The United Arab Emirates (UAE), once totally reliant on oil revenues, is rapidly diversifying its economy. UAE's recent economic growth was based on a business-friendly environment, in which the burden of government regulation is low and services are provided efficiently, attracting substantial inflows of foreign investment. The result was an increasing service sector and a construction boom. The financial crisis has popped the construction bubble, and corruption cases are slowing starting to come to light. Several high-profile scandals have demonstrated a need for stricter controls on the higher echelons of both public and private sectors. These scandals confirm observations of the UAE having an opaque business climate and have prompted the government to accelerate its ongoing efforts to enhance transparency. On the other hand, episodes of petty corruption are reportedly uncommon.

Positive developments in relation to corruption and investment:

• High-ranking Dubai police officials report of a very low number of bribery cases.
• The government has made some efforts to improve UAE's reputation of lack of transparency, and in a September 2009 interview the Sheik of Dubai reiterated that his government will fight corruption and close loopholes that allow for corrupt practices to occur.
• The procedures to get an operating licence are straightforward and publicly available in all emirates.
• Anti-corruption and anti-fraud legislation is evenly enforced, thus providing a strong deterrent to future illegal acts.

Risks of corruption:

• Information on business-related corruption in the United Arab Emirates is scarce, making an accurate estimation of the extent of corruption very difficult.
• In the wake of the financial crisis, several high-profile cases of corruption have been detected.
• A number of real estate and financial companies, government owned Nakheel being the most prominent, are under investigation, and AED several billion have reportedly been defrauded, embezzled or used as bribe money.
• Market competition in the UAE has to be improved, as foreign companies still have to rely on local sponsorship if they want to succeed in their business. Moreover ruling families' involvement in the economy provides for an uneven playing field.
• There is no civil society organisation working with anti-corruption in the UAE and there is a great scarcity of reports on the issue.