-oil GDP) and establish mechanisms to expand the pool of ICT professionals, support coding and software‑development training, and promote the creation of technology-intensive enterprises.
In 2025, the UAE has set the desired outcomes and targets in terms of levels of FDI, in a document shared with the OECD during stakeholder consultations conducted for the report, including an objective to triple FDI stock by 2031. The document also identifies priority sectors with strong potential for investment, productivity gains, and technology transfer, such as manufacturing (e.g. semiconductors, agritech, machine and equipment), financial services, transport and logistics, renewable energy, and ICT. The document emphasises improvements to the investment climate through greater transparency, more efficient regulatory processes, and stronger investor aftercare. The MoI envisages implementing a set of programmes and initiatives, under its scope or in partnership with sectoral ministries and government agencies at the federal and Emirate level, to achieve the desired FDI targets. Digitalisation would feature as a cross-cutting priority across these initiatives, including those related to private sector development, virtual assets and fintech, and R&D promotion.
Source: TDRA (2025[3]), National Cybersecurity Strategy, https://tdra.gov.ae/userfiles/assets/Lw3seRUaIMd.pdf; UAE Ministry of Economy, (2021[4]), Strategy for Talent Attraction and Retention, https://www.moet.gov.ae/documents/20121/82722/Talent+Attraction++Retention+Strategy_Final-SS_English.pdf.
To translate national objectives to their specific localities, Emirates develop and implement their own strategies and plans, including in the domain of investment (Chapter 6). For example, Dubai’s Economic Agenda D33 includes objectives to nearly double the annual amount of FDI to Dubai and targets key digital sectors such as ICT and specific technologies (e.g. AI and data centres). The Abu Dhabi DED, in partnership with the Abu Dhabi Investment Office (ADIO), operates a cluster-based investment framework to attract FDI in strategic sectors. For example, ADIO’s “SAVI” cluster supports the development of smart and autonomous vehicle industries, while another cluster launched more recently for Fintech, insurance, digital and alternative assets (FIDA). Free zone authorities also exercise broad autonomy and could be specialised in digital-intensive activities, such as logistics, advanced manufacturing, media, financial services, or ICT, offering streamlined licensing, access to infrastructure and incentives to attract investors.
The UAE has a well-established strategic policy framework; yet the role of investment in contributing to sustainable development objectives could be better defined. Although MoI has set national targets and objectives related to overall inflows of FDI, there is scope to develop this further by defining the expected contribution of foreign firms to the labour market outcomes (e.g. skills development, Emiratisation). Consultations with stakeholders suggest that planned programmes and initiatives designed to meet FDI targets by MoI are similarly not directly linked with skills outcomes or digitalisation, and the Strategy for Talent Attraction and Retention 2031 does not clearly set out how FDI could be used as a lever to drive skills development. Integrating investment considerations in strategies relevant to skills development and digital transformation, or vice versa, would ensure alignment and minimise fragmentation between these policy areas that often fall under the purview of different ministries (OECD, 2022[5]). The experiences of other economies, such as Ireland, offer examples for integrating such considerations in investment strategies and plans, while highlighting other areas of priority such as regional development to support a more equitable distribution of FDI (Box 8.1).
The UAE could also ensure that documents or national strategies relevant to FDI, skills development and digitalisation are publicly accessible on digital platforms such as U.AE or Invest UAE. The U.AE site is a positive step towards consolidating information on national strategies and plans in one platform, but these documents are not always available to external stakeholders. Ensuring these strategies are available for all users would help, on one side, to build investors’ understanding of UAE’s priorities in these areas, while ensuring alignment between all government stakeholders involved in the implementation of these strategies. In light of the rapid pace of technological change, strengthening the monitoring and evaluation of digital- or investment-related strategies would help ensure that objectives related to digital FDI remain relevant, effective and aligned with evolving policy priorities.
Ireland’s investment promotion agency, IDA Ireland, operates under the direction of its Strategy on for Sustainable Growth and Innovation 2025‑2029 (hereafter Strategy). The Strategy identifies priority sectors for FDI, including technology, international finance services, business services and life sciences. Technology is positioned not only as a priority sector for investment but also as an enabling factor to increase Ireland’s competitiveness across various sectors. Aside from digitalisation and AI, Ireland identifies three other growth drivers-semiconductors, health, and sustainability-reflecting broader national priorities and strategies that are cross-referenced in the Strategy.
In the process of drafting the Strategy, IDA Ireland considered the impact of FDI as broader than capital inflows or headline job creation. The Strategy considered FDI impact across multiple dimensions, including job quality, innovation, local linkages, and alignment with national goals such as sustainability, digital transformation, and regional development. It reflects a shift from measuring inputs to evaluating broader economic and societal outcomes. To that end, target outcomes include increased training expenditures, measured by the number of people trained, and reduced carbon emissions, and expected R&D spending.
Regional development is one impact area and an important pillar of the Strategy. IDA Ireland includes specific objectives and targets to promote a more equitable distribution of FDI across regions. It commits to securing over half of all new investment projects (55% of 1000 projects) in regional locations outside Dublin, supported with specific targets for each region. To achieve these targets, the Strategy envisions strong collaboration across regions to identify, market and capitalise on investment opportunities in each region aligned with local strengths and national priorities.
Source: (IDA Ireland, 2025[6]), Strategy for sustainable growth and innovation 2025‑2029, https://www.idaireland.com/getmedia/fc32d256-c7df-4ff6-9251-12af3958d39e/IDA-Strategy-2025-2029.pdf
8.2.2. The UAE’s institutional landscape features multiple actors with overlapping mandates on investment, digitalisation and skills
Investment policy is overseen by several government bodies at the federal and subnational levels (Figure 8.1). Emirate‑level authorities set their own strategies for investment promotion, design investment incentives and provide investor aftercare services. To strengthen co‑ordination and present a more unified investment profile, the UAE established the MoI under Decree Law No. 37 of 2023. The MoI was created to centralise the federal role in investment strategy, policy co‑ordination and high-level decision making, taking over part of the responsibilities formerly held by the Ministry of Economy and Tourism. At present, the MoI acts as the focal point for investment policy and caters to investors above a certain investment threshold. Other federal and Emirate‑level bodies also play complementary roles in investment governance, including:
Federal level: the Ministry of Industry and Advanced Technology maintains an Investment Office to cater to investments in industrial activities. Government reshuffling efforts in 2025 has led to the creation of the Ministry of Foreign Trade (MoFT), which assumed the investment-related functions of the Ministry of Economy and Tourism. MoFT facilitates market entry, easing setup processes and banking, to investment projects under a defined investment threshold. It also assists digitally oriented enterprises to integrate into the UAE market through programmes like NextGenFDI.
