Dubai has achieved the top ranking in the world in attracting foreign direct investment (FDI) in 2021, with a record number of 418 greenfield FDI projects, revealed His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai. HH Sheikh Hamdan expressed his gratitude to His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, for his exceptional leadership and attributed Dubai’s remarkable achievements and global rankings to His Highness’s farsighted vision.
Unveiling the annual ‘DUBAI FDI Results & Rankings Highlights Report 2021,’ published by Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economy and Tourism (DET), Sheikh Hamdan stated: “Dubai’s rise as the world’s top ranked destination for foreign direct investment has been driven by the visionary leadership of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum. Under His Highness’s directives, Dubai has created a stable, sustainable economic environment and a vibrant business ecosystem for companies and entrepreneurs to launch new ventures, tap new opportunities and expand their business both in the country and beyond its borders. Over the years, Dubai has also demonstrated its resilience to global economic fluctuations, earning the confidence of global investors, and enhancing its reputation as one of the world’s leading lifestyle and business destinations.
“His Highness’s vision fostered strong public–private partnerships that created a unique collaborative model for rapid sustainable development and led to the establishment of growth-friendly regulations and business-enabling services. Under his leadership, Dubai’s government departments, free zones, and private sector partners combined their strengths to create a fertile ground for talent, enterprise, and investment in the emirate. As the winds of change sweep the world, foreign investors continue to gravitate to Dubai because of the supportive platform it has created for companies of all sizes to innovate, develop future-oriented technologies and add value to the economy.”
The annual ‘DUBAI FDI Results & Rankings Highlights Report 2021’ ranked Dubai first globally in attracting greenfield FDI projects in 2021, up from the third position last year, with a staggering 418 greenfield FDI projects. The report was based on data from the Financial Times Ltd. ‘fDi Markets,’ the world’s leading source of data on greenfield FDI projects.
Moreover, ‘fDi Markets’ data for the year 2021 showed that Dubai continued to maintain and improve on its lead position across key FDI attraction metrics, ranking first in the Middle East and North Africa region (MENA), and third globally, up from fourth place last year, in FDI capital inflows. In Reinvestment FDI projects, Dubai ranked first in the MENA region and third globally (up from fourth place last year), and seventh globally, (up from eleventh-place last year), in FDI capital inflows. As for FDI job creation, Dubai ranked first in the MENA region and fifth globally, up from the sixth-place last year.
The ‘DUBAI FDI Results & Rankings Highlights Report 2021’ is based on ‘Dubai FDI Monitor,’ which tracks, validates, and provides analysis on all types of FDI projects into Dubai, including greenfield FDI projects, data on FDI Reinvestment projects, Mergers & Acquisitions, Joint-Ventures, and New Forms of Investments (NFIs), along with the recently added Venture Capital (VC) Backed FDI. The report revealed significant growth in all key FDI indicators compared to the previous year, where the estimated value of FDI capital flows into Dubai exceeded AED26 billion from a total of 618 announced FDI projects in 2021, with a growth rate of 5.5 per cent compared to 2020. Both FDI projects and FDI job creation witnessed a significant increase of 36 per cent in 2021 compared to 2020, with an estimated 24,868 jobs in 2021, compared to 18,325 jobs in the previous year.
His Excellency Helal Al Marri, Director General of the Department of Economy and Tourism in Dubai, stressed that Dubai’s top global ranking in the vital economic indicator of FDI attraction has been made possible by the Dubai leadership’s efforts to promote public-private sector partnerships, which have become a key driver of the emirate’s sustainable development.
Al Marri said: “Dubai’s remarkable performance in FDI attraction in 2021 reflects the confidence of investors, multinational companies, start-ups and global talents in the investment and business environment in Dubai, notably the emirate’s success in overcoming the impact of the recent global health and economic challenges, while promoting economic growth and creating new opportunities in the future economy. The remarkable success of Expo 2020 Dubai, the largest event in the history of the World Expo, which saw the participation of 192 countries and more than 24 million visitors, and its enduring impact on facilitating varied trade and business partnerships, which are major drivers of economic recovery and growth globally, is a testament to our leadership’s commitment to make Dubai the preferred global destination to work, live, visit and invest.”
Al Marri added: “The year 2021 witnessed the largest legislative transformation in the history of the UAE, with over 50 laws in all fields updated and reformed, paving the way for the adoption of new policies and regulations that will further enable the economy in Dubai to keep pace with global developments and sustain its leading position in future.” Al Marri pointed out that Dubai attracted 43 Headquarters (HQ) FDI projects in 2021, leading regionally in this category and ranking second globally behind Singapore, surpassing major cities such as London and New York, in hosting global and regional headquarters of international companies. Dubai also ranked third globally in terms of HQ FDI capital flows, which amounted to AED2.8 billion, according to data from ‘fDi Markets.’ “These achievements reaffirm the strength and strategic advantages of the highly developed infrastructure of specialised free zones in Dubai and the emirate’s pioneering initiatives in adopting legislations to encourage and facilitate investment in the future economy in line with its ambitious strategy to lead the digital economy,” Al Marri concluded.
