The official language is Arabic, but it is safe to say that the majority of the population doesn't speak it (Iranian, Indian, Asian and Western expatriates are more numerous than Arabs in Dubai, and usually have very limited knowledge of Arabic). English is the lingua franca.
As the UAE was a British protectorate, most locals would have learnt English in school and would know at least basic English. Hindi or Urdu is another language widely spoken and understood.
Other languages widely spoken in the UAE include Malayalam, Tamil, Farsi (Persian), and Tagalog (Filipino).
Most people possess at least a basic command of English, though it is not uncommon to meet people whose English is limited.
In Dubai, most shops, hotels, and commercial businesses conduct business in English. Generally speaking, Arabic is spoken by government departments and the police; however, in Abu Dhabi and in the Northern Emirates, Arabic is much more widely spoken.
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