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Visa on arrival needs you to have a valid visa to enter Dubai, however you can apply and receive the authorization at the time of your entry. While you arrive you need to apply for the visa at the visa counter and you will be stamped on the passport.
Dubai, being a global destination and a trade destination entices world travelers and business persons to have a short stop over during their journey. To help the short term tourists in the country and to give a thorough monitoring on the inflow of visitors to Dubai, the transit visas are introduced.