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.
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
With a high FDI potential, Dubai has become a hub for business, trade, finance, and tourism globally. The growth rate of Dubai’s economy is higher than that of the UAE, and the Gulf/MENA region. These are the main economic indicators that iterate the 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
The UAE government’s business-friendly regulations and open trade policies make it an ideal business hub for the foreign entrepreneurs. Especially, Dubai is diversifying its economy in so many sectors that potential expatriate investors have various options for registering a company. Dubai’s ability to attract investors from around the world is because of the strength of its inclusive corporate environment.
Holding a unique position on the world map, Dubai puts more than 2.4 billion people within 5 hours of flight. 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.
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.
Advantages for new business setup in Dubai for foreigners
The following benefits are available for the foreigners who are up for moving a business to Dubai.
- 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 zones
- 9% corporate tax in the mainland, but you can fully trade in the UAE market
- Application of DMTT for alignment with global minimum tax
- Complete repatriation of capital and profits
- No custom duty or import/export fee in the free zones near ports
- Profitable financial sector
- Safe and secure banking accounts
- Affordable labor and blue-collar workforce
- Good healthcare, education, and transport system
- Availability of land, road, electricity and the entire necessary infrastructure
- Initiatives like net-zero carbon emissions by 2050 are driving the automobile cleaning sector
- Growing expat population is boosting the food and beverages industry
- High standard of living is empowering sectors like fashion, gold/jewelry, and grooming
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.
FAQs about Dubai as global destination for foreign direct investment
These are the answers too the frequently asked questions on Dubai as global destination for foreign direct investment.
Through strategic initiatives like the Dubai Economic Agenda 2033, Dubai is encouraging foreign direct investment. It has ambition to double the financial growth by creating corporate startups, increasing business competitiveness, and promoting sustainability. Dubai provides investor-friendly policies, world-class infrastructure, and a prime location bridging East and West. So, these factors make Dubai perfect global hub for diverse industries and innovation-driven businesses.
With its National Investment Strategy 2031, Dubai aims to double FDI to AED 1.3 trillion (USD $354 billion). Dubai excels in sectors like real estate, technology, finance, Crypto trading, virtual assets, tourism, renewable energy, logistics, and creative industries. Initiatives like open business culture, easing visa restrictions, giving tax incentives, enabling international partnerships for SMEs grow its FDI potential.
Dubai stands 10th globally on the foreign direct investment rankings (UNCTAD World Investment Report 2023). For the third consecutive year in 2023, Dubai ranks as the top global destination for greenfield FDI and climate control. By getting 1070 greenfield FDI projects, Dubai left behind mega cities like New York, London, and Singapore in 2023.
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