Dubai retains position as top global destination for FDI projects in first half of 2023

The emirate achieved 70 per cent year-on-year growth in total announced FDI projects between January and June of this year

Dubai achieved 70 per cent year-on-year growth in total announced FDI projects in the first half of 2023. Reem Mohammed / The National

Dubai retained its position as the world's top destination for attracting greenfield foreign direct investment projects in the first half of this year, cementing its position as a worldwide FDI hub despite global economic headwinds, a report has found.

The emirate, the tourism and commercial centre of the Middle East, attracted 511 greenfield projects during the period, surpassing second-placed Singapore by 325 projects, Dubai Media Office said, citing Financial Times fDi Markets data.

During the first half of this year, Dubai’s global share in the attraction of greenfield FDI projects stood at 6.58 per cent – up from 3.83 per cent over the same period last year.

The emirate attracted a total of 880 announced FDI projects between January and June of this year, achieving 70 per cent year-on-year growth.

Dubai’s greenfield FDI projects accounted for 65 per cent of total announced FDI projects during the period.

The emirate climbed from eighth to sixth position globally in greenfield FDI capital attraction with an inflow of Dh20.87 billion ($5.68 billion) between January and June this year, Financial Times fDi Markets data said.

“Dubai’s ability to maintain its top ranking in attracting Greenfield FDI projects reflects the city's ability to create unparalleled growth opportunities and value for global investors,” said Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and Chairman of the Executive Council.

“With the clear growth road map set out by the Dubai Economic Agenda D33, we continue to work to create an investment environment that not only wins the trust of investors from all over the world but also encourages them to contribute to Dubai’s transformation.”

Dubai attracted a total of 880 announced FDI projects between January and June this year, a year-on-year growth of 70 per cent.

Dubai's economy has bounced back strongly from the coronavirus-driven slowdown in 2020.

Travel and tourism

The emirate’s gross domestic product has maintained strong growth momentum since, driven by a strong recovery in travel and tourism, and retail sectors.

Dubai strengthened its status as a major global economic centre in the first half of 2023, continuing to perform strongly across sectors from tourism to property, Sheikh Hamdan said in July.

Dubai’s economy grew an annual 2.8 per cent in the first quarter of the year to Dh111.3 billion ($30.3 billion), extending the “robust momentum of growth” achieved in 2022, as stated by government data released in August.

The emirate's economy expanded by 4.4 per cent last year and is forecast to grow by 3.5 per cent in 2023, Emirates NBD said.

The emirate's trade sector grew by 1.2 per cent in the first three months of the year from the same period in 2022, injecting Dh25.5 billion into the economy.

Business activity in Dubai's non-oil private sector economy maintained a “robust” rate of expansion in August, although at a slower pace, supported by an increase in new orders, with the pace of job creation at its highest in about eight years, S&P Global purchasing managers’ index released last month said.

Dubai rose from ninth in the first half of last year to fourth place globally in the first half of this year in employment creation from FDI projects, the fDi Markets data showed.

The top five sectors bringing FDI capital into Dubai were financial services (52 per cent), business services (12.8 per cent), software & IT services (7.5 per cent), real estate (6.9 per cent) and F&B (3 per cent).

These top five sectors accounted for 82 per cent of total FDI capital inflow and 70 per cent of total FDI projects.

“As we work to enhance the city’s competitiveness and business environment internationally, these strong increases in announced FDI projects for [the first half of] 2023 drive home how our progressive policy enablers and diverse attraction programmes are resonating with global investors and decision makers alike,” Helal Almarri, director general of the Department of Economy and Tourism, said.