Foreign Direct Investments Increases By 116% Over The Past Decade – UAE

Foreign Direct Investments Increases By 116% Over The Past Decade – UAE

The Foreign Direct Investments (FDI) in the United Arab Emirates (UAE) witnessed significant growth in recent years, despite the challenges posed by the Covid-19 pandemic. The reports published by the Ministry of Economy suggested that during the past decade, from 2012 – 2021, the FDI in UAE increased by 116% reaching USD 20.667 billion (AED 76 billion) in 2021, when compared to USD 9.56 billion (AED 35 billion) in 2012. The ranking of the FDI in UAE has also increased over the past decade reaching 19th globally, in the list of top 20 countries that attract FDIs. It was also ranked 1st in West Asia and Middle East & North Africa region (MENA).

Similarly, the cumulative FDI amount invested in the UAE also increased by 141.6% from 2011 – 2021, increasing from USD 71 billion (AED 260.8 billion) to USD 171.5 billion (AED 630 billion), which is an approximate increase of FDI investment by USD 100.5 billion (AED 369 billion) during this period of 11 years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source – Ministry of Economy

Read: Dubai to Launch 50 Offices Globally to Promote Commerce and Attract Investments

Foreign Direct Investment (FDI) by Sectors – UAE

In recent years, almost all national economic sectors have continued attracting FDIs. The data published by the Central Bank of the UAE suggested that the national manufacturing sector grew by 13%, while the healthcare sector by 9%. The information and communication technology sector saw an increase by 6%, the financial, banking and insurance sector by 4%, the real estate sector also saw an increase by 4%, the oil and gas sector by 3% and the services sector by 2% compared to 2020.

The value of global FDI inflow in 2021 was estimated to be around USD 1.6 trillion (AED 5.8 trillion) which was an increase by 64% when compared to the year 2020. For the year 2020, the most developed countries globally saw a growth in terms of FDIs. In the USA, the FDI inflow saw a significant increase by more than two times reaching USD 367 billion (AED 1.3 trillion). Similarly the FDI inflow in developing countries increased by 30% reaching USD 837 billion (AED 3 trillion) for the same period.

Read: UAE Approves 22 Policies to Expedite Transition to Circular Economy

Investment Opportunities in UAE – 2022

Foreign Direct Investors (FDI) are confident in the government’s commitment to providing an effective environment for their businesses to grow. Several new initiatives taken by the government such as reduced fees for issuing and renewing licenses, waivers on some fees related to residency visas, including the processing of residency visas, removal of fees relating to permits for labor supplies rooms, re-issuance of cheques, etc. will also support the local businesses to expand internationally while attracting global investments and adding new markets to the global business lines. The network will contribute to sustainable economic growth in the UAE and boost the competitiveness of its commercial sector.


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Author: Waqas Siddiqui
The author is the Managing Director of Research Konnection, a Dubai based market research and consulting firm that helps local and international companies to identify emerging business opportunities and successfully expand in the Gulf region. The author can be reached at waqas@researchkonnection.com