UAE Cements Status as Premier Global Investment Hub on Back of Diversification Push

The United Arab Emirates (UAE) has solidified its status as a premier global investment hub, climbing to the 8th position on Kearney’s 2024 Foreign Direct Investment Confidence Index (FDICI).

This marks a remarkable ascent from its 18th place ranking in 2023 and positions the UAE as the 2nd on the Emerging Market Index, trailing only behind China.

The FDICI, now in its 26th edition, remains a reliable indicator of global FDI trends, with the UAE’s progress underscoring its effective pursuit of economic diversification and its emergence as a pivotal regional player on the world stage.

The UAE's diverse economy has experienced substantial growth across pivotal sectors, a testament to the success of its diversification initiatives. Notably, FDI inflows surged from $20.7 billion in 2021 to $22.7 billion in 2022, constituting 60 per cent of the total FDI attracted to Gulf Cooperation Council (GCC) countries.

Rudolph Lohmeyer, Partner at National Transformations Institute, Kearney Middle East, remarked: “The UAE's exceptional rise in Kearney’s 2024 FDI Confidence Index underscores its visionary leadership and proactive measures towards economic diversification, positioning the UAE as a magnet for global investment. Its enhanced ranking reflects growing investor confidence buoyed by the UAE’s consistent policy reforms. With its resilience, advanced infrastructure, robust capital markets and vibrant tech ecosystem, the UAE offers an exceedingly attractive proposition for global investors, even amidst fierce global competition.”

The UAE’s appeal to global investors is further bolstered by its concerted efforts to foster an optimal business environment, notably through the development of a cutting-edge technology ecosystem. This has led to increased investment in sectors such as fintech, e-commerce, agritech, logistics, ICT and renewable energy.

Moreover, the UAE's world-class infrastructure not only facilitates business operations but also enhances overall quality of life, making it a preferred destination for high-value industries. The nation’s unwavering commitment to infrastructure development remains pivotal to sustaining its economic momentum.

The Kearney FDI Confidence Index is an annual survey of global business executives gauging the markets likely to attract the most investment in the next three years.

Unlike backward-looking data on FDI flows, the FDICI provides forward-looking analysis of markets investors intend to target for FDI in the coming years. Since its inception in 1998, the Index has closely tracked the top destinations for actual FDI flows in subsequent years.

Constructed from primary data sourced from a proprietary survey of senior executives of leading global corporations, the index is based on responses from C-level executives, regional and business leaders.

Participating companies have annual revenues exceeding $500 million and are headquartered in 30 countries across various sectors. Index values are calculated based on the likelihood of making a direct investment in select markets over the next three years.

These markets collectively received 95 per cent of the world’s inward FDI flows in 2022, according to UNCTAD data. Higher Index values denote more attractive investment targets.

All economic growth figures cited in the report are the latest estimates and forecasts available from Oxford Economics, unless otherwise specified. Secondary sources include investment promotion agencies, central banks, ministries of finance and trade, relevant news media, and major data sources.

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