Foreign investors flock to UAE

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The UAE ranks as the 14th most attractive destination for Foreign Direct Investment, with even better rankings expected as the government tailors policy to enhance FDI inputs.

UAE is an investor hotspot for global investors, attracting USD 7.7 billion in FDI for 2011, an increase of 40 percent over 2010 figures. Numbers for 2012 look set to improve on the trend.

Dubai skyline. Photo: Daniel Cheong
Global investors have rushed to the UAE to gain easy and fast access to the rapidly growing African and Middle Eastern markets. Photo: Daniel Cheong

The latest edition of the A. T. Kearney Global Foreign Direct Investment Confidence Index (FDICI) places the UAE as the 14th most attractive destination for foreign direct investment (FDI).

The survey points out the UAE has moved up one spot and made an impressive mark in the minds of investors, building quality infrastructure, tapping on its strategic location and providing a tax-free environment to business.

These government initiatives have strengthened the UAE’s position and promoted it as a hub for Foreign Direct Investment.

In 2011, the Emirates were able to attract foreign investment of about USD 7.7 billion, higher by about 40 percent compared to 2010 figures. Global investors have rushed to the UAE to gain easy and fast access to the rapidly growing African and Middle Eastern markets.

The UAE has made a strong comeback after the global financial crisis with 70 percent of the surveyed corporate investors expecting their companies to make more investments there.

2013 FDI Confidence Index
2013 FDI Confidence Index

According to Anshu Vats, partner at A.T. Kearney Middle East; “With strengths in logistics, tourism, and hospitality, the UAE remains the pocket of strength for regional investments in the Middle East. FDI could increase incoming years as the UAE eases foreign ownership laws.”

The government is trying to further develop an investor friendly climate by permitting foreigners to own more than 49 percent of a business in certain sectors outside the free zones. Once approved, the legislation is expected to unleash the Gulf state’s potential for torrents of international investment.

The United States was ranked at the top of the list of 25 most attractive FDI destinations. The U.S. was trailed by China, Brazil, Canada and India. With Europe’s economy struggling to make a recovery and overcome the debt crisis, only seven countries from the region were ranked among the top 20 on the charts. Germany was the highest ranked European country at seventh position.

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