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Why Dubai is global destination for foreign direct investment?

Dubai is global destination for foreign direct investment
January 9, 2024

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Over the last few years, UAE has become a major access point for foreign investments. Especially, many countries are preferring Dubai as a global destination for foreign direct investment (FDI). That’s why both businesses and people are using this hub to enter the wider economic region during 2024.

The reason lies in the strategic location of Dubai which connects the economies of the East and West. So, it is catering to the needs of billions of consumers belonging to Middle East, Asia, Africa, Europe, and Americas. Dubai is continuously undergoing a tremendous amount of development in many sectors.

The United Arab Emirates has investor-friendly policies and world-class infrastructure. As a result, Dubai has got the confidence of foreign companies and expatriates. They want to enter in the market by setting up a business and most of them plan to settle there.

Main economic indicators of FDI potential of Dubai

What are key economic indicators of FDI potential of Dubai?

Dubai has become a hub for finance, business, trade, and tourism globally. The growth rate of Dubai’s economy is higher than that of Gulf/MENA region and the UAE. For this reason, Dubai is a preferable global destination for foreign direct investment.

Let’s take a look on main economic indicators that iterate FDI potential of Dubai.

  • The UAE ranks 10th on the FDI Intelligence Standouts Watchlist 2023.
  • FDI inflows into the UAE were $22.7 billion in 2022 with a growth of 10% from 2021 as per UNCTAD.
  • The leading source countries of foreign capital into UAE are USA, Canada, UK, France, Spain, Switzerland, KSA, Singapore, and India.
  • The top sectors that draw FDI capital are non-residential building construction, accommodation and food services, scientific research and development services, real estate, and retail and wholesale trade.
  • In 2022, UAE has undertaken 1173 FDI projects, growing from 618 projects in 2021.
  • Dubai with 880 entries in H1 of 2023 cements 1st position as world’s top destination for FDI projects.
  • Among the popular cities for foreign travel, Dubai ranks 1st according to Tripadvisor, 4th by MasterCard, and 7th by Euromonitor.

Read more: Low-cost investment businesses to enter the world of fashion

Dubai as a global destination for foreign direct investment

Why Dubai is global destination for foreign direct investment?

Dubai’s ability to attract investors from around the world is because of the strength of the local economy. The ease of governmental regulations and trade policies make it ideal business hub has for foreign entrepreneurs. Dubai has diversified its economy in so many sectors that potential investors have various options for registering a company.

The government of Dubai has spent a lot in providing world-class infrastructure for its inhabitants. Dubai ranks third as the most attractive investment destination for infrastructure investors. Holding a unique position on the world map, Dubai puts more than 2.4 billion people within 5 hours of flight.

Due to the presence of several international airports and seaports in the UAE, Dubai has become a popular trade hub. There are more than 6500 weekly flights through Dubai airports and 140 airlines directly connecting Dubai to 260 destinations. Dubai hosts many international events, trade shows, business conferences, and tourism attractions.

Dubai - The most attractive investment destination
Dubai – The most attractive investment destination

Advantages for new business setup in Dubai

What are benefits of new business setup in Dubai?

By starting a business in Dubai, you can avail numerous advantages such as the following.

  • Three options are available to form a company — mainland, free zone, or offshore
  • Foreigners can hold 100% ownership of the company
  • Zero taxation in the free zone
  • 9% tax in the mainland, but you can trade in the UAE market
  • Complete repatriation of capital and profits
  • No custom duty or fees
  • Availability of land, road, electricity and the entire necessary infrastructure to begin your business
  • The banking sector is safe and profitable
  • Cheap labor force
  • Good healthcare, education, and transport system

Further reading: Investment opportunities in the textile sector in Dubai

Conclusion

The government of UAE is simplifying its policies to boost the economy. Dubai as a global destination for foreign direct investment is attracting more and more companies. Consequently, large-scale industries, small/medium-level enterprises, and startups have an ideal opportunity to establish their business in Dubai.

The stability of the Dubai market is bringing a huge inflow of FDI that is leading to further financial growth. Now is the time for entrepreneurs to fulfill their dream of launching a business in Dubai. So, discuss with professional business consultancy KWS Middle East to help you in this process while saving your time.

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