The UAE’s reform-driven advancement as a future-ready international investor hotspot received a reassuring vote of confidence as the nation bucked bleak global trends to record a phenomenal jump in foreign direct investment through 2020.
Economists and analysts believe that a 44.2 per cent FDI surge to Dh73 billion year-on-year, notwithstanding the headwinds during a pandemic-ravaged year, is an eloquent testimony to the Emirates’ growing appeal to global investors subsequent to a series of region-first reforms, including a landmark 100 per cent business ownership law and the 10-year golden visa rule.
The tweet “Good Crisis management is a guaranteed investment,” of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, on Saturday encapsulates the pragmatic and pioneering measures the nation’s visionary leadership had taken to achieve such a remarkable feat.
The record FDI jump not only proves that the UAE could buck the global FDI decline of 42 per cent estimated by the UN due to Covid-19 but also testifies to the nation’s growing status as one of the most sought-after global investor hubs.
As UAE Minister of Economy Abdullah bin Touq Al Mari noted, the investment landscape of the UAE has been steadily developing over the past years with the introduction of progressive measures that have earned the nation a coveted position internationally while leading regionally. Going forward, the UAE will have more measures to strengthen the investment landscape and grow investor confidence in priority sectors, he said.
According to US-based consultancy firm Kearney, the UAE jumped four places in an index that measures the confidence of foreign investors.
The UAE, ranking 15th, was one of only five countries globally that achieved a higher ranking in 2021 in an increasingly competitive global FDI attraction environment, Kearney said.
Last year saw Dubai in particular recording Dh24.7 billion worth of FDI in 2020 across 455 projects, according to data from the Dubai FDI Monitor released by the Dubai Investment Development Agency.
FDI flows in 2020 were mostly into the digital economy, including artificial intelligence, the Internet of Things, blockchain, medical know-how, augmented and virtual reality, robotics, self-driving automobiles, renewable energy, innovation and agritech, among others. The oil and gas sector was the busiest in attracting FDIs with Adnoc spearheading a number of big investment deals and partnerships.
In 2020, the cumulative balance of FDI inflows into the UAE grew to Dh639.1 billion, an increase of 12.9 per cent during the same period.
Shailesh Dash, a financier and entrepreneur, said the UAE has developed an ideal environment to attract foreign direct investment in key economic sectors over a period of time.
“The emirate has introduced various progressive measures to attract FDI inflows despite a challenging environment across the globe. The government is continuously working to further ease regulations and will soon unveil more policy measures, particularly in priority sectors, to improve its investment landscape,” he said.
“The UAE will remain on investment radar because of its strategic location, open economy and consistent policies. I’m confident of sustaining strong FDI inflows with the opening of more sectors in near future,” Dash told Khaleej Times.
Atik Munshi, managing partner at Enterprise House, said the UAE is amongst the few countries of the world which acted very rapidly to curb the Covid threat and is now a country with one of the highest rates of vaccinations.
“The business-friendly changes in legations, long-term visas, ease of doing business, UAE passport, low taxes, secured lifestyle and other positive features have catapulted Dubai and the UAE’s image as one of the most favored places to do business and reside and thus attracted FDI. The credit goes to the Rulers of the UAE who have turned a challenge to their advantage despite the odds,” said Munshi.
He said Dubai and the UAE have a further potential of attracting more FDI as a more pro-business environment and rules are expected to flow in years to come.
“The Make in UAE campaign is one such initiative to bring investments into the manufacturing sector,” he said.
Dr Lal Bhatia, chairman of Hilshaw Group, said a 44.2 per cent increase in FDI inflows may seem like an anomaly to the rest of the world, given the global sentiment during 2020, but to “me [and many like me], it simply resonates what we have believed and advocated since the beginning of the pandemic”.
He said the country’s management of the crisis displayed its ability to maintain “grace under fire” and “hold its own” under all circumstances just like Sheikh Mohammed aptly tweeted.
“The confidence instilled by the policies and actions of the UAE leadership have led the nation to this iconic position globally. However, we firmly believe that this is a mere reflection of things to come and we can firmly expect UAE to exceed this milestone in 2021,” Dr Bhatia said.
The game-changing investment law that came into effect from December 1, 2020, covers in its “positive list” 122 different economic activities. The has amended 51 articles of the Commercial Companies Law and added new ones, mostly focusing on the regulation of provisions of establishing companies with limited liability shareholding.
Activities in the negative list that will fall outside of the FDI regime include petroleum exploration and production; banking and financing activities; insurance; and telecommunications. In the case of activities not included on either list, authorities have discretion to allow up to 100 per cent foreign ownership.
Events to be staged at the DWTC, comprising diverse sectors including construction, energy, technology, beauty, food, healthcare, environment and automotive, will mark the emirate’s post-pandemic economic recovery
Local business2 months ago