The UAE Advances 5 Positions to 11th Globally in Inbound Foreign Direct Investment in 2023

An Increasingly Attractive Global Investment Destination

The United Arab Emirates (UAE) has made a significant leap in the global foreign direct investment (FDI) rankings, advancing 5 positions to rank 11th globally in 2023. This achievement reflects the country's success in attracting a record $23 billion in FDI, a 10% increase compared to the previous year.

This outstanding performance is attributed to the UAE's visionary leadership and strategic initiatives, such as the NextGenFDI program and Comprehensive Economic Partnership Agreements (CEPAs), which have transformed the country into a global investment hub. These initiatives have highlighted the UAE's strong economic fundamentals, business-friendly environment, and commitment to diversification, factors that have positioned it as an extremely attractive destination for foreign investors.

Strategic Initiatives Drive Success in Attracting FDI

The UAE's success is largely due to initiatives such as the NextGenFDI program, which streamlines company formation and offers comprehensive services, and the CEPA program, which aims to boost trade and investment with strategic partners. These initiatives have contributed to improving the country's investment environment and generating confidence among international investors.

Furthermore, the UAE has consolidated its position as the most attractive investment destination in the Arab world and the region, attracting $30.7 billion in FDI in 2023, three times more than its closest competitors in the Middle East. This dominant position is reflected in the fact that the country accounts for 45.4% of total FDI inflows to Arab countries, 47.1% of inflows to West Asia, and 38.6% of inflows to the Middle East and North Africa region.

Key Factors Driving Success

Several factors have contributed to the UAE's success in attracting FDI, including:

- A stable and sustainable investment environment in Dubai, which has generated long-term trust among international investors.

- The Dubai Economic Agenda D33, a strategic plan for the emirate's future, which has driven Dubai's leadership in attracting FDI across various sectors, especially future-oriented ones.

- Dubai's strong economic recovery, driven by the reactivation of tourism, retail trade, and overall GDP growth, which has further reinforced the UAE's appeal as a global investment destination.

Top Source Countries and Sectors for FDI

The top source countries for FDI in the UAE in 2023 were the United States, United Kingdom, India, France, and Switzerland, which accounted for 54% of total FDI projects and 72% of total FDI capital.

In terms of sectors, the top five accounted for 67.6% of the total estimated FDI capital in the UAE in 2023: Financial Services (29.1%), Business Services (19%), Consumer Products (9.2%), Software & IT Services (6%), and Textiles (4.3%).

Positive Outlook for 2024

The prospects for FDI performance in the UAE in 2024 are encouraging. The country is expected to continue with its strategic reforms to attract FDI, which have proven successful in generating investor confidence and facilitating business.

Additionally, the UAE's robust economic growth, along with its diversification efforts, will continue to attract investors seeking stable and expanding markets. Moreover, the country's strategic location as a regional trade and logistics hub will remain a key draw for companies looking to access wider markets.

In summary, the UAE has consolidated its position as an increasingly attractive global investment destination, thanks to its visionary leadership, strategic initiatives, and strong economic fundamentals. This outstanding performance promises a bright future for FDI in the country.