Direct Influence:
To encourage continued economic growth, the UAE is in the midst of a 20-year economic diversification plan.  Historically, the UAE has relied on its massive oil reserves to financially support investments.  The government has allotted $13.4 billion toward the development of the non-oil sector, much of which will be spent on telecommunications and information technology. 

Numerous policies exist that have encouraged foreign investment in the UAE. For example, it is relatively easy to get a visa, residence permit, and a work permit.  U.S. citizens are eligible for 10-year, multiple entry visas.  Most country's citizens, with the exception of Israel, can invest in the UAE. 

Along these lines, the government is concerned about the ratio of non-nationals to nationals.  Although visas are given fairly easily, the government is very sensitive about the expatriate labor force.  In 1996, almost 200,000 expatriates without valid visas were expelled (37).  It is interesting to note that other members of the Gulf Cooperation Council (Oman, Yemen, Qatar, Saudi Arabia, and Bahrain) and British citizens are the only ones that can enter the UAE freely without visas.  This provides a definite advantage to citizens of the GCC and the United Kingdom.

Furthermore, there is no restriction on the transfer of funds into or out of the UAE. Customs regulations are minimal, which is also an enticement to foreign firms.  A flat rate of 4 percent on imported goods is levied, unless they are being sold directly to the government in which case the transaction is tax-free. No exchange controls or restrictions on repatriation of profits in the UAE are in place.  This is very significant because with foreign direct investment inflows comes increased technology, as well as increased technology demands.