Greenfield investments in the UAE have seen a significant boost in 2023, driven by key sectors and international partnerships.
These investments were focused on business services, software, and IT services, which significantly contributed to job creation and capital inflows. Other sectors such as financial services, industrial equipment and transportation and warehousing also played crucial roles in this growth.
According to Mohammed Abdul Rahman Al Hawi, Under-Secretary of the UAE Ministry of Investment, these investments resulted in a 7.5% increase in job creation and a 31% rise in announced projects. Additionally, greenfield Foreign Direct Investment (FDI) capital inflows saw a 37% increase, totalling $16 billion.
Five key sectors dominate UAE’s FDI landscape, collectively accounting for 86% of total FDI stock. These include:
- Wholesale and Retail Trade: Contributing 26% of FDI stock, this sector benefits from the UAE’s strategic location and advanced logistics, with a 13% rise in consumer spending in 2023.
- Real Estate: Making up 24% of FDI stock, driven by urban development and global accessibility.
- Finance and Insurance: Representing 21% of FDI stock, supported by the UAE’s stable banking environment.
- Mining and Quarrying: Accounting for 8% of FDI stock, leveraging natural resources and supply chain positioning.
- Manufacturing: Contributing 7% of FDI stock, bolstered by the UAE’s industrial strategy, Operation 300bn.
Internationally, the UAE’s top FDI contributors include the UK, India, Saudi Arabia, the Netherlands, and China. The UAE has also signed six Comprehensive Economic Partnership Agreements (CEPAs) with countries like India, Turkiye, and Indonesia, along with 115 bilateral investment treaties and 146 double taxation agreements to enhance global economic relations.
“These agreements are a testament to the UAE’s strategic approach in positioning itself as a leading global hub for trade and investment,” noted Al Hawi.
Al Hawi also highlighted the UAE’s vibrant investment environment, attracting substantial greenfield investments from the US, India, the UK, France, and Saudi Arabia. The UAE’s global FDI presence, estimated at $2.5 trillion by early 2024, underscores its economic influence, particularly in emerging markets.
A landmark $35 billion agreement with Egypt to develop Ras Al Hekma exemplifies the UAE’s commitment to regional development. Once completed, UAE investments in Egypt are expected to reach $65 billion.