Emirate level: Department of Economic Development (DED) or equivalent entities serve as the investment promotion authorities within their respective jurisdictions. This includes the Abu Dhabi Investment Office (ADIO); Dubai (DED/Invest Dubai) and other Emirate economic development departments (e.g. Sharjah, Ras Al Khaimah).
Free zones: The UAE has over 40 free zones that serve as key investment hubs, offering 100% foreign ownership, streamlined licensing, and business-friendly setup services that support rapid market entry. Free zones function as specialised ecosystems (i.e. industrial, digital, or logistics-oriented). Major sector-specific zones include the Dubai International Financial Centre, Dubai Internet City, Abu Dhabi Global Market, and Ras Al Khaimah Free Zone, each with their own investment promotion and licensing functions. Free zones are governed by their own zone authorities at the Emirate‑level, and not a single federal entity.
For FDI to contribute meaningfully to digitalisation and skills development, closer collaboration across the institutions shaping the UAE’s agenda in these areas is important. Co‑ordination would help align workforce development initiatives with the needs of digital MNEs, while ensuring that MNEs themselves play a role in building and upgrading digital skills of the local labour force. At the federal level, various ministries and agencies have a mandate on skills development and implement their own skills programmes. For example, TDRA is tasked to develop digital skills and provides scholarships and funding to ICT projects through the ICT Fund. The Ministry of Human Resources and Emiratisation is responsible for regulating the labour market, developing workforce policies and advancing Emiratisation. Both the Ministry of Industry and Advanced Technology and the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office implement skills development programmes in their respective sectors. In addition to these bodies, the Ministry of Foreign Trade oversees the implementation of the Strategy for Talent Attraction and Retention and chairs the committee responsible for it, which includes representatives from various ministries (not including MoI) as well as two Emirate‑level DEDs (i.e. Abu Dhabi and Dubai).
Similarly, various actors govern the digital economy at the national level. For instance, TDRA leads the regulation and development of the digital government ecosystem, oversees national ICT infrastructure and runs initiatives to build digital capabilities across the public sector. The Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office drives the national digital economy agenda, promoting AI adoption and digital readiness across government and the private sector. The Ministry of Industry and Advanced Technology advances digitalisation within the industrial sector through initiatives such as “Make it in the Emirates” and Industry 4.0 programmes. To co‑ordinate between these federal-level bodies, the Digital Economy Council provides overarching strategic direction and co‑ordination. At the subnational level, Emirates such as Dubai and Abu Dhabi have their own formal co‑ordination mechanisms. In Abu Dhabi, for instance, the Advanced Technology Research Council, established in 2020, drives the digitalisation agenda of the Emirate.
The UAE’s institutional setup for investment, digitalisation and skills development
Source: OECD elaboration.
The decentralisation of investment responsibilities allows Emirates to pursue their own investment promotion strategies that align with their competitive strengths and sectoral priorities. While the institutional landscape offers flexibility, it may benefit from stronger co‑ordination to ensure consistent service delivery and policy coherence across Emirates. This provides scope for the MoI to assume a more integrative, harmonising role (Chapter 6). The MoI has taken steps in this direction with the creation of the InvestUAE platform, which will be a unified entry point for investors and the core platform for delivering investment-related services. According to the MoI, this platform aims to offer information on investment opportunities, relevant policies and available facilitation tools, articulating the UAE’s overall value proposition.
To further improve policy coherence, the MoI could consider taking a more active role in the federal councils and committees that govern skills development and digitalisation. Currently, the MoI participates in several intergovernmental councils and committees, including the Higher Committee for Free Trade Negotiations and the Industrial Development Council, as well as in multiple bilateral trade and investment joint committees, it is not currently presented in bodies concerned with skills development or the digital economy. The participation of investment authorities in those co‑ordination bodies is limited to more proactive Emirates, most notably Abu Dhabi and Dubai. Greater involvement of the MoI in these fora would help ensure that investment considerations are systematically reflected in the design of skills and digitalisation policies, while also aligning investment policy more closely with broader national priorities, including Emiratisation. Committees addressing cross-cutting issues such as talent attraction and retention could more systematically include DEDs from other Emirates. Where full representation is not in place, the MoI could play a convening role and maintain an approach that reflects the priorities of Emirates, requiring close co‑ordination between MoI and subnational investment authorities. More broadly, the UAE would benefit from strong co‑ordination that current technical programmes are implemented in close co‑ordination to prevent duplication of efforts. Consultations with stakeholders for the report have shown, for instance, multiple ministries conducting training programmes on AI or digital skills more broadly.
Adopting a whole‑of-government approach supported by inter-agency councils, task forces, and formal communication channels can help address existing policy silos, while inter-agency working groups and joint programming at the implementation level can pool resources, foster co‑operation and advance cross-cutting initiatives. For instance, in Denmark, the Agency for Digitalisation provides strategic guidance and maintains IT governance models through inter-ministerial project offices, supporting the Danish Council’s IT projects (OECD, forthcoming[7]). Similarly, in Estonia, the e‑Estonia Council co‑ordinates inter-institutional collaboration, advises on digital policy, establishes expert committees, and working groups or commission studies. The Centre of Government (e.g. the President’s or Prime Minister’s Office) plays an important role in bridging political interests and bureaucratic boundaries. In a growing share of OECD and partner countries (42% in 2023), national digital strategy development, and the broader question of digital transformation is elevated above the ministerial level. Japan’s Digital Agency, operating at the ministerial level under the Prime Minister’s supervision, promotes digitalisation in government functions and prioritised sectors. By reducing bureaucratic complexity, these mechanisms can help ensure policy coherence.