Fahad Al Gergawi, Chief Executive Officer, Dubai Investment Development Agency, (Dubai FDI) said: “Dubai’s regional and global pre-eminence in FDI attraction indicators is the fruit of the vision and guidance of the leadership, which manifested in setting a clear goal in the Dubai Plan 2021 to make the emirate the preferred global FDI destination, and laying strong foundations for the emirate’s economy, which has proven its efficiency, resilience, stability and sustainability time and again despite global challenges.”
Al Gergawi pointed out that Dubai's rise to the top position globally in attracting greenfield FDI projects in 2021 is an unprecedented achievement as the city surpassed London and Singapore for the first time with a remarkable lead of over 50 FDI projects. “Dubai has successfully attracted a record share of the total greenfield FDI projects globally for the second year in a row. The share of greenfield FDI projects attracted into Dubai exceeded the two per cent barrier for the first time in 2020 with 2.1 per cent, and reached a new high of 2.8 per cent share in 2021,” added Al Gergawi.
“Sustained FDI accomplishments and rankings despite the economic changes and challenges the world has witnessed in the past few years have demonstrated the strong fundamentals of the investment environment in Dubai. It will also accelerate the transition from bridging gaps and applying best practices to a new mindset of close cooperation with global investors and partnerships with FDI source countries. Dubai today has emerged as a role model for best practices in FDI attraction and facilitation, and aftercare services,” Al Gergawi said.
In another testament to Dubai’s ever-evolving investment environment, the emirate ranked first in MENA and tenth globally in Global Venture Capital FDI Projects, according to the ‘Global Venture Capital FDI Ranking 2022’ report published by ‘fDi Intelligence’ based on data gathered during 2003-2021. Further data from ‘Dubai FDI Monitor,’ supported by MAGNiTT, revealed that 84 Dubai-based startups successfully attracted Venture Capital (VC) Backed FDI worth AED2.34 billion in 2021. “Dubai is leading a global dialogue on the future of Impact FDI in collaboration with international associations and multilateral organisations in the FDI segment. This initiative has helped enhance Dubai’s future readiness for new trends shaping investor decisions while shining the spotlight on Dubai’s mature ecosystem that supports local and global startups and attracts FDI into innovation and sustainability,” added Al Gergawi.
Highlights of the annual ‘DUBAI FDI Results & Rankings Highlights Report 2021’
Technology and Innovation Projects on the rise
The FDI projects recorded in 2021 mirrored Dubai’s diversified economy. Dubai’s investment environment maturity kept pace with technological transformations and met and often exceeded investor expectations as well as the aspirations of global entrepreneurs and talents.
The ‘Dubai FDI Monitor’ data revealed that Greenfield FDI into Dubai amounted to 53 per cent of the total FDI projects recorded in 2021. New Forms of Investments (NFIs) followed, accounting for 19 per cent of the projects, followed by VC Backed FDI projects with 12 per cent, Reinvestment FDI projects with eight per cent, Mergers & Acquisitions projects with six per cent and Joint Ventures with two per cent. The High and Medium technology FDI projects witnessed a significant growth, reaching 67 per cent of the total FDI projects recorded in 2021, compared to 56 per cent in 2020, further highlighting Dubai’s leading position as a preferred destination for high-tech FDI projects and a global centre for specialised talent in the digital economy.
The United Kingdom leads top FDI source countries
The ‘Dubai FDI Monitor’ data revealed the growth of FDI flows into Dubai from the United Kingdom, which became the leading source country with a 27 per cent share of the total FDI capital inflows in 2021, followed by the United States with 18 per cent, France 13 percent, Germany 11 per cent and India, 6 per cent. As for FDI projects in 2021, the US maintained its lead among top FDI source countries with 19 per cent share of the total FDI projects, followed by the UK with 18 per cent, India 13 per cent, France six per cent and Germany, 5 per cent.
Accommodation, food services and the digital economy lead the attraction of FDI
The ‘Dubai FDI Monitor’ data revealed the growth of FDI inflows into advanced technology and the digital economy sectors. The Accommodation and Food services sector topped with 28 per cent share of total FDI capital flows into Dubai in 2021, followed by Residential Building Construction (15 per cent,) Electric Power Generation (10 per cent), Management of Companies & Enterprises (six per cent), and Data Processing, Hosting, & Related services (five per cent). As for FDI projects in 2021, Software Publishing led the top five sectors with 10 per cent share of the total, followed by Finance & Insurance (eight per cent), Accommodation & Food Services (seven per cent), Management of Companies & Enterprises (seven per cent), and Retail & Wholesale Trade (six percent).
Dubai: FDI Global City of the Future
The ‘Global Cities for Future Foreign Direct Investment 2021/2022’ report, published by "fDi Intelligence” ranked Dubai among the top three cities globally. Dubai’s FDI advantage was further emphasised with its second place ranking in the categories of “major cities that attract foreign direct investment” and “economic potential and a conducive environment for business.” The emirate’s sustained FDI inflows, regional leadership and global prominence across all key FDI indicators in 2021, reflect the confidence of the global investment and business community in Dubai as the preferred city for growth and expansion of global businesses and startups.