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The Heritage Foundation’s annual assessment evaluated 184 economies across four main pillars of rule of law, government size, regulatory efficiency and market openness using data compiled as of January 2026. The UAE improved its score by 0.3 points from the previous edition to reach 71.9, securing first position among 14 countries in the Middle East and North Africa region. The report classified the UAE economy as mostly free, citing efforts to strengthen the business climate, boost investment and foster a vibrant private sector.
Government size indicators delivered some of the strongest results for the UAE, according to The Heritage Foundation figures that gave the country a tax burden score of 99.9 and fiscal health rating of 97.6. Both individual and corporate income tax rates stand at zero percent while three-year government spending averaged 22.3 percent of GDP and the budget balance showed a surplus of 7.3 percent, the index data showed. Public debt stood at 34.9 percent of GDP, supporting the overall positive evaluation in this category.
Regulatory efficiency metrics highlighted streamlined procedures with no minimum capital required to establish a business and licensing processes simplified, The Heritage Foundation assessment found. Business freedom scored 84.5 while monetary freedom reached 81.2, reflecting sound policies that sustain economic momentum. Areas for improvement include judicial effectiveness, which registered 34.4 and fell below the world average, alongside investment freedom at 50.
Open trade policies and a competitive modern financial sector further bolstered the UAE’s standing, the report stated, with trade freedom at 78.6 and financial freedom at 60. The assessment noted that the generally open trade regime has helped maintain growth despite global challenges while property rights scored 62.9 and government integrity 65.3, both above world averages. These elements have enabled the country to sustain its position as the leading Arab economy in the index for multiple consecutive years.
Across the wider GCC, the average economic freedom score reached 66.9 in 2026, exceeding the global average by almost seven points, according to the GCC Statistical Centre. All member states recorded either gains or stability in their scores between 2025 and 2026 with limited variation among them, the centre’s analysis showed. The UAE held the highest global rank within the GCC at 23rd while other members such as Qatar, Oman and Bahrain followed closely in regional standings.
The index results align with broader economic indicators that include real GDP growth of 4.8 percent in 2025 and per capita GDP at $84,403, separate official data indicated. Unemployment remained low at 2.2 percent with inflation at 1.7 percent, reinforcing the foundations that underpin the high economic freedom ranking. The Heritage Foundation noted that such performance reflects continued reforms aimed at enhancing competitiveness and attracting foreign direct investment.
