Business and FDI Opportunities in the UAE

Country Overview

The United Arab Emirates, often referred to as the UAE, is the second largest economy in the Middle East. It is the constitutional federation of seven emirates and has a population of more than 6 million. The UAE is situated in the south-eastern part of the Arabian Peninsula bordered by the Gulf of Oman and the Persian Gulf. Earlier, the economy of the UAE was dependent upon fishing, date palm cultivation and pearl industry. However, the discovery of oil in the region during the 1950s prompted a rapid growth of the UAE economy due to profits from oil exports transport network. As the country attracted foreigners, especially in Dubai and Abu Dhabi, it witnessed a profound transformation which encouraged the government to make huge investments in the tourism and construction sectors.

Over the years, the UAE has emerged as the 9^th largest FDI recipient in Asia, amounting to US$ 8.9 billion of FDI inflows in 2016. The gas and oil sectors accounted for the majority of these investments, followed by electricity and water production.

Why Invest in the United Arab Emirates

The strategic location of the UAE between the Far East and the West links the shipping routes and makes it accessible to major developing countries such as India, China, Iraq, etc. The country has now become a hub for international establishments and foreign investments owing to its social stability, favorable business environment and solid economic fundamentals. Moreover, the UAE government has launched an initiative, known as “Investment Map Project”, to attract foreign investment capital and promote the UAE among investors. Further, the country’s new investment law gives protection to foreign investors, provides incentives and allows foreign equity ownership up to 100 per cent in certain sectors. In addition to this, the availability of cheap foreign labor, free trade zone and exclusion of corporate tax has further established the UAE as an attractive destination for launching a business.

These initiatives by the government have helped in diversifying the economy which was earlier highly dependent on oil exports. It is now actively promoting the participation of investors in other sectors such as tourism, aviation, renewable energy, etc.

Where to Invest

The UAE offers investment opportunities in a vast array of sectors with some of the most popular being:

• Aviation: Dubai International Airport remains the world’s busiest international airport due to a rise in the air traffic movement. On account of this, the government has managed to increase the number of Open Skies agreements, extend its international partnerships by entering into code-share agreements and improve the functioning of Air Services Agreements (ASAs). These factors offer abundant opportunities for investors in the aviation sector in the country.
• Tourism: Tourism industry is the key growth sector as a part of the economic diversification policy in the UAE. In the country, Dubai and Abu Dhabi are the major cities which attract travellers and trade visitors from across the globe as they provide some of the best tourist destinations, events, delectable cuisines and leisure. Growth in the tourism industry is also sustained by substantial infrastructure investments, like Expo 2020, which offers unparalleled opportunities for investors.
• Renewable Energy: Rising domestic energy consumption due to growing population has led the UAE government to implement a number of renewable energy projects. Dubai has launched a program, known as Dubai Clean Energy Strategy 2050, in which the government has set a target of producing 75% of its energy from clean sources. This has opened several investment avenues in the renewable energy sector for the investors. In addition, the government is supporting nuclear, solar and clean coal initiatives and encouraging participation from the private sector.
• Infrastructure Industry: Fujairah 2040 Plan emphasises on enhancing the transportation and housing facilities, and adding new terminals of oil at the seaport. Apart from this, growth in the tourism sector is bolstering the infrastructure industry, thereby creating an excellent global platform for foreign investors. Additionally, urban transit projects such as construction of new metro in Abu Dhabi and expansion of Dubai trams bode well for investment in the country’s railway infrastructure sector.

About IMARC Group: IMARC Group is a leading market research and consulting company that offers management strategy and market research worldwide. With an acute focus on the flourishing Middle East and Africa markets, the company has enabled its clients to successfully set up and expand their businesses in the UAE. Some of the company’s offerings include:

• Market Research
• Feasibility Studies
• Market Expansion
• Marketing and sales
• Procurement and Distribution

For more information, please visit: https://www.imarcgroup.com/