UAE FDI continues to move forward

Slew of initiatives ensure country remains attractive to global investors

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Published: Wed 8 Nov 2023, 9:30 PM

Foreign Direct Investment (FDI) flow into the UAE recorded a 10 per cent growth to $22.73 billion – a record high for the country – compared to $20.66 billion in 2021, that has given the UAE a fresh impetus to establishing a new Ministry of Investment, which will coordinate and streamline the investment process across all the emirates and the free zones. This is a new record for the UAE that has pushed the UAE’s FDI stock to $194.30 billion in 2022, up from $171.56 billion in 2021. This puts the UAE 16th in the global rankings for FDI attraction, a climb of six places compared to 2021.

His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, recently announced the creation of the new Ministry of Investment, saying, “The aim of the new ministry is to develop the country’s investment vision, stimulate the investment environment internally and continuously enhance the competitiveness of our procedures and legislation to ensure that the country remains a global destination for investment and a major player in the global investment movement.”

Mohammed Hassan Al Suwaidi has been named to become the investment minister.

Investment into the UAE is guided by a number of government departments, economic zones, industrial zones where rules and regulations and fees varies from each other. The UAE Ministry of Economy had earlier created a National Economic Registrar (NER) to first create an integrated database for all the businesses registered in the UAE. The UAE has more than 750,000 active businesses that make up the private sector of the country. Cost of business license could range from as low as Dh3,500 ($950) to Dh35,000 ($9,500) for a General Trade License.

However, business licensing is just one part of business expansion, relocation or investment plan in a new destination such as Dubai, not everything. Investors face the real issues after getting the business license in order to get going. As of mid-2022, the number of Small and Medium Enterprises (SMEs) in the UAE was 557,000. SMEs contribute as much as 63.5 per cent to the non-oil GDP. It is forecasted that there will be 1 million SMEs in the UAE by 2030.

In the GCC, the UAE stands out in terms of attracting investment. FDI inflow of $22.73 billion into the UAE in 2022 represents 61.24 per cent of the total FDI inflow of $37.12 billion into the GCC in 2022, the records show.

Total FDI flow into the GCC region declined 17.91 per cent to $37.12 billion in 2022, down from $45.22 billion recorded in 2021, despite the UAE recording a 10 per cent increase in FDI to $22.73 billion in 2022, according to the World Investment Report 2023.

In terms of greenfield FDI projects, the UAE came in fourth after the United States, the United Kingdom and India, with 997 projects, a surge of 84 per cent year-on-year, according to the report. The UAE is the only country in the GCC region that experienced a constant growth in FDI inflows over the past five years. The new UAE Ministry of Investment will boost the country’s diversification efforts and attract $150 billion in FDI inflows by 2031 and ranking among the top 10 countries in terms of FDI inflows.

“The announcement to set up the Ministry of Investment is a very timely initiative that will transform, integrate and streamline the investment and business set-up processes and make these more hassle-free, that will help attract greater FDI in to the country and make business set-up easier. However, business set-up is the first and a small part of actually establishing a business to grow and the growth of a business needs greater efforts and collaboration and partnership between the authorities and the private sector,” Shaheenoor Shah, Chief Executive Officer of Emireum Business Services, says.

Shaheenoor Shah, Chief Executive Officer of Emireum Business Services

“Understanding the challenges that new businesses face in Dubai, we have introduced the Emireum Business Passport, a dedicated service proposition designed to provide them with the holistic support the investors need to succeed. With this package, they can focus on their core business activities while we take care of the rest.”

Last year, Dubai attracted an estimated $12.8 billion in foreign direct investment capital, based on the 2022 Financial Times “fDi Markets” report. Foreign direct investment into Saudi Arabia was about 30 billion riyals ($8 billion), based on data from the Saudi investment ministry.

The Emireum Business Passport is a cost-effective way for new businesses to access critical services without straining their budget. The Dh10,000 credit can be used to cover the cost of any of the services included in the package, and there are no hidden fees or charges. An investor needs an eco-system of support covering all aspects of business establishment, starting with investment consultancy, strategic plan, business license set-up, securing residency permit, Emirates ID card, leasing an office premises for business operation, opening a bank account, secure funding, talent hunting for new companies, accounting, VAT and taxation, marketing, public relations, as well as business development and business match-making services.

Emireum Business Services, a Dubai-based investment and business set up advisory, has began signing up foreign investors to its proprietary Emireum Business Passport – a holistic business set-up package to help new investors grow business effectively in the UAE, generate employment, wealth and contribute to the UAE economy.

Emireum Business Passport is a unique business start-up and loyalty package that gives new investors up to Dh10,000 in the form of service credits that the investors could use up for additional services and renewals, as a value addition to their business set-up activities in the UAE’s mainland and free zones.

The Emireum Business Passport package offers essential services, tailor-made to cater the client’s needs offering an additional credit facility of Dh10,000 that the client can avail for value-added services, or during the license renewal a year later. With this service, Emireum enters an untapped market in Dubai to provide end-to-end holistic facilities to new businesses.

The initiative, that will help domestic and foreign investors in getting value-added services, is in line with the UAE Government’s vision to support new investors that will help create jobs and accelerate the economic growth.

She says, “It is important to offer a holistic service proposition that take care of all the business needs of the investor who might be completely new in this part of the world. We offer one-stop service for all their needs, unlike most others in the market, and continue to do hand-holding for the investors till they get going.”