UAE Ranks Second Globally in Greenfield FDI Projects, Marks 33% Increase

The United Arab Emirates (UAE) ranked second after the United States in greenfield FDI project announcements in 2023, with 1,323 projects, marking a 33% increase from 2022.

The details were shared in the World Investment Report 2024 by UNCTAD. In 2023, the UAE attracted $30.688 billion in foreign direct investment (FDI) inflows, up 35% from $22.737 billion in 2022. The report also showed that FDI outflows were $22.328 billion in 2023, less compared to $24.833 billion in 2022.

FDI outflow stock increased to $262.208 billion in 2023, up from $239.880 billion in 2022. The UAE moved up two places in the ranking of top destinations for greenfield projects, entering the top five in 2022.

The report said globally FDI declined by 2% to $1.3 trillion. Aside from a few exceptional cases, the report shows a more significant drop of over 10% in global foreign investments for the second year in a row. This decline is mainly due to rising trade tensions and geopolitical issues in a slower global economy.

The report suggested that in 2024 "modest growth for the full year appears possible." This prediction is based on improved financial conditions and concerted efforts to make investments easier, which are key parts of national policies and international agreements.

As countries around the world compete to attract and keep financial investments, there has been a rise in online information portals and single-window systems. These tools help to create a better environment for businesses and investors.

UN Trade and Development Secretary-General Rebeca Grynspan said, "Investment is not just about capital flows; it is about human potential, environmental stewardship and the enduring pursuit of a more equitable and sustainable world," WAM reported.

FDI flows to developing countries dropped by 7% to $867 billion last year, with a significant 8% decline in developing Asia. Africa saw a 3% decrease, and Latin America and the Caribbean experienced a 1% decrease.

Flows to developed countries, on the other hand, were heavily influenced by the financial activities of multinational companies, partly due to efforts to enforce a global minimum tax rate on their profits. Inflows to most parts of Europe fell by 14%, while North America saw a 5% decrease.