A stunning view of Dubai. The UAE recorded a 116% growth in FDI over the past 10 years.
Inayat-ur-Rahman, Business Editor
The UAE will continue to drive foreign direct investment (FDI) capital into the region as investors prefer the emirate due to its business-friendly policies, excellent infrastructure, and structural changes aimed at diversifying the economy, experts say.
Hatem El Safty, CEO of Business Link, said the UAE will attract a major share of $66 billion in potential FDI inflows into the Middle East, North Africa, and Pakistan (MENAP) in 2023 as global investors consider the emirate an ideal destination for investment.
Referring to a recent report released by the Institute of International Finance, he said the emirate is expected to attract $22 billion in FDI inflows this year due to its business and visa reforms while the MENAP region is expected to receive $56 billion in FDI inflows.
“We have observed how willingly people invest in the UAE and allowing 100% foreign ownership in businesses is a genius stroke by the government to attract an even more significant number of potential investors,” El Safty said.
The UAE recorded a 116% growth in FDI over the past 10 years, signaling the development and diversification of the economy despite geopolitical tensions, global economic slowdown, and volatile oil prices in international markets.
In 2022, the UAE attracted foreign investments in various sectors. The oil and gas sector account for 59% of the total FDI contributions, followed by 10% in IT and communications as the country is implementing a number of steps to encourage investment in the industrial sector and increase its contribution to Dh300 billion ($81.68 billion) from Dhs133 billion within 10 years.
“The growing number of investments reflects global trust in the UAE’s economy. At Business Link, we have particularly noticed an upsurge in e-commerce and IT-related industries since the pandemic hit the global economy two years back,” said Faisal Qureshi, Chief of Marketing at Business Link Business Setup Consultants.
The UAE continues to entice global attention in terms of foreign investments and entrepreneurship due to ease in doing business initiatives, consistent economic policies, and business-friendly measures. Investors received several incentives from the government which eliminates the hindrance to the flow of investments. Some of these include:100% company ownership, various legal ownerships, no minimum capital requirements, Golden Visa eligibility, 40+ free zone setup options, no income tax.
“We have noticed a spike in business centuries as investors have shown interest in the UAE economy. It is likely that high-net-worth individuals will relocate to the emirate and expand their business operations in the region,” Qureshi said.
Business Link is a professional business consultancy with operations in the UAE and KSA. With an experience 20+ years of in the industry, they help individuals and businesses reach their business goals. Their services range from company formation in the mainland and free zones to PRO, corporate legal services, and business licensing for all business types.
Meanwhile, the Sharjah FDI Office – Invest in Sharjah has recently concluded its successful participation at the high-level 2nd Arab British Economic Summit in London, UK, after holding discussions on trade and investment opportunities across priority sectors with senior government officials, corporates, thought leaders and decision makers from across the Arab world and the UK.
Mohamed Juma Al Musharrkh, CEO, who led the Invest in Sharjah delegation at the conference hosted by the Arab-British Chamber of Commerce, highlighted how the new free trade agreements (FTA) are facilitating bilateral investment flows and re-energising trade ties between the UAE and UK.
Al Musharrkh said: “The FTA’s impact on UK-Sharjah trade will lead to economic growth and job creation and stronger collaboration in innovative new fields and emerging technologies in a mutually beneficial manner, especially as Sharjah has identified limitless potential in seven high-growth sectors – mobility and logistics, healthcare, greentech, agri-food tech, human capital and innovation, advanced manufacturing, and culture & tourism.”
Describing the emirate’s rise as the Middle East’s gateway for investments of the future and its ability to attract diverse, long-term, and high-yielding investments from across the world, the CEO of Invest in Sharjah, said: “Sharjah’s potential to drive business growth is no stranger to the UK. This is well elucidated by the fact that within just Q1 this year, British investments worth $2.1 million had already made their way into Sharjah’s diversified non-oil economy.”
Al Musharrkh further urged UK and Arab investors to tap into the emirate’s high-growth potential and join its robust, knowledge and innovation-driven economy to realise their business interests through streamlined end-to-end solutions provided by the entity. He also touched upon the pivotal value of sovereign wealth funds in nurturing bilateral investments across diverse and vibrant sectors.
At the Invest in Sharjah stand at the conference, the delegates hosted UK-based investors and introduced them to the culture of entrepreneurship and innovation in the emirate fostered by the presence of six specialised business free zones and its business-friendly landscape.