8.3.1. Recent reforms have expanded UAE’s openness to digital investment, while regulatory scrutiny remains in a few strategic sectors
Recent reforms to the foreign ownership and business establishment framework have created a comparatively open environment for most digital activities. Amendments to the Commercial Companies Law since 2020 have enabled full foreign ownership across a wide range of ICT, software, cloud, e‑commerce and digital services activities, while major specialised free zones (e.g. Dubai Internet City, Dubai Silicon Oasis, Dubai CommerCity, ADGM) offer established pathways for wholly foreign-owned enterprises. As a result, statutory ownership restrictions are minimal in most digital sub-sectors, and foreign investors face few legal limitations when establishing or acquiring companies in these activities. A separate regime applies, however, to digital activities considered to have “strategic impact”, under which sectoral regulators may determine ownership, entry and licensing conditions in light of national interest considerations. Under Cabinet Resolution No. 55/2021, telecommunications, financial services, satellite communications and parts of the media industry fall under this category, giving regulators such as TDRA, the Central Bank and the Media Council the authority to assess foreign participation based on infrastructure criticality, public service obligations and security related factors. For most digital activities this discretion is not applied in practice, but regulators may introduce specific ownership expectations, capital requirements or governance conditions when deemed necessary.
In telecommunications, although the general legal framework allows for 100% foreign ownership, TDRA maintains a baseline regulatory expectation of 51% UAE ownership for operators of public telecommunications infrastructure, with exemptions possible but assessed on a case‑by-case basis. This default rule reflects the sector’s strategic role in national resilience, spectrum management, submarine‑cable security and emergency communications. While the licensing framework provides for exemptions, the regulations do not set out specific, published criteria for determining when an exemption may be granted. Assessments are instead guided by TDRA’s judgement of the criticality and national security relevance of the network concerned, rather than by codified ownership thresholds by licence type. As a result, the decision process involves a degree of regulatory discretion, and investors cannot fully anticipate how ownership requirements will be applied for different licence categories. In practice, the framework has allowed for increasing foreign participation over time, including higher foreign shareholding limits in licensed operators and full foreign ownership in a range of telecommunications-related and digital infrastructure activities that do not involve the operation of public networks. While the licensing framework allows for exemptions on a case‑by-case basis, these have in practice tended to apply to non-infrastructure licences, such as resellers, whereas operators of networks deemed critical are generally expected to retain local ownership. Greater transparency of the factors and thresholds used in exemption decisions (e.g. by embedding them into law or publishing them into official guidelines) -without weakening the legitimate protections afforded to strategic infrastructure‑ could enhance predictability and reduce information asymmetry for prospective investors.
Media and broadcasting are among the sectors subject to sector-specific licensing and content regulation in the UAE, particularly for traditional outlets such as print media and terrestrial television and radio. The federal media framework, anchored in the Federal Decree‑Law on Media Regulation (2023) and its Implementing Regulations, together with Cabinet Decision No. 22 of 2017 on Licensing Media Activities (UAE, 2017[8]), establishes licensing, content and approval requirements that are administered at the federal level by the UAE Media Council. While the Media Law does not explicitly impose economy-wide foreign equity caps, Cabinet Decision No. 22/2017 requires that licences for certain media activities be held by UAE/GCC nationals, effectively conditioning market access on nationality rather than ownership shares (Lexology, 2025[9]; UAE, 2023[10]). Such approaches, where foreign participation in the media sector is permitted but subject to nationality-based licensing, public-interest tests or content controls, are common internationally, including across many OECD economies, as reflected in the OECD FDI Regulatory Restrictiveness Index.
In the UAE, foreign media and digital content firms frequently establish in specialised free zones (e.g. Dubai Media City, twofour54), which allow full foreign ownership and offer licensing regimes tailored to production, animation, advertising and post-production activities. Under the federal media framework, free‑zone licences are territorially bounded, and media activities conducted beyond the free‑zone perimeter, particularly distribution and broadcasting to the domestic market, are subject to applicable federal and emirate‑level rules, including additional licensing approvals and compliance with content standards. This regulatory structure shapes the modes of operation of foreign media firms, facilitating foreign participation in content creation and studio-based activities, while onshore distribution and broadcasting remain subject to closer regulatory oversight.
8.3.2. Competition reforms have enhanced conditions for digital investment, yet greater clarity and co‑ordination will be needed to address digital market challenges
Competition policy shapes how investment contributes to market dynamism in the UAE’s digital economy, particularly in sectors with high fixed costs, network effects and rapid technological change. The adoption of Federal Decree‑Law No. 36 of 2023 represents a significant update to the competition framework (UAE, 2023[11]). The new law replaces the 2012 regime, removes former sector-wide exemptions, broadens the scope of activities subject to competition oversight, and introduces clearer rules on restrictive agreements, abuse of dominance and economic concentrations. With the subsequent 2025 Cabinet Decision defining explicit merger notification thresholds, including an AED 300 million domestic turnover test and a 40% market-share test, the UAE has moved closer to international practice in merger control (Gtlaw, 2025[12]). These reforms are consistent with international practice, where the increasing scale of digital projects, rising concentration in digital-intensive sectors, and the risk of “killer acquisitions” call for stronger tools to detect and review transactions that may reduce market contestability or stifle innovation (OECD, 2023[13]).
Publicly available enforcement practice under the new regime remains limited, reflecting the recent entry into force of the legislation. Nevertheless, the enhanced framework provides a clearer legal basis to scrutinise consolidation in digital markets, including where cross-border mergers and acquisitions involve large technology firms or investors with strong market positions. Moving forward, publishing detailed guidelines, case decisions and market studies would improve predictability for investors, support consistent interpretation of the new rules and increase transparency in areas relevant to digital markets, such as market definition, dominance assessment and thresholds for exclusionary conduct.
Competition in the ICT sector is regulated directly by TDRA, as telecommunications are excluded from the scope of the UAE’s general competition law and instead governed under the Telecommunications Law (Federal Decree‑Law No. 3 of 2003). Within this framework, TDRA oversees market entry and licensing, conducts market reviews, applies remedies to operators with significant market power, regulates tariffs, and sets interconnection and wholesale access conditions under which firms may provide or distribute digital services (TDRA, 2025[14]). This approach is broadly aligned with the OECD Recommendation on Broadband Connectivity, which emphasises that promoting competition in communications infrastructure, characterised by significant fixed costs and natural entry barriers, requires dedicated regulatory tools to complement general competition law. In the UAE, these mechanisms play a central role in managing a structurally concentrated market, ensuring service quality, and enabling downstream competition in digital services.
