The UAE attracted $16 billion in greenfield FDI capital inflows last year. The most prominent countries involved in these investments were the U.S., India, the U.K., Saudi Arabia, and France, highlighting the UAE’s position as a preferred destination for international investors.
Mohammed Abdul Rahman Al Hawi, under-secretary of the UAE Ministry of Investment, said that in 2023, key sectors driving the growth of greenfield FDI in the UAE included business services and software and IT services, which created a significant number of jobs and attracted substantial capital. Moreover, sectors such as financial services, industrial equipment, and transportation and warehousing played an important role in contributing to this growth.
“These investments led to a 7.5 percent rise in total jobs created, along with a 31 percent increase in the number of announced projects, and a 37 percent rise in announced greenfield foreign direct investment (FDI) capital inflows,” he said in statements to WAM. He added that the UAE expects these investments to generate nearly 50,000 jobs from 1,332 projects.
Five key sectors contribute 86 percent of FDI
In addition, five key sectors are leading growth in greenfield FDI as part of the UAE’s broader economic growth and diversification strategy, which strengthens its resilience and economic sustainability. These sectors collectively contribute 86 percent of the total FDI stock.
Their individual contributions are as follows:
- Wholesale and retail trade: This sector contributed 26 percent of the UAE’s FDI stock. It benefits from the UAE’s strategic location, advanced logistics infrastructure, and strong consumer demand. In 2023, consumer spending rose by 13 percent, retail spending rose 14 percent, and non-retail spending increased by 12 percent.
- Real estate: Real estate accounts for 24 percent of the UAE’s FDI stock. Investments in the sector are driven by the UAE’s ongoing urban development and its strategic position. This allows for significant accessibility to a global population, making it a prime location for international investment.
- Finance and insurance: This sector contributes 21 percent of FDI stock, supported by the UAE’s stable and attractive banking environment. It has become a hub for international private wealth, with 120 of the world’s wealthiest families and individuals based in the UAE’s DIFC, collectively holding assets worth $1.2 trillion.
- Mining and quarrying: This sector contributes 8 percent of the UAE’s FDI stock. It capitalizes on the UAE’s rich natural resources and its central positioning within global supply chains. The UAE’s mineral resources strategy aims to increase its share of non-oil GDP to 5 percent by 2030.
- Manufacturing: Finally, manufacturing contributes 7 percent of the UAE’s FDI stock. This sector is a vital component of the UAE’s economic diversification efforts. Besides, the launch of Operation 300bn has boosted investments, making it the third largest sector by nominal GDP.
Top 5 FDI contributors in the UAE
In terms of international investment, the top five countries contributing to FDI stock in the UAE are:
- United Kingdom: 15 percent of FDI stock
- India: 6 percent
- Saudi Arabia: 4 percent
- Netherlands: 4 percent
- China: 4 percent
“Other notable contributors include France (4 percent), the U.S. (3 percent), Kuwait (3 percent), Japan (3 percent), and Switzerland (2 percent). These countries reflect the UAE’s position as a leading global hub for business and investment, drawing significant capital from across the world,” Al Hawi added.
In 2023, the UAE attracted significant greenfield investments from several key countries. The largest capital investment announcements were from the United States at $3.8 billion, India at $3.3 billion, the United Kingdom at $1.2 billion, France at $1.1 billion, and Saudi Arabia at $1.1 billion.
UAE boosts international presence
In recent years, the UAE has actively pursued international partnerships to enhance its global economic presence and attract additional FDI. The country has signed six Comprehensive Economic Partnership Agreements with key economies including India, Turkiye, and Indonesia. “These agreements aim to boost trade, investment, and economic cooperation,” he added.
In addition, the UAE entered into 115 bilateral investment treaties with countries worldwide, and 146 double taxation agreements. “These treaties aim to protect and promote cross-border investments and prevent the double taxation of income and foster international economic relations,” Al Hawi added.
Read: Abu Dhabi Crown Prince Sheikh Khaled holds talks with Singapore Prime Minister
UAE’s overseas investments reach $2.5 trillion
The UAE has firmly established itself as a major player in global FDI, with total overseas investments, covering both public and private sectors, at around $2.5 trillion by early 2024. “This significant financial presence positions the UAE as an influential economic force, with a strong focus on emerging markets and strategic partnerships that open new investment opportunities globally,” he added.
A key example of the UAE’s investment strategy is its landmark $35 billion agreement with Egypt to develop Ras Al Hekma. With that, the UAE marked the largest direct investment in Egypt’s history. Once completed, the UAE’s total investments in Egypt will likely reach $65 billion.
With investments spanning over 90 countries, the UAE’s global investment portfolio extends to key markets such as India, Indonesia, Egypt, Morocco, and ASEAN nations, as well as several European countries and Turkiye. These efforts reflect the UAE’s ongoing commitment to expanding its economic influence and fostering sustainable growth through international cooperation.
For more economy news, click here.
