Dubai Tops FDI Global Charts For The Third Consecutive Year
Leaving Singapore And London Trailing
Dubai, the Middle East’s default business and commercial capital, is the world’s leading foreign direct investment (FDI) hub for the third consecutive year, bypassing Singapore and London, respectively.
As per the Financial Times’ fDi Markets platform, Dubai, the Arabian Gulf emirate, not only secured the top spot in global greenfield FDI projects attraction in 2023 but also maintained this remarkable feat for the third consecutive year.
With an estimated AED39.26 billion ($10.66 billion) in FDI capital investment in 2023, Dubai has also emerged as the worldwide leader in attracting greenfield FDI projects in critical sectors such as consumer goods, energy, e-commerce, and tourism for capital inflow and job creation. Greenfield investment involves a parent company establishing a subsidiary in a different country and building its operations from scratch, showcasing Dubai’s ability to attract new businesses and foster economic growth.
In 2023, Dubai registered 1,070 global greenfield FDI projects, significantly outstripping its closest competitor, Singapore.
With an astounding 142% more projects than second-placed Singapore and a staggering 148% more than third-placed London, Dubai’s global share in attracting FDI projects has more than tripled in the past five years, soaring from 1.7% in 2019 to an impressive 6% in 2023.
Robust Growth
Guided by the Dubai Economic Agenda D33 objectives, Dubai’s stellar performance in global FDI indicates the emirate’s appeal to international investors and its promising economic growth trajectory.
Utilising data and insights from the Financial Times, fDi Markets is the premier online repository of cross-border greenfield investments, encompassing every nation and industry globally. The platform features real-time investment initiatives, capital infusions, and employment generation tracking, providing comprehensive insights into global investment trends and opportunities.
fDi Markets monitors cross-border investments involving establishing new physical projects or expanding existing assets, resulting in fresh job opportunities and capital injections.
The platform’s tracking system exclusively encompasses joint ventures that culminate in the initiation of new physical operations. However, mergers & acquisitions (M&A) and other equity investments do not fall under its purview.
Additionally, there is no minimum project size threshold for inclusion in fDi Markets’ comprehensive database.
Favoured HQ Destination
Meanwhile, underlining its allure as a preferred destination for multinational companies’ headquarters, Dubai has taken the top position globally for HQ FDI projects for the second consecutive year, attracting an impressive 60 projects in 2023.
This feat further solidifies Dubai’s standing as a global economic powerhouse, with Singapore and London trailing in second and third place, respectively.
His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, has hailed Dubai’s achievement in retaining its top FDI ranking for the third consecutive year.
He stressed the emirate’s commitment to generating new opportunities for global businesses. He highlighted the pivotal role of growing FDI inflows in driving the objectives of the Dubai Economic Agenda D33, which aims to double the emirate’s economy by 2033.
Dubai’s remarkable FDI performance in 2023, as showcased by the latest Dubai FDI Monitor data, reflects a robust growth trajectory across various sectors.
1,650 FDI Projects
According to Dubai FDI Monitor, the emirate recorded 1,650 announced FDI projects in 2023, a substantial 39% growth compared to the 1,188 FDI projects in 2022.
These projects included greenfield FDI, new forms of investments (NFIs), mergers and acquisitions (M&A), reinvestments, venture capital (VC)-backed FDI, and greenfield joint ventures.
The Dubai FDI Monitor data also revealed a significant upswing in job creation through FDI in Dubai, increasing by 15.5% year-on-year to 44,771 total estimated jobs. This growth was driven primarily by the retail, business services, and manufacturing sectors.
Dubai FDI Monitor is an initiative of the Dubai Department of Economy and Tourism.
In the technology sector, the percentage of high—and medium-tech projects in Dubai was 58% in 2023, measured by a share of total FDI.
Trending Hi-Tech Sectors
Dubai remained the top destination globally across several key technologies, with artificial intelligence (AI), fintech, cloud computing, and cybersecurity featuring prominently. The emirate also placed first for the estimated number of jobs created by e-commerce investments.
According to UN Trade & Development, global FDI flows in 2023, at an estimated AED5.04 trillion ($1.37 trillion), showed an increase of 3% over 2022. Yet, excluding a few prominent European deals, global FDI flows were 18% lower. In line with global FDI flows, Dubai attracted an estimated AED39.26 billion ($10.66 billion) in total FDI capital during 2023.
Dubai FDI Monitor data revealed that the top five source countries by FDI capital accounted for 66.6% of the total estimated flows into Dubai in 2023, while for FDI projects, the top five source countries accounted for almost 55.7% for the same period.
Canada Leads
Canada is among the top five source countries for FDI capital due to one large M&A deal: Canada-based Brookfield Business Partners acquired Network International for AED10.01 billion ($2.76 billion).
The top five source countries by total estimated FDI capital into Dubai in 2023 were Canada (26.5%), the United States (17.5%), Saudi Arabia (8.9%), the United Kingdom (8.2%), and India (5.5%). The top five source countries based on total announced FDI projects were the United States (15.5%), the United Kingdom (15.3%), India (14.9%), France (6.3%), and Italy (3.6%).
According to Dubai FDI Monitor data, five sectors accounted for 67.6% of the total estimated FDI capital flows into Dubai in 2023 and 69.3% of the total announced FDI projects.
Financial Services Top
The top five sectors by total estimated FDI capital were financial services (29.1%), business services (19%), consumer products (9.2%), software and IT services (6%), and textiles (4.3%). In contrast, the top sectors by total announced FDI projects were business services (22.8%), food and beverages (14.3%), software and IT services (14.1%), consumer projects (9.5%), and textiles (8.6%).
Financial and business services recorded significant increases in FDI capital and the number of FDI projects, respectively, indicating a clear preference for service-oriented industries.
The data highlighted a shifting landscape with a clear preference for services and also signalled areas for potential improvement, particularly in the software and IT services sector.
According to Dubai FDI Monitor data, in 2023, five business functions accounted for 73.7% of the total estimated FDI capital flows into Dubai and 96% of the total announced FDI projects.
The top five business functions by total estimated FDI capital were business services (38.3%), retail (15%), recycling (8.6%), construction (8%) and headquarters (3.8%).
For the total announced FDI projects, the top business functions were business services (42.2%), retail (33.7%), sales, marketing and support (14.3%), headquarters (4.2%), and logistics, distribution and transportation projects (1.8%).
The business services function retained its prominent status both in terms of FDI projects and FDI capital, underscoring its pivotal role in Dubai’s economic landscape. Retail experienced a notable year-on-year increase in both FDI capital (6.3%) and the attraction of FDI projects (6.2%). The data suggests a positive outlook for the retail sector, highlighting opportunities for further expansion and investment.
Hadi Badri, CEO of Dubai Economic Development Corporation, meanwhile, lauded Dubai’s stable and sustainable investment environment, citing the surge of talent across various sectors and the creation of new jobs through FDI.
Badri also highlighted Dubai’s appeal to multinational corporations and reaffirmed the emirate’s commitment to supporting businesses in expanding their operations and fostering innovation.
As the world grapples with economic uncertainties, Dubai’s resilience and dynamism in attracting foreign investment serve as a beacon of hope and opportunity. With its strategic advantages and commitment to innovation and growth, Dubai is set to serve as a vital destination for businesses, investors, and global talent.
Featured image: Dubai’s name in English and Arabic features prominently in the city’s Central Business District. Credit: Arnold Pinto
