UAE emerges as top global greenfield FDI attractor

Khaleej Times

7 hours ago

In a resounding affirmation of its global investment magnetism, the UAE has once again reinforced its status as the world's most effective attractor of foreign direct investment (FDI), relative to its economic size.
According to the 2025 Greenfield FDI Performance Index by fDi Intelligence, the UAE topped the list — outperforming 104 other economies — with a remarkable index score of 14.26, meaning it secured more than 14 times the volume of greenfield FDI projects expected for its GDP scale.
This outstanding performance placed the UAE ahead of Namibia, Costa Rica and all other economies surveyed. Although project growth was modest at 1.8 per cent in 2024, the Emirates was still ranked as the second most popular FDI destination in the world, behind only the United States. The UK, India and Germany followed in third, fourth and fifth positions.
The inflows underline the country's expanding appeal as a global hub for business and innovation. According to the Unctad World Investment Report 2025, the UAE received Dh167.6 billion (about $45.6 billion) in FDI last year, representing a surge of 48 per cent compared with 2023. This elevated the country into the ranks of the world's top 10 recipients of foreign investment, despite the global slowdown. Within the Middle East, the UAE's dominance was striking — it accounted for nearly 37 per cent of the region's total inflows, more than a third of all foreign capital entering the Arab world.
Greenfield investment was a central driver of this success. The UAE attracted 1,369 projects in 2024, securing second place globally after the US. Capital commitments for these projects reached Dh53.3 billion ($14.5 billion), reflecting resilience in an environment where global growth in greenfield projects slowed to less than one per cent. Business services, financial services and technology remained the top sectors, while renewable energy, real estate, transport and consumer products also recorded strong momentum.
Investment consultants argue that the UAE's performance is more than a story of numbers. It is a narrative of transformation, built on foresight, ambition and the ability to execute. 'By combining stability, openness and innovation-driven growth, the Emirates have created an ecosystem that attracts capital, talent and ideas from every corner of the globe. At a time when global FDI is under pressure, the UAE has emerged not just as a regional hub but as a model for economies seeking to leverage investment as a catalyst for long-term prosperity,' said James Mathew, CEO and managing partner of UHY James.
Mathew added that the UAE's success is not a matter of coincidence but a reflection of long-term planning. 'The UAE has transformed foreign investment into a tool for economic diversification, reducing reliance on hydrocarbons and expanding its industrial, financial and knowledge-based sectors.'
The National Investment Strategy 2031 sets out an ambitious goal of increasing FDI inflows to Dh1.3 trillion and tripling cumulative stock to Dh2.2 trillion. This vision dovetails with other strategic blueprints such as Artificial Intelligence 2031 and Centennial 2071, which seek to embed technology and innovation across the economy.
These efforts have not gone unnoticed by global investors. In 2024, Microsoft announced the creation of a global engineering development centre in Abu Dhabi. This year, the company partnered with AI firm G42 to build sovereign cloud and artificial intelligence infrastructure. Such moves underscore the UAE's ability to attract not only capital but also high-value projects that anchor knowledge economies. Google's activities in the country alone contributed Dh21.8 billion ($5.9 billion) to GDP in 2024, while Microsoft's investments are projected to generate Dh273 billion in revenues and over 152,000 jobs by 2028.
Part of the UAE's enduring appeal lies in its enabling environment. Foreign investors benefit from a liberal business climate that allows 100 per cent ownership in most sectors, a competitive corporate tax rate of nine per cent, streamlined licensing procedures and robust arbitration mechanisms through institutions like the Dubai International Arbitration Centre. On the talent front, long-term Golden Visas and flexible Green Visas make it easier for skilled professionals and entrepreneurs to relocate and build futures in the Emirates.
The establishment of a federal Ministry of Investment in 2023, led by Mohamed Hassan Al Suwaidi, further centralised efforts to attract capital and promote opportunities. Digital platforms such as 'Invest UAE' provide global investors with a one-stop gateway into the country's diversified economy.
Equally important are the UAE's international agreements. The country has signed 21 Comprehensive Economic Partnership Agreements and over 120 bilateral investment treaties, ensuring that capital inflows are protected and integrated into global trade frameworks. Its nonaligned foreign policy also positions it uniquely as a bridge between East and West, maintaining investor confidence in a region often marked by volatility.
The trajectory over the past decade illustrates how far the Emirates have come. FDI inflows climbed from Dh31.6 billion ($8.6 billion) in 2015 to Dh167.6 billion ($45.6 billion) in 2024, representing a compound annual growth rate of more than 10 per cent. The country's cumulative FDI stock now stands at about $270 billion. Beyond capital, it has become a magnet for human capital — ranked fifth globally for overall talent competitiveness and third in AI talent generation in 2024, according to INSEAD and Stanford.