The UAE ranked as the third-largest foreign direct investment market globally in terms of project activity last year, moving up from fourth position the previous year, according to the latest report by data and analytics company GlobalData.
The country attracted $23 billion of FDI in 1,277 projects spanning key sectors including business and professional services, software and IT services and financial services. It has been possible through its investor-friendly policies.
Speaking to The National on the sidelines of the 2024 AIM Congress, Glenn Barklie, principal economist and head of FDI services at GlobalData, said: “The UAE is just one of those places where it is almost a real safe haven for investors, and investors continue to come.”
UAE deepening focus on economic diversification
Barklie highlighted a “domino effect” in foreign direct investments, where a couple of companies come in, they are seen as successful, other companies think ‘I am going to come in and get a piece of the pie as well'”, reported the media agency.
The UAE has turned into a leading destination. Several companies are boosting their investments in the Emirates and setting up offices amid great initiatives from the government, including reduced visa restrictions and incentives for small and medium enterprises.
The UAE seeks to attract Dh550 billion (~$150 billion) in FDI by 2030 and eventually reach Dh1 trillion by 2051. It has also jumped from 18th to 8th place on Kearney’s 2024 Foreign Direct Investment Confidence Index as it focuses on economic diversification.
FDI markets in Middle East
The UAE is setting up G2G (government to government) relationships, through MoUs (memoranda of understanding), Cepas (comprehensive economic partnership agreement) and free trade agreements. It has a key focus on boosting non-oil foreign trade.
The US and Germany were the biggest FDI markets globally in 2023, followed by the UAE. In the Middle East, the Emirates continued to maintain a leading position in terms of the number of FDI projects, and ranked second in capital investment flows after Israel.
The Middle East continues to be closely monitored. Business and professional services, software and IT services, construction and real estate, financial services, tourism and logistics were among sectors that attracted foreign investment in the region.
Top 5 FDI recipients in Middle East
(In terms of capital investment)
1. Israel: $25,789 million, 43 projects
2. UAE: $23,010 million, 1,277 projects
3. Saudi Arabia: $17,350 million, 305 projects
4. Jordan: $10,766 million, 14 projects
5. Oman: $7,517 million, 42 projects
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