At the same time, competition issues arising in data‑intensive and platform-based digital markets that fall outside the telecommunications sector are not subject to equivalent sector-specific or ex ante regulatory frameworks. The UAE has not adopted ex ante digital competition measures of the type emerging in some OECD jurisdictions (e.g. EU’s Digital Markets Act), such as specific obligations for large digital platforms, interoperability requirements, or restrictions on self-preferencing and bundling (OECD, 2022[15]). Competition concerns arising from platform dominance, exclusionary conduct or algorithmic practices therefore fall under general competition law principles or sector-specific rules. This approach is consistent with the UAE’s broader regulatory model, which prioritises sector-specific oversight and flexibility, but it places greater weight on traditional antitrust tools and on the effectiveness of merger control in preventing harmful concentration in digital sectors. Formalising co‑operation protocols (e.g. joint market studies, shared analytical resources, structured consultations on mergers and conduct issues) between the Ministry of Economy and sectoral regulators could strengthen coherent application of competition principles across the digital economy. This would also help avoid regulatory gaps where competition issues arise outside traditional sector boundaries (e.g. digital platforms providing communications services).
The distinction between free zone and mainland regulatory regimes continues to influence market entry strategies for digital investors. Free zones offer full foreign ownership, streamlined establishment processes and tailored licensing for technology and digital content activities, making them an attractive base for regional headquarters, software development, digital production and fintech innovation. However, depending on the activity, serving customers located in the UAE mainland may require an additional onshore license or a commercial presence compliant with sector-specific federal or emirate‑level regulations. This dual structure is well understood by investors but can introduce administrative complexity for firms seeking to combine onshore service delivery with regional operations, particularly where licensing, competition rules and sectoral requirements differ across emirates. Greater transparency and clearer guidance on how free zone licenses interact with mainland regulatory obligations, including sector approvals, competition law applicability and the conditions under which a free‑zone entity may supply services to mainland customers, would help reduce uncertainty and support more predictable market entry.
8.3.3. The UAE has strengthened IPR and data governance frameworks, yet further advances in enforcement and institutional capacity can support digital investment
The UAE has significantly modernised its intellectual property rights (IPR) framework in recent years, strengthening both the legal and institutional foundations that support innovation-driven investment and digital transformation. A set of new federal laws adopted in 2021 -covering trademarks, industrial property, copyright and related rights- replaced earlier statutes and aligned the regime more closely with international standards, expanding the scope of protections and modernising registration and enforcement procedures (Chapter on domestic legal framework) (MOET, 2025[16]). These reforms provide comprehensive statutory protection for patents, trademarks, industrial designs, trade secrets, software and creative works, all of which are central to digital economy activities. Administration of the system is increasingly consolidated in the Ministry of Economy, which serves as the national IP office and offers unified digital platforms for filing and managing rights, while certain free zone jurisdictions, such as Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), maintain complementary frameworks aligned with global practice (DIFC, 2025[17]). This structure enhances predictability for investors, though firms operating across both free zone and mainland environments may still need to navigate parallel processes, especially in sectors where IP interacts with sector-specific rules such as software licensing, content regulation or financial technologies.
While the legal framework for IPR is robust, practical enforcement, especially in fast-moving digital sectors, remains an area where continued institutional strengthening can enhance investor confidence. The UAE offers civil and criminal enforcement avenues, including injunctions, damages and customs actions against counterfeit goods. However, the effectiveness of IP protection in digital industries depends on the ability to address complex forms of infringement such as unauthorised reuse of software code, misappropriation of trade secrets, or online distribution of copyrighted content (OECD, forthcoming[7]). In this context, the UAE has increasingly adopted proactive, technology-enabled enforcement approaches. The Ministry of Economy’s InstaBlock initiative, implemented in strategic partnership with the Telecommunications and Digital Government Regulatory Authority (TDRA), leverages AI-based monitoring tools and a real-time “LiveBan” mechanism to detect and immediately disable unauthorised streaming and pirated digital content. The scale‑up of this system is reflected in a sharp increase in blocked infringing websites in recent years, and the establishment of the InstaBlock Lab in 2025 as a dedicated hub for inter-agency and private‑sector collaboration on digital IP enforcement.
For technology-intensive FDI, the value of investment often resides in algorithms, models, proprietary datasets and confidential business processes, which are assets that are more difficult to monitor and protect. Ensuring that enforcement mechanisms remain agile, well-resourced and equipped to handle these technical cases will be important as the economy becomes more digitally intensive. Expanding capacity-building for judges, enforcement officials and administrative authorities on software, AI and data-related IP would help ensure that the system is equipped to handle increasingly technical disputes. Continued efforts to support SMEs and research institutions in registering, managing and commercialising IP would also reinforce domestic innovation ecosystems and improve the potential for knowledge spillovers from foreign investors. Complementing legal and enforcement reforms, recent national strategies have increasingly emphasised practical implementation mechanisms to link research, skills development and industry needs, including industrial PhD schemes, shared access to research facilities, regulatory testbeds and pilot environments, and co-funded applied research calls in priority technology areas. Such mechanisms can help translate stronger IPR protection into commercially relevant innovation outcomes.
The UAE has taken important steps to establish a comprehensive data governance framework, reflecting the growing role of data in digital transformation and foreign investment. The Federal Decree‑Law on Personal Data Protection (PDPL), adopted in 2021, introduced the country’s first economy-wide data protection regime, aligned with international practice through principles on lawful processing, transparency, data-subject rights and risk-based security obligations (UAE, 2021[18]). Oversight is assigned to the UAE Data Office, and the law applies extraterritorially to entities abroad processing personal data of individuals in the UAE. These features provide an important baseline of predictability for digital and data‑intensive investors. Several operational elements, such as breach-notification procedures, cross-border transfer mechanisms and technical safeguard standards, depend on implementing regulations that remain under development. Finalising and publishing these regulations, accompanied by detailed guidance for businesses, would strengthen legal certainty and support long-term planning for investors.
Data governance is shaped by a multi-layered regulatory landscape combining the federal PDPL with sector-specific rules and separate regimes in free zones. Sensitive categories of data such as financial, health, telecoms or government data, are governed by dedicated sectoral legislation, which may impose stronger requirements on data storage, retention and security than the general PDPL (Bakermckenzie, 2025[19]). Free zone jurisdictions operate their own data protection regimes, aligned with global standards but independent of federal law. While this approach provides flexibility and supports sector-specific oversight, it may also increase administrative complexity and compliance costs for digital firms with integrated regional operations. Greater co‑ordination and transparency across federal, sectoral and free zone regimes (e.g. through consolidated regulatory guidance or joint regulatory statements) would help reduce fragmentation and facilitate efficient, innovation-friendly data management practices.
