UAE – The Most Attractive Country in the Middle East for Foreign Investors

The United Arab Emirates is among the most attractive countries in the world for foreign direct investments. According to the 2013 A. T. Kearney Foreign Direct Investment Confidence Index (FDICI), the UAE has improved its position on the FDI Confidence Index. In addition, the country is ranked highest in the Middle East region.

The United Arab Emirates takes the 14th position on the latest FDI Confidence Index. That is one place higher compared to the previous ranking. In addition, it is the only country from the Middle East which has made it to the first 25 this year. In comparison, in 2005, the UAE was out of the top 20.

The study has found that in 2012, the United Arab Emirates has registered an inflow of foreign direct investments that amounted to about $9.6 billion. This is a rise of 20% when compared to the investments made in 2011.

According to the index, along with South Africa (15), the UAE is the biggest investment hub in Africa and the Middle East. That is due to the country’s strategic location, advanced infrastructure, as well as the tax-free opportunities for foreign investors.

The 2013 A. T. Kearney Foreign Direct Investment Confidence Index also states that the United Arab Emirates has a great chance to improve its position in the next one year and register even more foreign direct investments. The research reminds that currently there are discussions in the country for easing up its foreign ownership laws. If that happens, foreigners will be allowed to owned more than 49% of a business.

In general, the investor outlook for the UAE is positive (29%). Moreover, it is even more positive than that of countries like the Russia (28%), France (25%), Japan (25%), United Kingdom (24%), as well as Switzerland (20%).

On a more global level, the US took the first spot on this year’s FDI Confidence Index. That is a rise with three positions compared to the previous ranking.

Second is China with an FDI of $197.1 billion in 2012. Despite this impressive number, however, the country fell from the first place which it held for seven consecutive years.

Brazil continues to firmly protect its 3rd position thanks to its rising incomes and attractive demographics. Right after it is Canada, which made one of the biggest jumps this year. The North American country rises 16 places in only one year and is now 4th. Over the last four years, Canada managed to double its FDI so its ranking should not come as a surprise.

India’s fall, which started in 2010, continues and the country is now 5th in FDI confidence. Next is Australia, which enjoys a good amount of foreign direct investments due to its resource development.

On the 7th and 8th spots are the highest rated European countries – Germany and the United Kingdom, respectively. Investors are still interested in Germany’s industrial economy. The United Kingdom keeps it 8th position thanks to the rich investors it manages to lure.

Last year, Mexico was nowhere to be seen on the ranking. However, now it is back with a bang after the government started to consider easing the lists in foreign ownership. On the 10th spot is Singapore. The index states that the main source of the country’s FDI is investors from Europe.

The 2013 A. T. Kearney Foreign Direct Investment Confidence Index concludes that opportunities have increased not only in developed, but also in developing countries. In addition, the research has found the investor outlook is now more positive compared to the last few years. As a result, it is predicted that prospect will be better in the near future.

2013 FDI Confidence Index

1. United States
2. China
3. Brazil
4. Canada
5. India
6. Australia
7. Germany
8. United Kingdom
9. Mexico
10. Singapore
11. 14. United Arab Emirates