Dubai retains position as world’s top FDI destination in H1 2022

Dubai has retained its status as the world’s leading foreign direct investment (FDI) hub, retaining its first rank globally for attracting FDI projects during H1 2022.

The emirate attracted 492 FDI projects during the first six months of 2022, an 80.2 per cent increase compared to the same period in 2021, according to data published by Dubai’s Department of Economy and Tourism (DET).

Dubai also ranked first globally in attracting greenfield FDI projects during the same period this year, according to the Financial Times’ FDi Markets, its online database on cross-border greenfield investments.

Greenfield projects accounted for a 56 per cent share of Dubai’s FDI projects during the period, according to the Dubai Investment Development Agency (Dubai FDI), a DET entity, using data from its Dubai FDI Monitor.

Dubai witnessed FDI inflows of Dhs13.72bn in H1 2022, reflecting a growth of 14.6 per cent compared to the same period last year.

FDI investments and projects generated 15,164 new jobs in H1 2022, a 33.5 per cent year-on-year growth compared to H1 2021. Dubai also retained its top rank in FDI-related employment among countries in the Middle East and North Africa (MENA).

Underlining its focus on retaining investments and investor confidence, Dubai ranked fourth globally in reinvestment FDI projects, 10th globally in reinvestment FDI capital inflows, and eighth in terms of jobs created by reinvestment projects.

Dubai ranked first globally in attracting greenfield FDI projects in 2021, with 418 greenfield FDI projects, and the latest numbers vindicate its business-friendly initiatives and policies. Investor confidence in the emirate remains high, reflecting its economic stability and bright growth prospects.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, said: “We remain committed to enriching Dubai’s enabling business environment to explore fresh growth avenues with our partner investors to achieve even greater success in years to come. Further diversifying the economy, attracting more investment in future-focused sectors, and enhancing growth opportunities in the digital economy, will remain our strategic objectives for Dubai’s development journey.”

While 56 per cent of the FDI projects that came into Dubai in H1 2022 were greenfield projects, 29 per cent belonged to the category of new forms of investment, six  percent were venture capital-backed FDI projects, 5 per cent were mergers and acquisition (M&A) projects, 3 per cent were reinvestment, and 1 per cent, joint ventures.

Data from the “Dubai FDI Monitor” also showed that medium and high-tech projects accounted for 62 per cent of the total FDI projects in the first half of 2022, while 38 percent were low-tech investment projects. The emphasis on technology indicates Dubai’s success in attracting global talent and capital into its transition as a digital economy.

Recently, the “Dubai FDI Monitor” received a special mention from the United Nations Economic and Social Council for Asia and the Pacific (UNESCAP) as the best global practice in tracking and monitoring investments.

The UK (36 per cent), the US (20 per cent), France (10 per cent), Singapore (5 per cent), and Switzerland (4 per cent) were the top source countries for FDI capital in Dubai during the first half of 2022. In terms of FDI projects, the top five source markets were the US (18 per cent), the UK (15 per cent), India (13 per cent), and Singapore and France (4 per cent each).

The five most prominent sectors in terms of FDI capital inflows to Dubai in the first half of 2022 were speciality trade contractors (28 per cent), the non-residential building construction sector (12 percent), accommodation and food services (12 percent), data processing, hosting and related services (6 per cent), and electric power generation (4 per cent)

The wholesale and retail trade sector and the accommodation and food services sector topped the list with 11 per cent each in terms of the number of FDI projects, followed by the computer systems design and related services sectors, software publishing, and administrative and support services, with 7 per cent each.

The emirate ranked first in the world in terms of the number of projects in the creative industry and the number of FDI projects in business services, financial services, transportation and warehousing, industrial equipment, and sales, marketing and support sectors.