Dubai an Investment Hot Spot

It's sizzling in Dubai. And we're not just talking about the summer temperatures, which generally range between 113 degrees and 122 degrees Fahrenheit.

Global investment banks like Citigroup(C) and UBS(UBS) are hot to set up shop in the Middle Eastern nation of Dubai, located in the United Arab Emirates. Although Dubai has a population of just over a million people, it has emerged as a trading hub for a region now swimming in petrodollars.

Meanwhile, as the planet's biggest banks jockey for position in the tiny desert kingdom, Dubai's government is investing beyond its own borders in a big way. The Borse Dubai, the government-controlled exchange, for example, recently agreed to take a 19.9% stake in the Nasdaq(NDAQ) and buy Nasdaq's 28% stake in the London Stock Exchange.

TheStreet.com recently caught up with Niket Patankar, CEO of financial services consultant and outsourcer Adventity, which helps top investment banks research the Dubai market and design Islamic financial products, to find out what the mega-banks are doing in Dubai.

TheStreet.com: Why the big interest in Dubai right now? Why are banks falling all over each other to establish themselves there?

Patankar: There are multiple reasons, but primarily it is the growth in the domestic market. Dubai's GDP is growing at an annualized rate of 8% to 10%. On top of that, there are a tremendous amount of ex-pats moving in and looking to do business. They are being encouraged by investor-friendly laws created by the ruler of Dubai.