Dubai attracted Dh27.3 billion ($7.4bn) of inward foreign direct investment (FDI) last year, a 7.1 per cent increase from the previous year bolstered by investment projects from the US, Europe and Saudi Arabia, according to official statistics.
In particular, the emirate is a top global destination to invest in technology and technology transfer, with medium- and high-tech ventures accounting for more than 60 per cent of investment projects, the latest Dubai FDI Monitor report, published on Sunday, showed. Research & development accounted for 3.5 per cent of total FDI into Dubai in 2017, the report added.
“The increase in FDI flows into Dubai and the emirate’s ability to maintain its global leadership among FDI destinations in 2017 reflects the confidence of local and international investors in the business environment in Dubai and the UAE,” said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai.
Dubai and the UAE government as a whole have been taking steps to increase FDI inflows in recent years. These measures include encouraging new businesses to set up in economic free zones with lower registration costs, streamlining regulation in emerging growth sectors such as FinTech, and, last month, announcing plans to relax corporate ownership laws to allow foreign investors to own 100 per cent of a UAE company.
Efforts to increase FDI are part of broader measures to boost the contribution of the non-oil sector to the UAE economy to 80 per cent by 2021, from the current 70 per cent, following sluggish economic growth on the back of low oil prices.
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The UAE overall recorded $10.3bn of inward FDI in 2017, up 6.7 per cent from $9.6bn in 2016, according to previously released figures from the Federal Competitiveness and Statistics Authority.
In Dubai, the total number of inward FDI projects last year increased 50 per cent from 2016 to reach 367, the FDI Monitor report showed. The projects included new investments, re-investments and mergers & acquisitions, among others. Strategic projects with capital of more than $50m accounted for 93 per cent of total capital inflows.
Dubai continued to attract strategic investments from major industrialised countries in 2017, the report added. The US, the UK, France, India and Germany respectively, followed by Saudi Arabia and Austria, were the top source markets for FDI into Dubai last year.
“This reinforces both Dubai’s success in providing a platform for businesses to serve the world’s fastest-growing markets spanning the Middle East, Africa and South Asia, and its status as a global economic hub,” it said.
Dubai witnessed an increasing inflow of technology and knowledge-based FDI investments – such projects accounted for 22 per cent of total capital inflows in 2017 according to the classification adopted globally by the Organisation for Economic Co-operation and Development (OECD).
The figures “confirm Dubai’s success in creating an environment suitable for new business models that rely on technology and innovation as competitive advantages”, the report said.