Cybersecurity and data localisation practices further shape the operating conditions for digital investors, particularly in sectors handling sensitive or critical data. The PDPL includes general security obligations requiring firms to adopt technical and organisational measures consistent with international best practice, while sectoral regulators (e.g. TDRA in telecoms and the Central Bank in finance) impose additional requirements relating to cybersecurity and data retention. Although the PDPL does not mandate comprehensive data localisation, sector-specific rules and public-sector procurement standards can result in strong expectations for in-country hosting of sensitive data. As a result, foreign cloud providers, fintech firms and AI developers often adopt hybrid or locally hosted infrastructures to meet regulatory or client requirements. These measures aim to ensure resilience, but may increase costs for new entrants and constrain the scalability of regional digital services. Clarifying when data residency requirements apply, and setting transparent conditions for lawful cross-border data transfers, would improve predictability and support the UAE’s ambition to serve as a regional hub for cloud, AI and data-driven investment.
8.3.4. The UAE could expand on recent labour market reforms to further enable foreign firms to support talent retention and Emiratisation
Access to skilled labour is an important resource for the UAE to sustain its dynamic business environment. Talent attractiveness is therefore a central government priority, reflected in the Strategy for Talent Attraction and Retention. In a context where of global and regional competition for talent, the UAE‑and neighbouring GCC economies-have adopted immigration programmes that favour long-term retention of talent. The Golden Visa scheme, for instance, is a 10‑year residency permit that allows investors, entrepreneurs, specialists, high-skilled workers or high-performing students to live and work in the UAE without requiring a sponsor. In 2024, the initiative was expanded to include workers with skills that support environmental protection and sustainability (Blue Visa) and freelancers (Green Visa). Investment authorities also facilitate for other federal visa schemes that allow workers to be based in the UAE and work remotely for entities abroad. This scheme acts as a talent attraction tool as it can broaden the talent base and allow workers to transition into the domestic labour market as job opportunities arise. Such initiatives enable the UAE government and enterprises to meet their skills needs by facilitating cross-border labour mobility and allowing for more streamlined recruitment procedures for foreign workers.
Internal labour mobility is also a key conduit for the diffusion of skills between foreign and domestic enterprises by enabling workers trained in foreign firms to transfer technical knowledge and operational practices to domestic peers. Mobility from the public to the private sector is particularly important in increasing the presence of nationals in the private sector, an area of increased priority to the UAE. To support this, the UAE has introduced initiatives to improve the employability of nationals and incentivise their employment in the private sector under the Emiratisation or the Emirati Talent Competitiveness Programme (NAFIS). These include salary support schemes, unemployment and child allowance benefits, apprenticeships, and employment services such as job search assistance. Private sector firms are also required to meet certain quotas. Firms with a minimum of 50 employees must increase the number of Emiratis in skilled roles by 2% annually, targeting 10% by 2026, while firms with 20‑49 employees in select sectors are required to hire at least one national, increased to two by end of 2025 (Government of UAE, 2025[20]). Companies based in free zones are exempt of these requirements but are encouraged to participate. Other non-compliant businesses are required to pay fines depending on the size of the firm.
Differences in job quality between the public and private sectors may continue to drive nationals to favour public sector employment. Labour market segmentation between nationals and non-nationals is partly due to distinct legal frameworks governing each sector. Employment in the public sector is governed by Federal Decree Law No. 49 of 2022, while private sector employment is regulated by Law No. 9 of 2022 (domestic workers) and Law No. 33 of 2021 (other private sector roles). These legal distinctions contribute to disparities in job quality between the two sectors (Elsayed, 2024[21]). For example, the termination of employment contracts is restricted to narrowly defined cases in the public sector, which provides for greater job security. Working hours are also relatively higher in the private sector while wages are on average lower.
While the coexistence of distinct labour regulations across sectors is common in many economies, these differences in the UAE reinforce perceptions among nationals that public sector employment is more favourable, which complicates efforts on Emiratisation. In this context, foreign firms frequently report Emiratisation requirements as a challenge, citing difficulties in attracting and retaining national workers in the private sector (Business Sweden, 2025[22]). Addressing structural differences in job quality between the public and private sectors would support more effective implementation of Emiratisation by improving the relative attractiveness of private‑sector employment for nationals. Greater alignment of wages and working conditions, alongside a review of the public-sector wage bill, would also advance broader economic diversification objectives (IMF, 2025[23]) In parallel, continued investment in skills development programmes would strengthen the employability of nationals and facilitate their entry into higher-skilled positions in foreign firms.
Additional efforts are also needed to improve overall working conditions to reduce employee turnover at firms. While foreign firms tend to offer more favourable employment conditions than domestic firms, which can support employee retention, these advantages are not automatic and depend on the host country’s legal and institutional framework governing employment. Globally, foreign firms pay on average 34% higher wages than domestic firms, and are more likely to provide upskilling opportunities, with nearly half offering training compared to one‑third of domestic firms (OECD, forthcoming[24]).
The UAE has taken steps to strengthen its employment framework. Federal Decree No. 33 of 2021, which amends Law No. 8 of 1980, introduced several reforms to private sector employment that include more defined rules on employment contracts, stronger prohibition against discrimination, and mechanisms to set a minimum wage (Elsayed, 2024[21]). Further progress in this area could help improve job quality and reduce excessive turnover in the private sector. Appropriate labour standards ensure that FDI leads to better, rather than worse, working conditions in the host country (OECD, 2022[5]). For instance, statutory minimum wage policies have been associated with lower employee turnover (OECD, 2023[25]). Legal and institutional framework to promote workers’ voice arrangements, including for foreign workers, can contribute to improved wage and non-wage working conditions and higher job satisfaction, and thereby reduce excessive turnover (OECD, 2022[5]). Harmonisation of labour standards between free zones, in particular DIFC, ADGM, and the wider economy, would ensure that investors maintain decent working conditions regardless of location.
8.4.1. The UAE leverages international agreements to support the digital economy and shape emerging digital norms
International trade and investment agreements can support the development of the digital economy by shaping investment conditions, market access and regulatory frameworks (OECD, forthcoming[7]). Some of these agreements now feature provisions addressing topics such as digital trade facilitation, privacy and data protection, cybersecurity, cross-border data flows, or source code commitments. Economies take different approaches to embedding these elements in international trade and investment agreements, with some opting to include dedicated digital trade chapters, while others integrate such provisions in chapters relevant to telecommunications or financial services. The conclusion of broader Digital Economy Agreements (DEA) to strengthen international co‑operation in the digital economy form another tool used by economies in recent periods.
