A guide to world cities: The desert city that's come of age

Two stock exchanges, a media city and 100,000 British expats: the transformation of Dubai from a sleepy outpost into a monolithic, and
immensely wealthy, desert city has brought with it much more than horseracing and tax-free shopping. Ben Flanigan reports from Dubai

Dubai is good at challenging people's assumptions. The largest city in the United Arab Emirates, seems - in many people's minds - to have sprung up out of the desert some time in the last two decades. But the city and its surroundings have a much longer history. Islamic settlers arrived there in the 7th century and the city's role as a trading outpost grew as it made contact with European pearlers and trading ships. Yet it wasn't until the discovery of oil in the UAE and the precocious growth of Dubai from the 1970s onwards that the world's business community really sat up and took notice.

But this has led to one of the common misconceptions, namely that the emirate, located just across from Iran on the Arabian Gulf, is rich in oil; it now contributes less than 10 per cent of GDP. Big brother Abu Dhabi, the UAE capital, is certainly not short of it, but Dubai is making its mark in other ways. Tourism and real estate are the keys to the economy. Dubai is home to the distinctive 'seven-star' Burj al Arab hotel and the Burj Dubai (which will be the world's tallest building).

Last year, Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum announced ambitious plans to maintain double-digit economic growth and achieve a GDP of $108bn by 2015. International business has embraced this ambition: more than a quarter of the Fortune 500 global firms have chosen Dubai as their regional headquarters meaning that more business travellers are visiting the emirate than ever before.

Such frenetic activity means two things for those doing business in Dubai. First, it's a place of great opportunity, with high, tax-free salaries for those choosing to relocate there permanently - something more than 100,000 Brits have chosen to do.

However, it can be a place of frustration for some: a recent World Bank report on the "ease of doing business", for example, ranked the UAE at 68th position worldwide.

Again, though, Dubai is impossible to ignore. The emirate has made a number of high-profile investments over recent years, from its stakes in EADS and the Tussauds group to the controversial purchase of P&O. Dubai World,
one of the state-owned holding companies, bought the QE2 for £50m last year.

Yet despite a few 'trophy' investments, the emirate's state conglomerates and sovereign wealth funds are deeply rational in their international acquisitions: it's not all about Dubai "bling". In January 2006, the government-owned Dubai International Capital (DIC) pulled out of a bid for Liverpool FC: despite its CEO professing devotion to the club, DIC would not overpay.

And Dubai's quest to play the game of global stock exchange consolidation has proved it can be canny in negotiation with the world's heavyweights. Last year it emerged that Borse Dubai - the holding company for the emirate's two stock exchanges - was to make a bid for OMX, the Scandinavian exchange operator. Nasdaq was also bidding for OMX, and the Dubai announcement saw a great deal of cross-briefing by the Arab and American contenders.

However, a few weeks later, it emerged that Borse Dubai - headed by the respected Essa Kazim - had agreed a convoluted deal with Nasdaq that would leave the US operator in control of OMX, but give Dubai a stake in the London Stock Exchange and Nasdaq itself. The Dubai International Financial Exchange (DIFX) - one of the emirate's two stock exchanges, along with the Dubai Financial Market (DFM) - will be rebranded 'Nasdaq DIFX' later this year.

Against this background, it is easy to see what attracts business travellers to Dubai. Before visiting the city, however, one should consult a map to see where meetings will be based: travelling around the city is difficult due to the horrendous traffic, as Dubai's infrastructure struggles to keep pace with the quickly growing population.

The city has three main business areas. The first, and oldest, is Deira on the north-east side of the Creek that divides Dubai. Some of the local banks have their headquarters in this area, although there is not a great presence of international businesses.

Sheikh Zayed Road and, just behind it, the DFM and the Dubai International Finance Centre (home to the DIFX) is perhaps more symbolic of the emirate's lofty ambitions. Sheikh Mohammed's executive office is based in the distinctive Emirates Towers; the exclusive meeting room at the top of the Shangri La hotel - also on Sheikh Zayed Road - is where many high-profile business deals are done.

New Dubai is the third district of interest. It is home to the Dubai Marina, a wall of high-rise apartment blocks, and business 'free zones' such as Dubai Media City. Many international companies choose to locate within 'free zones', which allow businesses to operate without having a local partner, and have more liberal visa laws. However, office rents can be high, and many businesses choose to register in these zones but have their main offices elsewhere.

But high rents are not deterring big businesses from moving to Dubai, which - in an otherwise unstable region - offers great access to markets, in a safe environment. It is a city that no longer needs to court attention: as Sheikh Mohammed is alleged to have said: "I would like to tell capitalists that Dubai does not need investors: investors need Dubai."


