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Electricity, telephone services, and an airport were established in Dubai in the 1950s and, in 1959, the emirate's first hotel, the Airlines Hotel, was constructed.
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Dubai's geographical proximity to Iran made it an important trade location.
The town of Dubai was an important port of call for foreign tradesmen, chiefly those from Iran, many of whom eventually settled in the town.
Abu Dhabi and Dubai are the only two emirates to have veto power over critical matters of national importance in the country's legislature.
It is also a major transport hub for passengers and cargo.
However, the town's geographical location continued to attract traders and merchants from around the region.
The emir of Dubai was keen to attract foreign traders and lowered trade tax brackets, which lured traders away from Sharjah and Bandar Lengeh, the region's main trade hubs at the time.
In 1947, a border dispute between Dubai and Abu Dhabi on the northern sector of their mutual border escalated into war.