The UAE has surpassed peer economies in the conclusion of international agreements with provisions addressing critical issues in the digital economy (Figure 8.2). Between 2020 and 2025, the UAE has signed 17 agreements with such provisions, more so than Singapore (13), Ireland (7), as well as each GCC economy, which all concluded two agreements in the same period. Much of this owes to the UAE’s recent practice of concluding Comprehensive Economic Partnerships Agreements (CEPA) with a diverse range of economies, including Australia, Viet Nam, Costa Rica, Jordan, India, and Indonesia. As of November 2025, the UAE has signed 32 CEPAs, 12 of which are currently in force. The UAE’s CEPA agreements include investment chapters that prioritise facilitation, establishing bodies to identify opportunities, monitor investment flows and remove barriers to investment, while addressing investment protection clauses to BITs (Chapter 4). Aside from CEPAs, the UAE seeks to advance digital co‑operation through the conclusion of Artificial Intelligence and Digital Economy Agreements (AIDAs) and related MoUs. These instruments take a collaborative approach by advancing knowledge exchange, capacity building, and the sharing of best practices in AI, innovation ecosystems, and wider digital transformation. They also promote joint work on digital infrastructure and data-related capabilities that underpin advanced digital services.
Note: The data includes agreements that are signed but not yet in force.
Source: Mira Burri, Maria Vasquez Callo-Müller and Kholofelo Kugler, TAPED: Trade Agreement Provisions on Electronic Commerce and Data,
available at: https://unilu.ch/taped.
Not only does the UAE make greater use of trade and investment agreements to advance the digital economy, but its agreements include a wider set of digital-related topics compared to peer economies, incorporating elements such as e‑commerce, cybersecurity, cross-border data flows, competition policy and emerging digital technologies such as AI. For example, cybersecurity is featured in all of the 17 agreements with digital provisions and usually entails a joint commitment to strengthen cybersecurity for digital trade by enhancing incident-response capabilities, deepening co‑operation on cyber threats, and recognising the importance of a skilled cybersecurity workforce.
Co‑operation on competition policy in the digital economy is encouraged in the Chile‑UAE CEPA agreement, which was signed in July 2024 but is yet to come into effect. Such provisions can help parties address anti-competitive business conduct or risks in the digital market, such as abuses of dominant position (OECD, forthcoming[7]). Dedicated chapters on intellectual property are included in nearly all of the 17 agreements, ensuring standards on IP protection while seeking to strengthen enforcement frameworks and co‑operation between parties. Safeguards against source code disclosures are only included in the Australia-UAE CEPA, which entered into force October 2025. The clause limits compulsory access to proprietary source to instances where authorities require such access to verify compliance with domestic laws. Such an exception is common and preserves space for government to address risks tied to digital technologies, including those related to consumer protection, data protection or other public-interest objectives (OECD, forthcoming[7]).
While provisions on the digital economy feature prominently in the UAE’s stock of international agreements, the clauses vary in terms of legal enforceability. In many of the earlier CEPAs, digital and e‑commerce chapters are not subject to dispute settlement, which reflects a preference towards a more co‑operative approach. Provisions on cross-border data flows, for instance, range from high-level acknowledgements to more binding obligations for parties. The India-UAE CEPA agreement, signed in 2022, acknowledges the importance of cross-border data flows (Article 9.11) while preserving each party’s right to restrict such flows or impose data localisation requirements. Conversely, the Australia-UAE CEPA agreement prohibits parties from restricting or banning cross-border data flows or imposing data localisation requirements, subject only to public policy exceptions (Articles 12.16 and 12.19). Regardless of whether these commitments are enforceable or co‑operative in nature, the overall direction of the UAE’s treaty practice signals a clear intention to deepen digital co‑operation with Key Partners, while at the same time creating a more conducive environment for investment in digitally intensive sectors.
8.4.2. The UAE’s recent treaties highlight a trend towards incorporating skills development and labour-related commitments
The UAE’s treaty practice shows a growing trend for incorporating skills development and labour-related commitments between parties. As observed globally, the UAE’s stock of BITs includes few labour-related provisions that are limited in scope. For example, the India-UAE BIT, which came into effect in 2024, encourages investors to adopt corporate social responsibility practices to safeguard labour and human rights, while the Rwanda-UAE BIT, which came into effect in 2020, calls for parties to avoid relaxation of labour standards for the purposes of boosting trade or attracting investment. More recent CEPA agreements build on this foundation and introduce more clearly defined expectations, including in relation to skills development. In the UAE’s stock of agreements with digital-related provisions, three CEPA agreements (with New Zealand, Mauritius, and Serbia) include provisions on upskilling, encouraging parties to implement initiatives to develop the digital skills of policymakers and wider population. The New Zealand-UAE and Australia-UAE CEPAs include clauses for parties not to derogate from labour standards for the purposes of encouraging trade and investment.
These provisions are set out in dedicated trade and labour chapters and are not subject to dispute settlement, instead being implemented through co‑operative and consultative mechanisms, in line with the UAE’s policy preferences. Importantly, the Australia-UAE CEPA acknowledges the potential adverse effects of the digital economy on labour conditions, including risks associated with workplace surveillance, algorithmic decision making and gig work. Positively, agreements that are currently under negotiation (e.g. EU-UAE free trade agreement) show that the UAE is poised to continue integrating labour-related commitments in international trade and investment agreements. Such commitments can improve the capacity of foreign firms to deliver quality employment and in turn support long-term talent retention.
8.4.3. International instruments on responsible business conduct help raise labour standards and address risks associated with technological advancements
Enabling businesses to address challenges with emerging technologies
The MNE Guidelines and Due Diligence Guidance for RBC provide a comprehensive framework for businesses to address risks associated with the digital transformation or emerging digital technologies. Despite growing corporate efforts on RBC, many enterprises still focus narrowly on issues such as data protection or cybersecurity. Digital technologies such as AI systems can create wider risks to human rights, labour rights and the environment-ranging from algorithmic discrimination and intrusive surveillance to unsafe online environments and high energy consumption. The MNE Guidelines encourage a broader, system-wide approach to address risks that extend to all sectors adopting digital technologies and span the entire value chains. In addition, the OECD Due Diligence Guidance on RBC enables enterprises to identify, prevent and mitigate adverse impacts linked to their operations, products and business relationships. A forthcoming OECD Due Diligence Guidance for Responsible AI further supports companies in applying RBC principles to address emerging AI-specific challenges.
