UAE looks to lure more financial services, AI and pharma firms

Emirates aims to further simplify processes for companies to set up base

Mohamed Alsuwaidi, Minister of Investment, speaking at the Investopia conference in Abu Dhabi on Wednesday. Victor Besa / The National

The UAE is increasing efforts to attract investments in financial services, pharmaceuticals, technology and manufacturing, Minister of Investment Mohamed Alsuwaidi said on Wednesday. It also aims to further simplify processes for companies to set up base in the Emirates.

Financial services "is the space that has a huge amount of growth and potential", Mr Alsuwaidi told the Investopia conference in Abu Dhabi.

“We are still far behind where we would like to be in financial services," he said. "For me, there's definitely significant room to grow there, whether it's in the asset management business, whether it's in the insurance business, whether it's even in the banking and whether it's technology or FinTech or so on."

Other sectors that are top priority for the Arab world’s second-largest economy will be pharmaceuticals, biosciences, drug discovery, medical devices, manufacturing, artificial intelligence and data centres.

“The second space that we can't ignore, which, I think, is worth heavily pushing for, is the pharmaceuticals and the drug discovery and biosciences and medical devices," Mr Alsuwaidi, who is also the managing director and group chief executive of ADQ, said.

"The UAE has cut a significant path into innovation and [is] spending a lot of time, whether it's on genome sequencing or creating centres for research and development, all of which will lead to more discovery around drugs."

His comments come as the UAE aims to double cumulative foreign direct investment to Dh1.3 trillion ($354 billion) by 2031 amid its economic diversification push.

The Emirates attracted $30.68 billion of FDI inflows in 2023, an annual growth of 35 per cent, the UN Conference on Trade and Development stated in its 2024 World Investment Report in June. FDI outflows from the country stood at $22.3 billion, compared with $24.8 billion in 2022.

The country was also ranked in the Unctad report as the second-largest market after the US for greenfield foreign direct investment in 2023, as it continues to boost business with investor-friendly policies. Greenfield FDI involves a company establishing operations in another country by building new structures from the ground up.

Manufacturing is a “growing space” and there are opportunities in the sector along with technology, artificial intelligence and renewable energy, Mr Alsuwaidi said.

He added that robotics and support around that will be "a big opportunity" for the UAE, along with associated sectors including AI and technology.

“The companies law ... still has a couple of areas that need improvement, and that's something we're working on, simple things that come from a bit of legacy that we need to continue to change,” Mr Alsuwaidi said.

In 2020, the UAE overhauled its commercial company ownership laws, eliminating the need for an Emirati shareholder for onshore companies to operate, opening up sectors to foreign investors in a bid to attract more investment.

Economy Minister Abdulla bin Touq says the UAE's economy has been growing despite global challenges. Victor Besa / The National

“I think, a repository of information available and consistency in terms of delivering data to our investors is important and that's one of the things we're trying to address," Mr Alsuwaidi said. "We're working with the Ministry of Economy and Finance and everyone involved to try and make sure we can put out the latest data so that people can actually get a pulse of what's happening in our market.”

Non-oil sector boost

The UAE’s economy continues to grow despite challenges globally and recorded an annual growth of 4.7 per cent in the past five years, with non-oil sector growing by 6 per cent annually, Economy Minister Abdulla bin Touq said.

“UAE is not only a magnet for global capital ... but also a dynamic hub where risk is transformed into reward,” Mr bin Touq said, while speaking at Investopia.

The UAE economy grew by 3.6 per cent annually in the first half of 2024, to Dh879.6 billion, while non-oil GDP increased by 4.4 per cent annually to reach Dh660 billion, contributing 75 per cent to the total, the Ministry of Economy said in December.

The economy's success is built on long-term partnerships, a commitment to innovation and investing in people and these "values are at the heart of Mubadala", the sovereign wealth fund's managing director and group chief executive, Khaldoon Al Mubarak, said.

"Whether it's leading the way in clean energy through Masdar, advancing the frontiers of artificial intelligence with MGX, or delivering world class healthcare through M42, we are developing solutions to the most stressing global challenges," he added in a video message.

Abu Dhabi set up technology investment company MGX last year to expedite the development of AI and other advanced technology. Mubadala Investment Company was the world’s largest sovereign wealth fund investor in 2024, outpacing Saudi Arabia’s Public Investment Fund.

Last year, Mubadala and its subsidiaries deployed $29.2 billion, up from $17.5 billion in 2023, industry specialist Global SWF said in its annual report in January. The investments were made across 52 deals, a 67 per cent increase on the previous year.

UAE and Turkey investments grow

The UAE and Turkey's investment ties are growing following the signing of a Comprehensive Economic Partnership Agreement two years ago, according to Burak Daglioglu, president of the Investment Office of the Presidency of Turkey.

Burak Daglioglu, president of the Investment Office of the Presidency of Turkey. Victor Besa / The National

Last year, UAE companies invested almost $500 million in Turkey, while Turkey made investments worth $600 million in the UAE, Mr Daglioglu told The National in an interview on the sidelines of the conference.

"The UAE is hub to Asia and when we look at Turkey, it is at the nexus of three continents – Europe, Asia and Africa. And investors can reach out to the markets in Europe, Northern Africa and Central Asian countries."

UAE companies are investing in digital and manufacturing in Turkey, while Turkish investments in the UAE span sectors including property, infrastructure and manufacturing.

Last year, the UAE telecoms and technology company e&'s digital transformation arm, e& enterprise, completed the acquisition of Turkish digital firm GlassHouse in a $60 million deal.

"This momentum will continue because we have a strong pipeline of projects and both countries are enjoying a strong economic partnership," Mr Daglioglu said.

His country has also been holding talks for a GCC-Turkey free trade agreement and the last round of discussions have been completed, he said, but did not reveal when the deal is likely to be signed.

The Turkish economy is expected to grow 3.5 per cent this year after expanding 3 per cent last year, Mr Daglioglu said, adding that inflation is on a downward trajectory.

Turkey abandoned President Recep Tayyip Erdogan's low interest rates policy last summer and started raising rates to bring down inflation. The move resulted in Moody's Investors Service upgrading Turkey's sovereign credit rating in July, the first such rating action in more than a decade, citing improvements in governance and economic policies.