Sleeping

With more than 50,000 hotel rooms to choose from, visitors to Dubai are spoilt for choice with the range of accommodation on offer. Budget-friendly hotels can be basic but clean and will soon include the first hotel in the region from Stelios's easyHotel brand, due to open this year. But for business travellers with more generous expense accounts, Dubai certainly has a lot at the more luxurious end of the spectrum. Take the 'seven-star' Burj al Arab, where the most expensive suite costs £14,000 a night. Top range sea-fronted hotels include the Jumeirah Beach Hotel and Le Royal Meridien Beach Resort & Spa, recently voted the World's Leading Beach Resort at the 2007 World Travel Awards. Travellers visiting the Dubai International Convention and Exhibition Centre will find the Novotel and Ibis conveniently situated close to the site. For easy access to the DIFC and the World Trade Centre, the stunning Emirates Towers Hotel is sandwiched between these two commercial hubs.


Nightlife and sports

Nightlife and fine dining options are plentiful, with well-known chefs setting up restaurants to cater for the increasing demand from wealthy clientele. The Grosvenor House Hotel is home to Gary Rhodes's Mezzanine, as well as Buddha Bar, the only outpost of the trendy Parisian hangout. Other celebrity offerings include Gordon Ramsey's Verre, and Frankie's, a sophisticated Italian restaurant recently launched by Frankie Dettori and Marco Pierre White. Unlicensed restaurants can be found all over Dubai and often offer great value for money in specialist cuisine from Lebanon and Asia. At Al Hallab in Garhoud - close to the airport - diners can feast on delicious, low-priced food and soak up the friendly atmosphere. Socialising Dubai-style doesn't just take place at night and the city has a range of crowd-drawing sporting events. Horse racing is a popular pastime in the region, and the Dubai World Cup is the highlight of the calendar. Well-dressed 'punters' can show off their attire while experiencing the world's richest day of racing with $6m in prize money, despite gambling being prohibited. Golf also has a big following in Dubai with the Dubai Gold Cup attracting big name competitors every year. In a city that is really building its reputation in the game, Colin Montgomerie, Greg Norman and Tiger Woods have all put their names to courses.


Essential etiquette

The UAE is one of the most liberal Muslim countries, and Dubai is more tolerant still in comparison with its neighbouring emirates Abu Dhabi and, especially, Sharjah.

However, travellers should still consider certain sensitivities. Do not eat pork in front of a Muslim dinner guest; it is illegal for Muslims to drink, but alcohol is available in hotels and is sometimes appropriate for business events. Also, avoid arranging meetings on Fridays, the Muslim day of prayer and rest.

During the holy month of Ramadan, you must not be seen eating, drinking or smoking in public during daylight hours. However, this rule does not apply in some closed-off sections of restaurants and hotels. Dress formally when on business. Men should wear a suit and usually a tie. Women should dress conservatively, especially during Ramadan. Foreigners should not adopt the native dress. Gushing compliments go down well, as do enquiries about family, although do not ask a man specifically about his wife or daughter. Suitable smalltalk includes joking about the weather or Dubai's notoriously bad traffic.


Language

Arabic is the official language but most businesspeople speak English. However, the use of a few Arabic phrases will be greatly appreciated by locals.

Hello al salaam a'Laykum / marhaba
Hello (reply) wa alaykum al salaam
Goodbye ma salaama
Do you speak English? tatakalam Inglesi?
I don't understand kaif?
My name is... ismee
Yes na,am, aiwa
No la
Thank you shukran


Top tips

Currency: £1 = around 7.2 UAE dirhams.
Retail therapy: Dubai's malls are home to big names such as Saks Fifth Avenue and Harvey Nichols. For more traditional shopping, spend time wandering around the spice souk and barter for a bargain on jewellery at the gold souk.
Time zone: Dubai is GMT +4 hours in winter and GMT +3 hours in summer
Media: Emirates Business is the UAE's dedicated business newspaper (www.business24-7.ae).
Climate: Dubai has an arid subtropical climate and in winter temperatures are pleasant with average highs of 24C. In summer the humidity and high temperatures, averaging 41C, can make it difficult to venture away from air-conditioning for too long.
Getting there: Emirates flies to Dubai from six UK destinations. On arrival UK citizens receive a visa for 60 days.
Phones: The international dialling code for Dubai is +971. Most UK mobiles will pick up the local networks Etisalat or du, but check with your mobile provider for range and costs.