DUBAI: There are many factors that make Dubai and Abu Dhabi attractive to investors, and chief among them are strong government policies, proximity to major markets and world-class infrastructure.
The country’s reputation as a tax-free haven, or the business-friendly and pro-investment approach of the government, has attracted investments from the world over.
According to Giyas Gokkent, group chief economist and head of research at the National Bank of Abu Dhabi, the top foreign direct investment (FDI) drivers also include the UAE’s cheap or relatively abundant energy and “elastic” labour supply.
Other comparative advantages of the two cities are the abundant sun and the sea, as well as the range of shopping centres and lifestyle facilities. With regards to foreign portfolio investments, Gokkent said, the main influences are solid economic growth, government support to major listed companies and inclusion in the MSCI emerging market index, among others.
“Located strategically between three continents, the UAE enjoys proximity to many of the world’s rapidly expanding markets. With its business-friendly and pro-investment approach, Dubai has changed dramatically over the last three decades, transforming itself into the Gulf’s leading multi-purpose business centre and regional hub, and the Middle East’s biggest re-exporting centre,” said Jonathan Fothergill, head of valuations, Cluttons UAE.
As of last year, the value of FDI inflows to the UAE grew by 25 per cent to reach $9.6 billion (Dh35.26 billion). The UAE, including Saudi Arabia, accounted for a huge chunk (83 per cent) of the FDI inflows to the Gulf Cooperation Council (GCC) region.
The UAE can add another feather to its cap as two of its major cities, Dubai and Abu Dhabi, have been recognised as the world’s top two investment destinations.
The World Bank’s Ease of Starting Business Index 2013 has named the UAE the 22nd easiest place in the world and first in the Arab region for starting investment projects. The World Economic Forum’s Global Competitiveness Report 2013 has also ranked the UAE in the 19th place, up from the 24th place last year.
Dr B.R. Shetty, managing director and CEO of NMC & UAE Exchange has been managing business in the UAE for almost four decades now. He has witnessed how the country has flourished over the years and he attributes the country’s success to the “clear vision” of the UAE Government.
“The business-friendly policies, immigrant welfare measures, tax-free salary, the streamlining initiatives like wages protection system, adoption of latest technology, uninterrupted power supply [and], strong infrastructure [among others], have made the market environment quite conducive for investments,” Shetty said.
“Add to it the compassionate approach of the royal families towards all foreign nationals, including those who belong to the bottom of the economic pyramid, has made it a haven for all to co-exist and prosper,” he added.
Hamad Buamim, director general of the Dubai Chamber of Commerce and Industry, said global investors are attracted to Dubai because of its “open and diverse economy, tax-free status and strong legislative framework that offer support and protection.”
“Dubai is where the world comes to do business. It is the Middle East’s leading business destination and an ideal base for global investors to reach markets across the Middle East and Africa,” he said.
“The UAE is a competitive environment for businesses and this is a situation that is improving all the time. It rose five places in the World Economic Forum’s Global Competitiveness Report 2013 to 19th place and we hope this upwards trend will continue in line with efforts to further enhance the business environment,” he added.
Another major factor behind the UAE’s strong reputation is the vibrant marketing and communications sector that has carried out successful campaigns that promote the country to the world.
“The outcome of [these campaigns] can be witnessed by spending just a few minutes in Dubai Mall or airport – they are all buzzing with tourists from across the globe,” said Prem Ramachandran, founder and managing director of White Water Public Relations.
“The sports marketing, world renowned shopping festivals and several global PR (public relations) campaigns have all been truly world class. These cities are a delight for companies from overseas as they are tax-free havens and safe, and create an ideal environment for trade and business,” he added. (with additional inputs from Gaurav Ghose and Himendra Kumar)
