Increasing foreign direct investment (FDI) inflows reflect growing investor confidence in Dubai, UAE, said HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and the Chairman of The Executive Council.
HH said that FDI into Dubai had grown in 1H18, reaching US$4.84 billion. This is a 26% increase compared to the first half of last year, while the number of FDI projects surged to 248, an increase of 40% over the same period last year,. The figures are from Dubai FDI Monitor data issued by the Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economic Development (DED) in Dubai.
"The rise in FDI capital and projects reinforces Dubai’s leading position as the preferred global location for global businesses and startups pursuing growth and expansion and clearly reflects investor confidence in Dubai’s economy,” Sheikh Hamdan added. Dubai’s ability to maintain its position as one of the top FDI destinations in the world reflects the confidence of the global investor community in its business environment and its ability to offer diversified investment opportunities in key growth sectors, especially knowledge and technology, he said.
The Dubai FDI Monitor shows that 43% of all FDI projects in 1H18 use high and medium technology, according to the Organisation for Economic Co-operation and Development (OECD)*. Strategic projects accounted for 56% of total investment projects that Dubai attracted in 1H18. India and Thailand were in the top five list of source countries for FDI capital. India was also one of the top five countries initiating investment projects.
Sheikh Hamdan highlighted Dubai's success in attracting investments from both developed and developing markets and providing a platform for businesses to serve markets across the Middle East, Africa and South Asia. This has enhanced the emirate’s status as a strategic gateway to regional and international markets and a pivotal hub in the global economy, he said.
He also commended Dubai FDI’s role in increasing global awareness of the advantages Dubai provides as a smart and sustainable city of the future, a gateway to regional growth markets and a global business hub, as well as a city that attracts FDI which can contribute positively to sustainable economic growth and prosperity.
Sami Al Qamzi, Director General, DED, said: “FDI flows in the first half of 2018 reaffirm the sustained growth of Dubai economy, and the diversity, competitiveness and attractiveness of the emirate.” He said the 2018 results follow on from Dubai's achievements in 2017, which include being ranked 4th in greenfield FDI projects, 10th in FDI capital flows and 5th in FDI reinvestment projects globally.
He also stressed that Dubai's economy is confident of boosting FDI flows, backed by the strengthening of its economic stimulus, closer cooperation and partnership within the business community and new laws that enhance Dubai's competitiveness as a preferred FDI destination and leading incubator for innovation.
Fahad Al Gergawi, CEO of Dubai FDI said growth of foreign investments into Dubai and new projects and investments based on advanced technology underlines Dubai’s significant role in driving the 4th Industrial Revolution and its ability to be prepared for future economic shifts. The emirate’s strategic approach of encouraging investment in industries based on innovation, artificial intelligence (AI) and the Internet of Things (IoT) have also proved attractive for investors, he said.
Al Gergawi added: “We are confident about the future prospects for enhancing FDI flows, especially following the issuance of new laws that enhance Dubai's competitiveness as a preferred global destination for investment and an incubator for innovation and creativity, including laws allowing 100% foreign ownership of companies, (and) 10-year residency visas for investors, innovators, professionals and top-performing students.”
Dubai has witnessed an increase in FDI capital inflows in the past year, despite the decline in global FDI flows. Total FDI flows reached AED27.3 billion in 2017, a 7% increase compared to 2016.
*OECD classifies technology as high, medium-high, medium-low and low-technology. The classification is based on the importance of expenditures on research and development relative to the gross output and value added of different types of industries that produce goods for export. Examples of high-technology industries are aircraft, computers, and pharmaceuticals; medium-high-technology includes motor vehicles, electrical equipment and most chemicals; medium-low-technology includes rubber, plastics, basic metals and ship construction; low-technology industries include food processing, textiles, clothing and footwear.
