According to the 2013 Global Investment Report published by the UNCTAD, the United Arab Emirates is the third largest FDI recipient in the West Asia region, behind Turkey and Saudi Arabia. The main investors are Britain, Japan and Hong Kong. In 2013, the UAE attracted $12b, the political and economic stability of the country attracting investors fleeing the revolutions of the "Arab Spring." The bulk of FDI is concentrated in the sectors of oil production, water and electricity production. The strengths of UAE is its easy access to oil resources, low energy costs, a willingness to diversify the economy and high purchasing power.
The absence of direct business taxation (excluding banks, oil companies and telecommunications operators) and direct income taxation, of exchange controls and of any limitations on the repatriation of capital, as well as the existence of a strong and profitable banking sector, plus a large pool of expatriate labor are the country's undeniable assets. Its main weakness is the small size of its domestic market.
|United Arab Emirates||Middle East & North Africa||United States||Germany|
|Index of Transaction Transparency*||4.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||7.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||4.0||9.0||5.0|
|Index of Investor Protection****||4.3||5.0||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||7,679||9,602||10,488|
|FDI Stock (million USD)||85,406||95,008||105,496|
|Performance Index*, Ranking on 181 Economies||87||-||-|
|Potential Index**, Ranking on 177 Economies||19||-||-|
|Number of Greenfield Investments***||373||328||316|
|FDI Inwards (in % of GFCF****)||10.0||11.4||12.1|
|FDI Stock (in % of GDP)||24.5||24.8||26.6|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
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Last Updates: October 2014