The UAE, and Dubai in particular, has been the preferred destination for foreign investors in the GCC over the past few years. According to the United Nations Conference on Trade and Development (UNCTAD) the UAE attracted over $121 billion in Foreign Direct Investments (FDI) between 2010 and 2020. By comparison, its larger neighbour Saudi Arabia saw inflows of nearly $106 billion over the same period.
The catalyst for the rapid rise of the UAE as an attractive destination for FDI was the liberalization of property rights in 2003. In the year prior to the implementation of these changes the UAE attracted just $95 million in foreign investment, but this grew to over $4 billion in 2003 and over $10 billion in 2004.
Deregulation in the property sector was closely followed by a slew of measures to facilitate growth in finance, hospitality, leisure and entertainment, healthcare, media, technology, education and other key sectors.
With the arrival of international companies and foreign residents, new laws and regulations were required to facilitate their development and sustain their growth, and the UAE obliged.
The willingness of the UAE authorities to respond to societal wishes and economic needs has played a key role in the country’s success as a destination for international capital, as has its readiness to continuously implement supportive reforms.
In November 2021, the UAE approved its widest-ranging reform of the legal system, with the aim of boosting investment and economic activity by amending regulations and extending protections to industrial property, copyright, trademarks, electronic transactions, trust services and factoring. In addition, it announced important changes related to society and personal security.
The rule of law, property rights, labour regulations and personal welfare are fundamental to cross-border investing and the UAE is embracing a journey towards global best practices in all these areas.
It is no longer enough to discuss the role of the UAE as a regional commercial hub but rather an international business centre, attracting companies from both east and west, and from afar.
The days when a job transfer to the Arabian Gulf was a hardship posting are long gone with the UAE today boasting very high standards of living, an excellent international education system, state-of-the-art healthcare facilities, a range of housing alternatives and outstanding leisure and entertainment options.
For information on how to incorporate in the UAE and the different structures, read here.