On 8 January 1820, the sheikh of Dubai was a signatory to the British sponsored "General Treaty of Peace" (the General Maritime Treaty).

In 1833, the Al Maktoum dynasty of the Bani Yas tribe left the settlement of Abu Dhabi and took over the town of Dubai, "without resistance". From that point on, Dubai, a newly independent emirate, was constantly at odds with the emirate of Abu Dhabi. An attempt by the Qawasim pirates to take over Dubai was thwarted. In 1835, Dubai and the rest of the Trucial States signed a maritime truce with Britain and a "Perpetual Maritime Truce" about two decades later. Dubai came under the protection of the United Kingdom (keeping out the Ottoman Turks) by the Exclusive Agreement of 1892. Like four of its neighbours, Abu Dhabi, Ras al-Khaimah, Sharjah and Umm al-Qaiwain, its position on the route to India made it an important location.

In March 1892, the Trucial States (or Trucial Oman) were created.

The rulers of Dubai fostered trade and commerce, unlike the town's neighbors. The town of Dubai was an important port of call for foreign tradesmen (chiefly Indians), who settled in the town. Until the 1930s, the town was known for its pearl exports.

After the devaluation of the Gulf Rupee in 1966, Dubai joined the newly independent state of Qatar to set up a new monetary unit, the Qatar/Dubai riyal. Oil was discovered 120 kilometres off the coast of Dubai, after which the town granted oil concessions.

On 2 December 1971 Dubai, together with Abu Dhabi and five other emirates, formed the United Arab Emirates after former protector Britain left the Persian Gulf in 1971. In 1973, Dubai joined the other emirates to adopt a single, uniform currency: the UAE dirham.

Dubai is unusual in that its population comprises mainly expatriates, with UAE nationals (Emiratis) constituting the minority. The vast majority of these expatriates come from South Asia and South East Asia. A quarter of the population reportedly trace their origins to neighboring Iran.[3] The UAE government does not allow any form of naturalization or permanent residence to expatriates.

Nearly all of the commercial establishments are run by expatriates with a silent local partner who merely "rents" the business license for a negotiated annual fee without taking part in any capital investment. The numerous free trade zones allow for full expatriate ownership.

There is an increasing number of "freehold" villas and flats on artificial islands such as the Palm Islands. The "lease" on these freehold properties was first offered for 99 years but was later changed to permanent ownership. Ownership or lease does not guarantee any form of legal residency status in the UAE. The Federal Government is still formulating laws pertaining to ownership of property and considering issuing residency status to those who own such property.

Language and religion

The official language is Arabic, but English and Urdu are also widely spoken, along with Hindi, Persian, Punjabi, Malayalam, and Tagalog. Islam is the official religion of all of the emirates. A vast majority of the locals are Sunnis. There are foreign minority Hindus, Sikhs, and Christians as well. Dubai is the only emirate that has Hindu temples and a Sikh gurudwara.