DUBAI LEADS WORLD WITH MOST FDI PROJECTS
▶ The value of FDI capital flows into emirate reached Dh26bn last year
Dubai was the top destination in the world last year for foreign direct investment projects and was ranked second in terms of attracting corporate headquarters.
The emirate attracted 418 greenfield FDI projects during the period, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and chairman of the emirate’s Executive Council, said yesterday.
Overall, Dubai attracted 618 FDI projects last year, including greenfield and reinvestment projects, as well as other forms of investment, with the value of FDI capital flows into the emirate estimated to be Dh26 billion ($7bn), up 5.5 per cent compared with the previous year, Dubai Media Office said yesterday.
The number of jobs created through FDI projects also surged by 36 per cent to 24,868 last year.
“Dubai has created a stable, sustainable economic environment and a vibrant business ecosystem for companies and entrepreneurs to launch new ventures, tap new opportunities and expand their business both in the country and beyond its borders,” Sheikh Hamdan said.
Dubai took the top spot globally in attracting foreign direct investment projects last year as the emirate’s economy continues to rebound from the coronavirus pandemic.
Dubai Investment Development Agency’s annual report also placed the emirate second in terms of attracting corporate headquarters.
Dubai attracted 418 greenfield FDI projects during the period, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, said yesterday as he unveiled the annual “Dubai FDI Results & Rankings Highlights Report 2021”, published by Dubai FDI, an agency of the Department of Economy and Tourism.
In total, Dubai attracted 618 FDI projects last year, including greenfield as well as reinvestment projects and other forms of investment, with the value of FDI flows into the emirate estimated at Dh26 billion ($7bn), up 5.5 per cent compared with the previous year, the Dubai Media Office (DMO) said.
The number of jobs created last year through FDI projects also increased 36 per cent to 24,868.
“Dubai has created a stable, sustainable economic environment and a vibrant business ecosystem for companies and entrepreneurs to launch new ventures, tap new opportunities and expand their business both in the country and beyond its borders,” Sheikh Hamdan, who is also chairman of the emirate’s Executive Council, said.
“Over the years, Dubai has also demonstrated its resilience to global economic fluctuations, earning the confidence of global investors, and enhancing its reputation as one of the world’s leading lifestyle and business destinations.”
The UAE, the Arab world’s second largest economy, has recovered from the effects of the pandemic on the back of surging oil prices and a bounce back in its tourism and travel sectors as Covid-19 restrictions ease globally.
The country’s gross domestic product is expected to grow 5.7 per cent this year, up from 3.8 per cent last year, helped by an increase in oil production, according to Emirates NBD. Japan’s largest lender MUFG expects the UAE’s economy to grow 4.9 per cent this year, while Abu Dhabi Commercial Bank estimates a 5.4 per cent expansion.
Dubai’s economy grew 6.3 per cent in the first nine months of last year, according to preliminary data from the Dubai Statistics Centre. Emirates NBD estimates Dubai’s economy grew about 5.5 per cent for the full year – a revision from its earlier forecast of 4 per cent.
The emirate attracted Dh15.9 billion ($4.3bn) in foreign direct investment from 378 projects in the first nine months of 2021, according to official data.
The latest data showed that Dubai continued to maintain and improve its position across key FDI attraction metrics. It ranked first in the Middle East and North Africa, and third globally, up from fourth place last year, in FDI capital inflows.
In job creation through the FDI, Dubai ranked first in the Mena region and fifth globally, up from the sixth-place last year.
“Dubai’s remarkable performance in FDI attraction in 2021 reflects the confidence of investors, multinational companies, start-ups and global talents in the investment and business environment in Dubai, notably the emirate’s success in overcoming the impact of the recent global health and economic challenges while promoting economic growth and creating new opportunities in the future economy,” said Helal Al Marri, director general of the DET.
The year 2021 is “the largest legislative transformation in the history of the UAE, with over 50 laws in all fields updated and reformed, paving the way for the adoption of new policies and regulations that will further enable the economy in Dubai to keep pace with global developments and sustain its leading position in future”.
Last year, President Sheikh Khalifa formally approved the most extensive legal reforms in the country’s history including greater protection of personal data, stronger copyright rules and stricter measures to tackle fake news.
Other initiatives include amendments to the law on electronic transactions and trust services that give digital signatures the same weight as handwritten signatures. A law to protect industrial property and regulate the procedures for its registration, use and assignment was also issued.
The government will also allow investors and entrepreneurs to establish and fully own onshore companies in almost all sectors, except activities deemed to be “strategic” as part of the new changes.
Dubai also became headquarters for 43 FDI projects last year, leading regionally in this category and ranking second globally behind Singapore. The emirate surpassed major cities such as London and New York in hosting global and regional headquarters of international companies, the report showed.
The emirate was ranked third globally in terms of HQ FDI capital flows, which totalled Dh2.8bn, the report showed.
“These achievements reaffirm the strength and strategic advantages of the highly developed infrastructure of specialised free zones in Dubai and the emirate’s pioneering initiatives in adopting legislations to encourage and facilitate investment in the future economy in line with its ambitious strategy to lead the digital economy,” Mr Al Marri said.
Dubai was also ranked first in Mena and 10th globally in Global Venture Capital FDI Projects, according to the “Global Venture Capital FDI Ranking 2022” published by “fDi Intelligence’ based on data gathered during 2003-2021, the DMO said. Further data from “Dubai FDI Monitor”, supported by Magnitt, revealed that 84 Dubaibased start-ups attracted Venture Capital-backed FDI worth Dh2.34bn in 2021, it said.
Meanwhile, the UK emerged as the top source for FDI into Dubai last year, with a 27 per cent share of the total FDI capital inflows into the emirate. The US followed closely with 18 per cent, France 13 per cent, Germany 11 per cent and India 6 per cent, according to the media office.
The accommodation and food services sector topped with 28 per cent share of total FDI capital flows into Dubai last year, followed by residential building construction at 15 per cent, electric power generation at 10 per cent and management of companies and enterprises at 6 per cent, among others.
“Dubai has successfully attracted a record share of the total greenfield FDI projects globally for the second year in a row,” said Fahad Al Gergawi, chief executive of Dubai FDI.
“The share of greenfield FDI projects attracted into Dubai exceeded the 2 per cent barrier for the first time in 2020 with 2.1 per cent, and reached a new high of 2.8 per cent share in 2021.”