Dubai’s foreign direct investment flows soared 26 per cent in the first half of this year to $4.84 billion (Dh17.76bn), in a firm sign that diversification efforts and support for start-up companies are bolstering the emirate's economy.
The number of FDI projects also surged 40 per cent to 248, according to data from the Dubai Investment Development Agency, which is part of the emirate’s Department of Economic Development.
"The rise in FDI capital and projects reinforces Dubai’s leading position as the preferred global location for global businesses and startups pursuing growth and expansion and clearly reflects investor confidence in Dubai’s economy,” said Sheikh Hamdan bin Mohammed bin Rashid, Crown Prince of Dubai and chairman of the Executive Council, in a statement.
The Dubai government has taken a number of steps to attract more foreign investment, relax regulations and lower the cost of doing business. The UAE has also announced plans to grant permanent residency under certain conditions and issue 10-year visas to help attract more investors and entrepreneurs to the country.
Jihad El Eit, founder and chief executive of the restaurant chain Man'oushe Street, said entrepreneurs and start-ups have seen the benefits - such as waiving fees and relaxing regulations - first hand.
“We believe it is much cheaper to start a business than three years ago and the investment environment is much better because of the cost of doing business," he said.
"Today the government is making a lot of incentives for people to do business, things we haven’t seen before, such as cancelling guarantees for labour insurance and supporting trade licences."
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Mona Ataya, founder and chief executive of Mumzworld, a Dubai online retailer for mother and baby products in the Middle East, said more companies are choosing the city as their base.
"Dubai's central location is perfect and at strategic arms lengths to east and west. It connects MENA, Asia, Africa and Europe. Its outstanding location makes accessing suppliers, distributors, and brands so easy," said Ms Ataya, whose company raised $20 million in its latest funding round.
"Dubai and the UAE are known to be safe haven in the region, with the best security in place, making life easier for businesses, and making it safer to attract talent from around the globe and from the region.
"Due to Dubai's very strategic location, and outstanding business environment, Mumzworld, has been able to grow and attract investment."
She also said that the "quality of life and diverse population" makes it easier to hire and retain talented professionals.
New figures released on Saturday also showed that strategic projects made up 56 per cent of total investments, according to government data.
The US, India, Thailand, Spain and the UK led the list of source countries for FDI capital, while the US, France, UK, India and Switzerland held the top spots for investment projects.
“FDI flows in the first half of 2018 reaffirm the sustained growth of Dubai economy, and the diversity, competitiveness and attractiveness of the emirate,” said Sami Al Qamzi, director general of the DED.
Last year, Dubai attracted Dh23.7bn in FDI flows, a 7 per cent increase from 2016.
Fahad Al Gergawi, chief executive of Dubai FDI, said he was “confident about the future prospects for enhancing FDI flows, especially following the issuance of new laws that enhance Dubai's competitiveness as a preferred global destination for investment".
He said new laws that allow 100 per cent foreign ownership of companies and 10-year residency visas are key to attracting investors, professionals and top-performing students.