Inward FDI in the United Arab Emirates and its policy context

Abstract

Inward foreign direct investment (FDI) is important in building a sustainable and diversified economy as envisaged by the United Arab Emirates (UAE). The UAE’s stock of inward FDI (IFDI) grew at an average annual growth rate of 49%, from US$1.1 billion (1.5$ 85.4 billion (23.7% of GDP) in 2011. Many foreign multinational enterprises (MNEs), including several Fortune 500 companies -- have established affiliates in the country. The rapid growth of IFDI reflects confidence in the UAE economy and efforts to enhance its competitiveness. The recent global crisis has, however, significantly reduced IFDI flows. Efforts are under way to speed up the ratification of a new foreign investment law, which removes several of the current legal barriers to FDI and offers foreign investors similar rights to hose of UAE nationals