Advancing responsible business conduct in employment and industrial relations
The MNE Guidelines set expectations for enterprises to maintain responsible labour practices, emphasising respect for workers’ rights to organise, adherence to employment and industrial-relations standards that meet or exceed those offered by comparable employers, and the provision of fair wages, good working conditions, and robust occupational health and safety. The MNE Guidelines call on enterprises to employ and train local workers where possible, to give reasonable notice of operational changes that may affect employment, and to work with worker representatives and authorities to mitigate adverse impacts. In addition, the OECD Due Diligence Guidance for RBC provides a practical, risk-based framework to identify, prevent and address labour-related harms. Sector-specific due diligence guidance identifies the potential labour-related risks associated with the particular activities in which enterprises operate, including garment and footwear, extractive industries, or agriculture.
International instruments, such as the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (“MNE Guidelines”) and the accompanying Due Diligence Guidance for Responsible Business Conduct (RBC), provide guidance for enterprises to ensure that their business activities do not lead to adverse impacts to society and the environment (Box 8.2). For instance, the MNE Guidelines provide expectations for businesses to promote good industrial relations, quality jobs and a decent working environment (Chapter V). These practices can help ensure that enterprises create a positive work environment that reduces turnover and improves long-term talent retention. Technological advancements, such as AI, can also create challenges for businesses in relation to safeguarding human and labour rights and the environment. The MNE Guidelines emphasise that enterprises should conduct RBC due diligence to identify and account for risks through the entire technology value chain (Chapter IX) (OECD, 2023[26]). In the area of AI, for instance, conducting due diligence is increasingly important to help manage potential unfair practices related to employment, finance or access to public services (OECD, 2026[27]). Other sector-specific due diligence guidance provide more tailored recommendations for businesses to identify and manage risks along their supply chains (OECD, 2018[28]; 2017[29]; 2017[30]).
8.5.1. Improving the UAE’s competitiveness for FDI in the digital economy requires continued investment in basic and advanced digital skills
The UAE has set ambitious goals to attract FDI in digital-intensive sectors and nearly double the digital economy’s share of non-oil GDP over the next decade, but rising investment is also intensifying shortages in certain specialised skills. The UAE is seeking to become an economic hub for AI, and is amongst global competition to attract foreign AI professionals and meet growing demands (Figure 8.3). Yet demand for specialised digital skills continues to outpace supply as adoption accelerates. In Dubai, skills shortages in software and applications, data and AI and cybersecurity are likely to become more astute in the near future as adoption accelerates (Dubai Digital, 2024[32]). Employers are not only seeking advanced technical skills (e.g. AI and big data) to support the digital transformation, but also a set of soft and interpersonal capabilities, including analytical and creative thinking and technological literacy (WEF, 2025[33]). At the same time, the OECD Programme for International Student Assessment (PISA) shows that the UAE’s performance in mathematics, reading and science is below the OECD average (OECD, 2023[34]), which should be interpreted in the context of the UAE’s demographic composition and labour market dynamics. This underscores the importance of strengthening foundational skills to support future workforce needs.
The UAE has prioritised strengthening its domestic talent base while continuing efforts to attract foreign talent to meet emerging skills needs. The National Program for Coders aims to expand the UAE’s digital skills pipeline by attracting, training and upskilling 100 000 coders through international training initiatives and stronger links between talent, industry and universities. At the same time, the education system is being adapted to prepare young people and enable them to take advantage of opportunities generated by the digital economy. Cybersecurity and AI are being incorporated in pre‑tertiary curricula, and universities are expanding programmes in advanced digital fields, for instance with the establishment of the Mohamed bin Zayed University of Artificial Intelligence in Abu Dhabi. The digital capabilities of federal government officials are also being reinforced with the Jahiz initiative, which provides an interactive platform for self-paced trainings in AI, cloud computing and data analytics. In addition to generating skills demand, the digital transformation will create wider shifts in the labour market, and cause risks of job displacements, which will require reskilling programmes to mitigate for such effects. At the same time, the UAE’s ability to attract global digital talent and embed foreign firms into national upskilling initiatives can address emerging skills gaps in a dynamic and forward-looking manner.
Net migration flows of LinkedIn members with AI skills from 2021 to 2025
Note: Data for OECD Member countries Colombia and Japan are unavailable due to insufficient sample size and are excluded from group averages.
Source: OECD.AI (2026[35]), Between-country AI Skills Migration based on data from LinkedIn Economic Graph, https://oecd.ai/
Foreign firms have a noteworthy role in addressing skills shortages in the UAE’s digital economy. Recent years have featured many collaborations with foreign firms to implement digital skills programmes, often in partnership with the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office (Box 8.3). These programmes seek to advance AI literacy, applied digital skills, coding and data competencies, and machine learning capabilities, thereby expanding the domestic skills base. For instance, a recent partnership with Microsoft seeks develop 1 million AI talents in the UAE. However, such initiatives do not materialise automatically and may depend on active measures, for instance, to strengthen linkages between foreign firms and local educational establishments, or design policies that encourage foreign firms to invest in employee training. Existing initiatives demonstrate the UAE’s capacity to engage foreign firms in national upskilling programmes, and sustaining these efforts would contribute to covering emerging skills needs. Expanding workplace training in particular can also improve job satisfaction and talent retention, as lack of skills development and career advancement pathways can drive workers to switch jobs and aggravate turnover (OECD, 2023[25]).
Google’s “AI for All” initiative
The “AI for All” initiative, launched by Google in partnership with the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office, is planned to deliver AI-literacy and digital-skills training in 2026 to a defined set of target groups, including students, teachers, government employees, creators and small and medium-sized enterprises (SMEs). The programme offers modules on AI fundamentals, practical applications, responsible use and prompt engineering, as well as tailored content for SMEs on applying AI to improve business processes. It also includes an awareness component designed to support uptake of training opportunities.
Microsoft’s Elevate UAE programme
Microsoft Elevate UAE initiative is a large‑scale public-private partnership designed to strengthen the UAE’s digital and AI talent base. The programme aims to train more than 250 000 students, faculty and academic staff, alongside over 55 000 federal government employees, equipping them with practical AI competencies and industry-recognised credentials. Delivered in collaboration with other stakeholders (e.g. schools, universities and non-profit organisations), the Elevate UAE initiative provides AI-literacy and applied digital-skills courses in schools and universities, while also providing tailored modules for public-sector officials through partnerships with entities such as G42 and the federal JAHIZ platform.
