Dubai retains position as world’s top FDI destination in H1
Dubai consolidated its status as the world’s leading foreign direct investment (FDI) hub, retaining its first rank globally for attracting FDI projects during H1 2022. In a record first-half achievement for the emirate, Dubai attracted 492 FDI projects during the first six months of 2022, an 80.2% increase compared to the same period in 2021, according to data published by Dubai’s Department of Economy and Tourism (DET).
Dubai also ranked first globally in attracting greenfield FDI projects during the same period this year, according to the Financial Times Ltd’s ‘fDi Markets,’ the most comprehensive online database on cross-border greenfield investments. Greenfield projects accounted for a 56% share of Dubai’s FDI projects during the period, according to the Dubai Investment Development Agency (Dubai FDI), a DET entity, using data from its Dubai FDI Monitor. Dubai witnessed FDI inflows of 13.72 billion dirhams ($3.73 billion) in H1 2022, reflecting a growth of 14.6% compared to the same period last year.
Meanwhile, FDI investments and projects generated 15,164 new jobs in H1 2022, a 33.5% year-on-year growth compared to H1 2021. Dubai retained its top rank in FDI-related employment among countries in the Middle East and North Africa (MENA). Underlining its focus on retaining investments and investor confidence, Dubai ranked fourth globally in reinvestment FDI projects, 10th globally in reinvestment FDI capital inflows, and eighth in terms of jobs created by reinvestment projects.
Dubai ranked first globally in attracting greenfield FDI projects in 2021, with 418 greenfield FDI projects, and the latest numbers vindicate its business-friendly initiatives and policies. Investor confidence in the emirate remains high, reflecting its economic stability and bright growth prospects.
World’s best economy
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai conveyed his satisfaction with the new global and regional FDI milestones, which, he said, were aligned with the directives of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the world’s best city to live, work and invest.
“The progressive vision and farsighted policies of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, have made Dubai a magnet for foreign investment. Dubai’s record FDI inflows and consistent top rankings testify to investor confidence in its economic stability and bright growth prospects and reinforce its status as a strategic partner to foreign investors.
“In a world facing profound challenges over the past few years, Dubai offers one of the safest and most stable business environments, boosting investor appetite. The emirate provides a policy ecosystem for future-focused high-tech sectors, while its robust infrastructure offers a productive environment for conventional businesses. Alternative investments and high-tech projects contribute an increasing proportion of the emirate’s growing FDI inflows, underscoring Dubai’s position as the capital of the global digital economy and a hub for innovation and advanced technology.”
Sheikh Hamdan bin Mohammed added: “The vision and directives of Sheikh Mohammed bin Rashid have laid solid foundations for Dubai’s partnership with the foreign investor community, based on mutual trust and respect. The emirate’s world-class infrastructure, flexible regulatory framework, and dynamic business ecosystem that supports innovation and attracts global talent are factors that cement Dubai’s position as the world’s leading investment destination.
“We remain committed to enriching Dubai’s enabling business environment to explore fresh growth avenues with our partner investors to achieve even greater success in years to come. Further diversifying the economy, attracting more investment in future-focused sectors, and enhancing growth opportunities in the digital economy will remain our strategic objectives for Dubai’s development journey.”
Read more: Dubai retains its spot as the world’s top FDI destination for tourism
Helal Al Marri
For his part, Helal Saeed Al Marri, Director General of Dubai’s Department of Economy and Tourism, added: “We started the year at an accelerated pace, catalyzed by a hugely successful Expo 2020, a re-ignition of global tourism and MICE, a raft of progressive visa policies and legislation, and Dubai showing strong and sustained resilience within the context of international economic and supply chain pressures. These catalysts helped boost global investor confidence in Dubai. The global business community increasingly sees Dubai as a preferred ecosystem for growth, investment diversification, geographic consolidation, talent attraction, and R&D development.
“Underpinned by a clear and stable future-looking roadmap, driven by the vision of Sheikh Mohammed bin Rashid, the emirate is accelerating its development to achieve the goals of the Principles of the 50, foremost of which is the creation of the best and most dynamic economy in the world over the next 50 years.
“Our achievements in attracting investment affirm our commitment to work towards advancing Dubai’s leading position, raising its economic and tourism competitiveness, expanding the horizons for international trade, and keeping pace with future developments to position Dubai as the best city in the world to live, work and invest.”
Types of foreign investments
The growth in FDI inflows places Dubai in an advanced global position across key metrics. Dubai attracted FDI projects and capital of all kinds, including greenfield projects, reinvestments, mergers and acquisition projects, and new investment forms.
While 56% of the FDI projects that came into Dubai in H1 2022 were greenfield projects, 29% belonged to the category of new forms of investment, 6% were VC-Backed FDI projects, 5% were mergers and acquisition (M&A) projects, 3% were reinvestment, and 1%, joint ventures.
Data from the ‘Dubai FDI Monitor’ also showed that medium and high-tech projects accounted for 62% of the total FDI projects in the first half of 2022, while 38% were low-tech investment projects. The emphasis on technology indicates Dubai’s success in attracting global talent and capital into its transition as a digital economy.
Recently, the ‘Dubai FDI Monitor’ received a special mention from the United Nations Economic and Social Council for Asia and the Pacific (UNESCAP) as the best global practice in tracking and monitoring investments.
Top source markets and sectors
The United Kingdom (36%), the United States (20%), France (10%), Singapore (5%), and Switzerland (4%) were the top source countries for FDI capital in Dubai during the first half of 2022. In terms of FDI projects, the top five source markets were the US (18%), the UK (15%), India (13%), and Singapore and France (4% each).
The five most prominent sectors in terms of FDI capital inflows to Dubai in the first half of 2022 were Speciality Trade Contractors (28%), the Non-Residential Building Construction sector (12%), Accommodation and Food Services (12%), Data Processing, Hosting and Related Services (6%), and Electric Power Generation (4%). The Wholesale and Retail Trade sector and the Accommodation and Food Services sector topped the list with 11% each in terms of the number of FDI projects, followed by the Computer Systems Design and Related Services sectors, Software Publishing, and Administrative and Support Services, with 7% each.
The ‘fDi Markets’ ranking testifies to Dubai’s success in achieving global leadership in many sub-sectors of FDI. The emirate ranked first in the world in terms of the number of projects in the Creative Industry and the number of FDI projects in Business Services, Financial Services, Transportation and Warehousing, Industrial Equipment, and Sales, Marketing, and Support sectors.