My, my welcome to Dubai! With the World Insurance Forum (WIF) convened there for the first time, interest and eyes are turned eastward to this up and coming component of the Middle East world.

Dubai is actually one of seven Middle Eastern federation of states situated in the southeast of the Arabian Peninsula in Southwest Asia on the Persian Gulf, bordering Oman and Saudi Arabia. The seven states, termed emirates, are Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. The UAE, rich in oil and natural gas, has become highly prosperous after gaining foreign direct investment funding in the 1970s.

Not as fortunate as the rest of the UAE with an estimated 100 years' oil reserves, Dubai will run out of oil within two decades, possibly as early as 2016. And because of that it is gearing itself at a staggeringly rapid pace for alternative industries.

Sheikh Mohammed bin Rashid al-Maktoum, prime minister of the United Arab Emirates and ruler of Dubai, has envisioned for years to develop his country into a world-class financial centre. Backed by the still gushing oil taps and insatiable global oil consumption trends, Dubai has very real, very large liquid surplus (pardon the pun) in resources to make this vision a reality. Indeed, with two financial exchanges, the implementation of the Free-Trading zone, gloriously ambitious development projects that are so architecturally significant in reclaiming land from the sea (Palm Island Jumeirah, The World and others); this country is attracting serious attention and cash inflows. And not just from tourists.

'The Informed Comment' blog by Juan Cole notes that Dubai, more so than any other of the emirates in the UAE, has undergone a dramatic transformation. In 2006, it made more money from tourism than it did from oil, what with good weather, a more tolerant attitude to alcohol consumption, fine restaurants, luxury hotels and massive shopping malls. The Mall of the Emirates boasts what it claims to be the largest mall outside of North America, and includes the only artificial ski resort in the Middle East.

Market conditions world-wide could not be better for this vision right now, what with all the super-rich non-doms moving their wealth generation business out of London after Her Majesty's Revenue & Customs decided to level the playing field. When will taxing authorities understand that they can never achieve tax parity among the super-wealthy, not with the ease that global citizens can migrate from one place to another — fluidly just like wealth-generating oil?

Abu Dubai sits on one of the largest sovereign wealth funds in the world, almost a trillion dollars standing ready at any time for potentially viable investment partners. This pot of oily gold has to have a lure in and of itself for all those companies looking for recapitalisation after losses from derivatives and sub-prime loss strategies.

US markets and financial institutions are still shopping for Prince Charming's help to keep the magic chariots afloat. Actively seeking to sell equity for liquidity infusions, Middle Eastern sovereign wealth funds have been placing significant investment capital into the United States, in a sort of turn about using proceeds of the 'West's own excess oil consumption to buy onto Western balance sheets'.

Middle East monetary union. The six Gulf Cooperation Council States are working on a long-term plan to form a monetary union with a single currency, much like Europe accomplished with the euro. Marketing efforts and partnerships have increased the number of stock exchanges and their reach, along with numerous initial public offerings (IPO's).

Development. Dubai and others in the UAE and elsewhere are on a perpetual campaign to encourage Western investment, partnerships and ventures. More than 43 million people came to this region last year. Two more airports are on the drawing board to accommodate future traffic flows.

The Fairmont hotel chain is building not one, but six new hotels. Golf courses are sprouting in the dessert. Who has not heard of the Dubai Classic with a winner's purse in excess of $1 million, The Palm and World islands, as well as other developments that are attracting interest and investments, oversold before construction even commences.

Give me your skilled, your highly qualified. With business and economy booming, skilled workers are in very short supply. One blog site listed recently six new HR consulting firms from the UK moving in, to help take care of demand.

With a small native working population, Dubai faces many of the same issues of other financial centres, not enough qualified Emiraties to fill the demand and a disincentive to work Western style hours. Emiraties receive generous annual stipends given from long tribal tradition.

Work permits are standard three years (and renewable for three-year terms). Jobs are offered to Emiraties first, if qualified and available. Spouses of work permit holders can work, under their own or sponsor's permit. There is no quota system. Initial permit applications are made by the employer, then renewals are done online in a 15-minute Internet process.

Visa ease. For the citizens of most western countries, including those of Australia, New Zealand, and the Vatican City, visas can be obtained after you step off the plane. I wonder how many from the Holy City actually work in UAE?

Education incentives. Seeking to continually upgrade the local citzenry's access to qualified positions and wanting to utilise the intellectual capacity of both male and female workforce, Sheikh Mohammed bin Rashid contributed $10 billion, from his personal assets, to set up an educational foundation to improve the standard of education and research in the region, and stimulate job creation.

Driver's licences are easy to obtain, as well as owning a car.

Wages are significantly higher than like kind jurisdictions, but inflation, as high as seven percent to 10 percent, is rampant and a constant concern, judging from comments in news media.

Crime and culture. Significant crime is still fairly negligible, possibly due to sterner laws, punishments and longer sentences than in the West. This is a conservative society that does not tolerate easy social or sexual mores, from its citizens or expatriate workers.

Modesty is key, particularly with women. No tattoos and excess skin exposure allowed. But, in a double take, the entertainment internet indicated that Britney Spears is being paid £4 million to come and visit. The gentle advisement seems to be: don't leave the free zone, don't stare at women, don't be a Spitzer emulator — none of which seems to be particularly difficult to adhere to.

Taxes. The UAE (United Arab Emirates) has no income tax, capital gains tax imposed as part of regular business profits, little or no corporate tax, no net worth tax, estate or gift tax. Additionally, no social insurance taxes are levied upon expatriate guest workers.

All evidential commentary indicates that Sheikh Mohammed bin Rashid is an energetic intuitive global thinker and visionary, focused to the future when the dynamics of the idle west and the Far East will be significantly different. Dubai will succeed because it is tapping into the new global economy—which consists of a lot of wealthy, highly mobile people.

Just a couple of small detractions and concerns. Right across the Arabian Gulf, about 100 miles or so, is Iran, with its uranium-enriching programme, and also one of UAE's biggest trading partners.

And then there is the earthquake activity effect from the The Dibba Earthquake Fault line, which is connected to the Zagros Fault, a major fault on the opposite side of the Arabian Gulf in Iran.

Sources: Wickipedia, Gulfnews, Arabianbusiness, Dubai online, Ernst & Young The Global Executive 2007

Martha Harris Myron CPA -NH1929, CFP® -67184 (US licenses) TEP - Society of Trust and Estate Practitioners. She is a Senior Wealth Manager at Argus Financial Limited, specializing in comprehensive financial solutions and investment advisory services for individual private clients and their families, business owners, endowments and trusts. DirectLine: 294 5709 Confidential email can be directed to mmyron@argusfinancial.bm

The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.