Samsung’s Innovation Campus
Samsung Innovation Campus programme, delivered in partnership with the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Office. The initiative offers virtual training for young people with STEM prerequisites on foundational and applied digital competencies such as Python programming, data analysis, machine learning and deep learning. Samsung also contributes to wider national digital literacy efforts through participation in events such as UAE Codes, where it delivers practical AI and coding sessions to strengthen exposure to emerging technologies. These activities expand access to hands-on digital-skills development opportunities and complement broader government efforts to expand the skills base.
8.5.2. Skill anticipation systems enable the UAE to respond to emerging skills needs and maintain its attractiveness as a talent-rich investment destination
Effective skills anticipation systems help align education and training programmes with the evolving skills needs of the labour market. Currently, the UAE is developing a more integrated skills anticipation system to identify skills gaps by combining data from LinkedIn job postings, employment contract records maintained by the Ministry of Human Resources and Emiratisation, and business surveys. This data is matched these against an inventory of university programmes and their embedded skills to identify mismatches or skills gaps. Reforms in higher education governance reinforce this approach. A new Outcome‑Based Assessment Framework shifts institutional evaluation from inputs (e.g. resources) toward measurable outputs, based on a set of KPIs assessing employment outcomes, learning quality, research strength, industry collaboration, reputation, and community engagement (Commission for Academic Accreditation, 2025[39]). The framework encourages education institutions to strengthen industry collaboration through several means, including by incorporating employer input into curriculum design, offering work-based learning opportunities such as internships, embedding professional certifications into programmes, and involving external stakeholders in the assessment of learning outcomes. Skills anticipation systems that incorporate the input of foreign firms can further reduce the gap between available data and the evolving skills needs linked to FDI. Since FDI decisions often reflect forward-looking labour market trends, their involvement can help anticipate future skill demands more effectively (OECD, 2022[5]).
8.6.1. Greater transparency could help firms to better identify available support for digital activities and labour market outcomes
The UAE’s fiscal policy has evolved significantly in recent years, shifting away from a long-standing 0% tax model.1 In 2023, the UAE introduced a corporate income tax (CIT) standard rate of 9%, with possible reductions and exemptions to encourage investment in certain sectors. These changes to the fiscal landscape form part of a broader wave of tax reforms across the GCC, driven by efforts to diversify economies and reduce reliance on hydrocarbon revenues (Baum, Nampewo and Polo, 2025[40]).
While the UAE’s tax system continues to evolve, investors must also navigate an investment incentive landscape that varies between and within Emirates. In Abu Dhabi, for example, investment authorities apply a cluster‑based model in which benefits are linked to firms’ performance against defined criteria. Incentive regimes also differ across the country’s free zones. Specialised zones, including Dubai Internet City, Dubai Silicon Oasis, ADGM and Masdar City, offer tailored packages to attract firms in software development, digital services, cybersecurity and AI. These combine favourable tax treatment with targeted non‑fiscal benefits such as streamlined licensing, regulatory sandboxes, dedicated digital infrastructure and IP support. With around 40 free zones nationwide, the incentive landscape is highly diversified and would benefit from greater consolidation and transparency of information to help investors more easily assess investment opportunities and access benefits.
The UAE, through MoI, may help address such information asymmetries by consolidating information on available incentives in a portal that allows investors to explore available benefits per sector or geographic location. While the InvestUAE portal displays the sectoral strengths of each Emirate, the site currently lacks more granular data on incentives, such as the eligibility criteria, level of benefits, and information on the application process. Other economies offer examples for implementing such initiatives, including Mauritius and the United States, by either creating an interactive platform to explore incentives or publishing guides for specific incentive schemes for investors (Box 8.4).
The effectiveness of incentives is not only determined by their accessibility. Incentives require a robust monitoring and evaluation framework to determine whether the instruments achieve their intended objectives and at what cost. Assessments should also consider how incentives contribute to broader policy goals, such as reducing inequality or advancing environmental targets (OECD, forthcoming[41]). For instance, firms in the UAE that hire nationals and meet their Emiratisation quotas can access a range of benefits, including salary support schemes, grants for on-the‑job employee training, and improved access to government contracts (ETCC, 2025[42]). However, many firms are still reporting difficulties in meeting their Emiratisation quotas (Business Sweden, 2025[22]), suggesting more significant underlying barriers such as skill mismatches, recruitment difficulties, or persistent preference among nationals for employment in the public sector. Systematically assessing the costs and impact of these incentives is essential to understanding whether they meaningfully increase national employment in the private sector in the long run or whether alternative policy measures offer more effective or efficient pathways to the same outcomes.
Target Industries Dashboard, SelectUSA
The Target Industries Dashboard was developed by SelectUSA to consolidate information on all incentives offered by US states, in addition to ones administered at the federal level. The tool provides an interactive overview of US states and territories where specific industries are prioritised. It also offers direct access to state fact sheets and sector-specific incentives, ensuring that investors have the necessary information to make informed decisions. To further support investors in navigating the incentive framework, SelectUSA has also developed the state business incentive database, a comprehensive resource offering detailed information on incentive programmes across all 50 states. The database currently includes information on 2 566 programmes, covering programme objectives, eligibility criteria, and descriptions of available benefits.
Incentive‑specific guides, Mauritius Economic Development Board
The Economic Development Board (EDB), Mauritius’ apex investment promotion agency, provides an up-to-date investor guide that outlines available investment incentives on the government homepage. In addition to this broader resource, EDB publishes incentive‑specific guides that detail the level of benefits, eligibility criteria, and legal basis of individual incentive schemes. Investors seeking to familiarise themselves with Mauritius’ incentive framework can navigate the EDB homepage and explore the incentives available per economic sector, thereby simplifying their investment decisions and ensuring a more equitable playing field for investors of all sizes.
Source: C2ER (2025[43]), State Business Incentives Database, https://www.stateincentives.org/; SelectUSA (2025[44]) Target Industries Dashboard, https://www.trade.gov/selectusa-target-industries-dashboard; and EDB (2025[45]), Investment Guide, https://edbmauritius.org/investment-guide
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← 1. Prior to the introduction of a broader CIT rate, the oil and gas sector and foreign banks were – and continue to be – subject to the taxation rules of Emirate‑level authorities.