Dubai leads in attracting new FDI projects in the UAE
According to Emirates NBD Research, The UAE attracted 613 greenfield FDI projects during the period, with total capital inflows reaching $5.42 billion.
Sharjah emerged as the second-largest recipient with 24 projects valued at $1.47 billion, notably attracting high-value investments with an average project size of $61.1 million. Abu Dhabi secured 42 projects worth $595.8 million, while Ras Al Khaimah attracted six projects valued at $188.6 million.
The United Kingdom emerged as the leading source of greenfield FDI projects with 120 projects, followed closely by India (101 projects) and the United States (94 projects). However, in terms of capital investment value, Kuwait led with $955.7 million from just three projects, driven by the $953 million investment of Kuwait Real Estate Company in a mixed-use real estate development in Sharjah. The United States ranked second in capital investment with $889.5 million across 94 projects, while India came third with $677.9 million from 101 projects. China contributed $413.2 million through 16 projects, and Italy invested $387.6 million across 18 projects.
The business services sector led in the number of greenfield FDI projects with 183 projects, representing 30 per cent of total projects. Within this sector, professional services, consulting, and waste management services were the major contributors. Software and IT services came second with 108 projects, driven primarily by the expansion of global technology companies establishing regional operations in the UAE. The financial services sector followed with 65 projects, reflecting the UAE's growing status as a regional financial hub.
Transportation and warehousing secured 42 projects, while industrial equipment attracted 39 projects.
Despite having only 29 projects, the real estate sector attracted the highest capital investment at $1.05 billion, accounting for 19 per cent of total FDI inflows. This was largely driven by the major mixed-use real estate development project from Kuwait. Transportation and warehousing came second with $770.4mn, followed by business services ($687.2 million), communications ($359.5 million), and software & IT services ($298.9 million).
Manufacturing activities accounted for $1.06 billion of total FDI inflows, despite having only 22 projects. 'This reflects the UAE's strategic focus on attracting high-value manufacturing operations, particularly in automotive, chemicals, and advanced materials sectors,' said Mayed Al Rashdi, Economics Research Manager at Emirates NBD.
Construction projects, though limited to three major developments, attracted $1.12 billion in investment. Sales, marketing, and support functions dominated in terms of project numbers with 217 projects, though with relatively lower capital investment of $500mn. Business services activities attracted 282 projects worth $418.4mn. 'The establishment of 34 new regional headquarters with investments totaling $386.1 million underscores the UAE's growing importance as a regional business hub,' Al Rashdi said.
Simultaneously, the environmental technology sector saw notable momentum. A strategic partnership between Greenthesis Group and Beeah was announced to establish the Middle East's first polyethylene (PE) film recycling facility in Sharjah. This initiative supports the UAE's Net Zero 2050 agenda by reducing landfill dependency through innovative waste-to resource technologies.
Free zones attracted $1.62 billion (29.9 per cent of total FDI) across 107 projects in H1 2025, demonstrating their strategic importance despite hosting only 17.5 per cent of total projects. This concentration of high-value investments underscores free zones' appeal for capital-intensive operations.
The investments reveal free zones' effectiveness in attracting manufacturing and logistics investments. 'While accounting for less than one-fifth of projects, free zones captured nearly one-third of total capital investment, with average project sizes significantly exceeding non-free zone investments. Free zones' 100 per cent foreign ownership, tax exemptions, streamlined licensing, and world-class infrastructure continue to prove particularly attractive for manufacturing, technology, and logistics sectors - key pillars of the UAE's economic diversification strategy,' Al Rashdi said.
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