A massive fireworks display kicked off for New Year at the world's tallest tower in Dubai, while plumes of smoke billowed in the air from a fire raging at a nearby luxury tower.

The fire, which burnt on into the first morning of 2016, engulfed a 63-storey skyscraper hotel but with the block evacuated and only minor injuries reported authorities went ahead with the New Year's fireworks display a few hundred metres away.

More than 12 hours later, Dubai firefighters largely watched the fire from the ground, unable at one point to use a water hose on a ladder truck.

It was not immediately clear what caused the fire, which ran up at least 20 stories of The Address Hotel near the Burj Khalifa, the world's tallest skyscraper at 828 metres.

The Maltese couple who were at the hotel's 63rd floor at the time of the fire.

A Maltese couple who were on the hotel's 63rd floor at the time of the fire are safe.

Christopher and Annaliz Borg told timesofmalta.com "We were at the hotel's 63rd floor and saw smoke rising up from outside. There was massive panic inside and the staff were yelling at us to run out.

"We had to run down 63 flights of stairs. As soon as we got to ground level we were escorted out," they said.

The Dubai government's media office said the blaze was 90 per cent under control. Police chief major general Khamis Matar told Al Arabiya television: "All residents of the hotel were evacuated and there are 14 injured, with light injuries."

A medic on the scene who declined to be identified told Reuters: "There are more than 60 people injured with light injuries from smoke inhalation and from crowding while in the stairs evacuating the building."

But as midnight struck, with the Address building continuing to burn, onlookers cheered as a swirling mass of multicoloured fireworks enveloped the Burj Khalifa.

The whole hotel side overlooking the fountains is just a ball of fire

The Dubai media office said the blaze had started on the 20th floor, on the outside of the 300-metre tower, and that internal fire-fighting systems were operating to try to prevent it getting inside the hotel.

Four fire brigade teams were at the site.

Wounded people are seen outside the Address Downtown Dubai hotel and residential block after a fire engulfed the skyscraper in downtown Dubai. Photo: Reuters

A Maltese resident told timesofmalta.com: "The whole hotel side overlooking the fountains is just a ball of fire. The rumours are that everyone has been evacuated and that there was panic among the people by the fountains and the outside restaurants.

"There probably are thousands of people around the place to see the huge fireworks display so I dread to think how they are managing to move everyone. It looks to us that the hotel will collapse by morning," said the resident, who preferred to remain unnamed. 

The fireworks are all wired from Burj Khalifa to other roads and hotel for a 45-minute display along the beach.

Dubai is a trade, tourism and investment hub for the Gulf region, and is one of seven emirates that make up the United Arab Emirates (UAE).

People run away as a fire engulfs the nearby The Address Hotel in downtown Dubai.