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  • Detained in Dubai

Investor beware: Israelis face unique risks in the UAE

The rules are rigged – what's earned in the UAE is likely to stay in the UAE – and the more successful you are, the higher the risk

Radha Stirling, CEO and founder of Detained in Dubai

In the old story from the Arabian Nights, Ali Baba discovers a cave full of stolen treasure which can only be accessed by uttering a magic phrase. One needs the magic phrase to exit the cave as well, but, as the story goes, in the throes of greed and excitement over the treasures, people are prone to forget it, and they end up getting killed by the thieves.

Israelis might want to bear this story in mind as the United Arab Emirates opens up to them with the magic words of the Abraham Accords. From an investor’s point of view, it is indeed a treasure trove of opportunity, immense wealth, and untapped potential. Like the character in the fable, however, many foreign investors become heady with the often-easy success they achieve in Dubai. They forget that they are in a highly dangerous place where exits can abruptly close, and they can find themselves trapped.

I and my organization have become known for representing foreigners in the UAE who ran afoul of local customs, detained over minor infractions like alcohol consumption, taking snapshots at the wrong place, kissing in public, and so on. But, by far the greatest proportion of cases we handle involve business and financial disputes between foreign investors and local partners. The former types of cases reveal how easy it is to be arrested and prosecuted in the UAE on the basis of frivolous allegations; the latter reveal just how such a capricious legal system can be utilized against foreigners for predatory purposes to disastrous effect.

A former senior adviser to one of the Emirati rulers told me in no uncertain terms that the attitude of the government is that “any money invested in the UAE, any money earned in the UAE, belongs to the UAE,” and the justice system is designed to ensure that this principle is upheld. Tens of thousands of Israelis are already flocking to Dubai, both as tourists and as professionals and investors looking to start new projects, careers, and to set up new lives. I fear they are rushing in with the naïve expectation that as long as they follow the rules, there’s no risk; but the rules are rigged.

It is counter-intuitive, yet the more successful you are in the Emirates, the more vulnerable you become. Multimillion-dollar companies built up from nothing by foreigners are routinely appropriated by locals with the full complicity of the courts. False allegations, forged evidence, forced confessions, and a legal system overwhelmingly biased in favor of Emiratis, leave