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24 May 2024

Dubai ranks 7th largest foreign investment destination city in the world

By Wam

Dubai has attracted AED25.5 billion in foreign direct investments in 2016, making it the seventh highest recipient city of Foreign Direct Investment, FDI, in the world, according to a report by the Dubai Government. These results are expected to inspire other cities seeking greater FDI at the forthcoming Annual Investment Meeting, AIM, to be held at the Dubai World Trade Centre from 9th-11th April 2018.

Total FDI into Dubai stood at AED270.8 billion between 2011 and 2015 and in 2016, the emirate ranked 7th among the leading cities of the world attracting AED25.5 billion in FDI. As an open economy, Dubai is affected by global trends but FDI receipts are expected to recover in 2017-2018, a report by Dubai Economy, said recently.

The number of active businesses in Dubai increased to 148,842 in 2017, including 19,877 new trade licenses issued in 2017, according to the Dubai Economy, the trade licensing body of Dubai Government. Renewal of licenses accounted for 128,965 transactions in 2017 while there were also 26,029 Initial Approval transactions and 38,223 Trade Name Reservations. Auto Renewals constituted 47,125 transactions, Instant Licenses 684, and e-Trader licenses 616.

Dawood Al Shezawi, Chief Executive Officer of AIM Organising Committee, said, "Dubai remains a shining example of what a city could achieve through economic vision and by attracting foreign investment. Guided by a strong leadership, the public and private sectors worked hand in hand to deliver the best return on investment in key sectors – trade, tourism, real estate and retail sectors – that continues to draw a large pool of foreign capital that is helping creating employment and business opportunities for all stakeholders.

"As we inch closer to the forthcoming AIM hosted by Dubai, more and more public policymakers and international investors will take notice of Dubai’s business model and its success stories to help build other economies.

"In this way, Dubai inspires the rest of the world’s cities and metropolises to attract greater foreign investment."

Dubai Government expects its AED376.8 billion, or US$102.67 billion, economy to grow at 3.5 percent in 2018.

In terms of openness, Dubai ranks third in the world after Luxembourg and Hong Kong, with a high degree of dependence on foreign trade for income. Dubai's openness ratio was 321 percent in 2016, meaning that trade flows were more than three times higher than the net value added in the economy.

Diversification and a relatively high degree of openness in Dubai along with the positive impact of global trends will boost economic growth in the emirate in 2018 and beyond, according to the Dubai Economic Outlook report. Dubai will achieve 3.5 percent growth in 2018, also drawing on the continued recovery in global trade and the highest growth rates in most developed economies.

Among the new licenses issued in 2017, business women owned 12 percent of the new businesses. The top nationalities among the new license holders were Indians, Pakistanis, and Egyptians, followed by Saudis, Britons and GCC nationals. Saudis ranked second in terms of market share, followed by Omanis, Kuwaitis and finally Bahrainis in that order.

"This reflects the wider mix of global investor base investing in Dubai, which is a great example how the emirate appeals to wider nationality," Al Shezawi added. "Dubai’s attractiveness in drawing foreign investment will remain a key subject of discussions at various levels amongst more than 19,000 delegates and visitors."

Among the new licenses issued in 2017, more than 64.3 percent were Commercial, 33.8 percent Professional, 1.1 percent Industrial and 0.9 percent belong to the Tourism sector. The outsourced service centres of Dubai Economy played a major role in service delivery accounting for almost 80 percent of all the business registration or 231,902 of the total transactions in 2017.

The total value of Dubai's trade in non-oil goods was AED1.28 trillion, US$348.77 billion, in 2016. Dubai’s imports are much more than its total exports as most imports are transported to other emirates and to neighbouring countries without them being registered as re-exports.