Dubai retains global top spot for attracting greenfield FDI projects

Dubai retained its top spot globally (in 2022) for the second successive year attracting greenfield FDI projects, according to the latest data from the 2022 Financial Times’ fDi Markets report — considered the most comprehensive online database on cross-border greenfield investments.

The emirate achieved 89.5 per cent year-on-year growth in total announced FDI projects in 2022, while total FDI capital surged 80.3 per cent over the same period, further consolidating the emirate’s status as one of the top three global cities, a key goal of the Dubai Economic Agenda D33 launched by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, according to a report by the Dubai Media Office.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and chairman of Dubai Executive Council said: “Dubai’s ability to secure the No. 1 global ranking for greenfield FDI projects for the second year in a row demonstrates its ability to sustain its compelling investment value proposition even at a time when the worldwide economy is facing headwinds.

“Over the years, Dubai has forged dynamic partnerships with global investors to accelerate innovation and create enduring economic value. Dubai leads the world in attracting FDI in a wide range of industries, especially future-oriented sectors, a fact that is a testament to the strategic vision articulated in the Dubai Economic Agenda D33, which aims to consolidate Dubai’s position as one of the world’s top urban economies.”

fDi Markets data for 2022 showed that Dubai continued to lead and enhance its leadership position across key FDI attraction metrics.

The emirate ranked first in attracting FDI projects into tourism, business services, financial services, transport and warehousing, consumer products, and software and IT services sectors.

Dubai maintains global FDI ranking due to initiatives launched

The emirate also emerged as the 2022 world leader in attracting FDI projects in the creative industries cluster, in research and development projects, and in attracting FDI project headquarters by hosting international companies’ global and regional headquarters.

Helal Saeed Almarri, director general of the Department of Economy and Tourism, said: “Our strategy to further consolidate the city’s position as one of the top three global cities, in line with the Dubai Economic Agenda, D33, is again strengthened by the achievement of attracting and stimulating FDI and reflects the confidence investors, multinational companies, start-ups, and global talent have in Dubai. The growth of the city’s share in global greenfield FDI projects clearly indicates our strategy’s effectiveness and also highlights the city’s position as the capital of the global digital economy and a hub for innovation and technology, further ensuring that increasing FDI inflow remains a top priority and key goal of the D33 Agenda.”

Helal Saeed Almarri, Director General of @DubaiDET: #Dubai’s leading global FDI ranking underpins a comprehensive framework of initiatives that were launched to further strengthen the city’s business and investment environment, based on the directives of @HHShkMohd.

— Dubai Media Office (@DXBMediaOffice) May 14, 2023

Overall in 2022, the emirate ranked seventh globally in attracting greenfield FDI capital and fifth globally in FDI jobs.

From a MENA perspective, the emirate ranked second in FDI capital and first in FDI jobs.

Compared to 2021, greenfield FDI (wholly owned) and new forms of investments increased by 6 per cent in 2022.

The emirate’s share in attracting global greenfield FDI projects reached 4 per cent, an increase of 1.9 per cent compared to 2021, with a record 837 projects enabling the city to achieve the highest growth in global shares across the past seven years, according to data fDi Markets.

The emirate attracted a total of 1,173 FDI projects in 2022.

Dubai FDI Monitor’s data also revealed that the total estimated FDI capital flowing into Dubai in 2022 was Dhs47bn ($12.8bn) compared to Dhs26.07bn in 2021.

An estimated 38,447 jobs were created in Dubai in 2022 compared to 24,932 jobs in 2021.

The top five source countries for FDI projects accounted for 54 per cent of the total in 2022, split among the US (20 per cent), the UK (13 per cent), India (12 per cent), France (5 per cent), and Switzerland (4 per cent).

Additionally, the top five source countries for FDI capital accounted for 72 percent of the total estimated flows into the emirate in 2022, split among Canada (41 percent), the UK (12 per cent), the US (11 per cent), India (4 per cent), and Switzerland (4 per cent).

The top five sectors – transportation and warehousing, hotels and tourism, renewable energy, software and IT services, and consumer products – accounted for 76 per cent of the total estimated flows into Dubai and 68 per cent of announced FDI projects — the transportation and warehousing sector led the pack with a dominant 45 per cent share of FDI capital.

The FDI Monitor data also revealed that the top five business functions accounted for 78 per cent of total estimated flows into Dubai, while 93 percent accounted for the total announced FDI projects in 2022.

Business services also remained a prominent business function based on FDI projects and FDI capital in 2022.

Types of FDI by projects

Compared to 2021, the emirate leads the world in a number of important metrics as a result of attracting different types of FDI projects and capital, including greenfield FDI and new forms of investments: mergers, acquisitions, reinvestments, VC-backed FDI, and greenfield joint ventures.

Complementing the 2022 increase in FDI capital, the hotels and tourism sector, and the software & IT services sector contributed to growth in total estimated jobs created through FDI.

High and medium-tech FDI projects accounted for 63 per cent of the projects recorded in this sector in 2022.