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Data Centers in United Arab Emirates

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Explore Markets in United Arab Emirates

United Arab Emirates – The Digital Nexus of the Middle East

Executive Summary

The United Arab Emirates is the premier choice for organizations requiring high-performance infrastructure to serve the Gulf and broader Middle East. Rapid investment in subsea cables and local cloud regions makes it a critical location for reducing latency and capturing regional revenue.

United Arab Emirates: At A Glance

FactorRating / DataNotes
Global Connectivity GradeBStrong international links via major subsea cable landings.
Direct Cloud On-RampsOver 7 – as of September 2025Access to AWS, Microsoft Azure, Alibaba Cloud, and Oracle Cloud.
Power Cost$0.03/kWh – as of September 2025Competitive pricing supported by gas, nuclear, and solar.
Disaster RiskLow (2.1/10) – as of September 2025Very low overall risk class for physical infrastructure.
Tax IncentivesNo – as of September 2025No specific digital or data center tax incentives currently active.
Sales Tax5% VAT – as of September 2025Based on the standard national value-added tax rate.

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: Carrier count: over 29 (as of September 2025). The market features a healthy mix of local incumbents and international providers, ensuring competitive transit and diverse routing options.

Direct Cloud On-Ramps: Over 7, enabling access to 5 cloud regions (as of September 2025). Localized access is available for AWS, Microsoft Azure, Alibaba Cloud, and Oracle Cloud, allowing for low-latency hybrid cloud architectures.

Internet Exchange Points (IXPs): UAE-IX in Dubai acts as the primary neutral peering point, drastically reducing the need for regional traffic to trombone through Europe.

Bare Metal: High-performance hardware is available through reliable global providers such as Hivelocity and Latitude.sh, supporting rapid deployment without the capital expenditure of traditional colocation.

Power Analysis

Average Cost Of Power: Industrial electricity is approximately $0.03/kWh (as of September 2025). These rates are among the most competitive globally, providing a significant operational advantage for power-hungry AI and high-density compute workloads.

Power Grid Reliability: The grid is well-engineered and relies on a redundant mix of natural gas, a growing nuclear program, and massive solar investments. Facilities in major corridors typically benefit from multi-substation support to maintain high uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are concentrated near the commercial centers of Dubai and Abu Dhabi. This proximity allows for single-digit millisecond latency to the financial services, logistics, and energy sectors that drive the regional economy.

Regional Market Reach: The UAE serves as a gateway to the Gulf Cooperation Council (GCC) countries and East Africa. It is the logical jumping-off point for any enterprise looking to reach over 300 million people across the region.

Tax Advantage For Data Centers: The primary benefit for operators is the low 5% VAT rate and the lack of corporate income tax for many companies operating within specific free zones. This provides a stable and predictable financial environment for long-term infrastructure investment.

Natural Disaster Risk

The United Arab Emirates carries an overall risk rating of Low (2.1/10) (as of September 2025). The environment is stable for mission-critical infrastructure, with most hazards being environmental rather than geological.

  • Coastal Flood (8.4/10): This is a regional risk primarily affecting low-lying coastal areas; many facilities are purpose-built to mitigate this.
  • Tsunami (6.0/10): Identified as an indirect regional risk for coastal developments.
  • Epidemic (5.2/10): A moderate rating reflecting national preparedness levels.
  • Drought (5.0/10): A consistent factor for the region, managed through advanced cooling and water management systems.

Other natural hazards, such as earthquakes (0.1) and tropical cyclones (0.4), are considered minor or negligible for this market.

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