UAE to attract more FDI after removal from EU's AML, CTF list
An IMF study shows that countries delisted from high-risk financial jurisdiction lists often experience a surge in capital inflows — up to 7.6 per cent of GDP — and a 3 per cent rise in FDI. Reflecting this trend, the World Investment Report highlighted a 49 per cent jump in FDI to the UAE last year, reaching $45.6 billion.
Khaled Mohamed Balama, governor of the Central Bank of the UAE (CBUAE) and chairman of the National Committee for Anti-Money Laundering and Combatting the Financing of Terrorism and Illegal Organisations, emphasized that the EU's decision underscores the UAE's firm commitment to addressing financial system risks. 'This priority strengthens the UAE's competitiveness and supports its ongoing development journey,' he stated.
Atik Munshi, managing partner at FinExpertiza UAE, noted that being removed from the EU's high-risk list offers multifaceted benefits for the UAE's economy, including enhanced reputation, increased trust, and greater investor confidence. 'This move will boost FDI not only from the EU but globally, as investors face fewer compliance hurdles due to reduced country risk, making investments easier to manage,' he explained.
Hamza Dweik, head of trading at Saxo Bank MENA, said the decision further cements the UAE's role as a trusted global financial hub. 'The EU's recognition bolsters the country's credibility as a transparent and well-regulated jurisdiction. It also improves access to European markets, with EU financial institutions encountering fewer compliance barriers when dealing with UAE-based entities, facilitating smoother cross-border transactions and partnerships.'
Dweik anticipates that the UAE will attract more international banks, fintech firms, and asset managers seeking a stable and compliant environment. 'Anti-money laundering and counter-terrorism financing compliance are key risk factors for investors. The EU's endorsement significantly reduces perceived regulatory and reputational risks, boosting confidence among institutional investors, sovereign wealth funds, and multinational corporations,' he added.
Sectors set to benefit
Dweik highlighted that this development will ease the flow of funds into high-potential sectors such as real estate, technology, logistics, and green energy, particularly in transactions between the UAE and the European Union.
Vijay Valecha, chief investment officer at Century Financial, outlined several benefits: 'Capital flows between Wall Street banks and UAE regional banks will become more seamless, attracting further foreign direct investment and business opportunities. Compliance costs will decrease, and investor confidence will strengthen. Importantly, this will unlock the full potential of the EU-UAE partnership, which previously faced increased scrutiny.'
He added that European institutions will feel more confident working with UAE clients without the additional AML checks and expenses beyond standard due diligence.
'This will reduce delays, paperwork, and costs, benefiting banks, fintech firms, startups, and trade finance entities by enabling faster cross-border flows and client onboarding.'
Valecha expects increased European investment in real estate—especially in luxury, commercial, and branded residential projects—along with growth in retail and e-commerce fueled by smoother cross-border payments and rising investor interest.
Rania Gule, senior market analyst for Mena at xs.com, predicted that sectors such as fintech, green finance, high-end real estate, artificial intelligence, and advanced manufacturing will attract more investment, aligned with the UAE's economic diversification and post-oil national vision.
Improved credit rating prospects
Gule also noted that the delisting is likely to strengthen international banking relationships and ease cross-border financial transactions between the UAE and European banks. This will reduce operational costs for UAE-based companies and improve the speed and efficiency of financial dealings.
'The decision should simplify compliance procedures for trade with European firms, boosting UAE exports in non-oil sectors like technology, precious metals, and financial services,' she said. 'It may also positively impact future credit rating evaluations by agencies such as S&P and Moody's, reflecting lower perceived regulatory and financial risks. This, in turn, will support further FDI inflows in the coming quarters.'
Paul Turner, senior executive officer at Naga, added that the delisting serves as an independent validation of the UAE's reforms, enhancing market confidence and cementing its position as a safe and transparent global financial hub.
'Strategically, it could accelerate trade negotiations between the UAE and the EU, unlocking the potential for a deeper trade and investment partnership,' he concluded.
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