The State of Foreign Investments in Dubai
Dubai used to be a mere dependency of Abu Dhabi until it turned out as one of the principal ports for “re-exports” in the whole world. Then, oil was discovered in Dubai and after this the country emerged as among the most flamboyant, contemporary and business entered city states globally.
The former desert settlement is now teeming with five-star hotels, modern shopping malls and high-rise buildings. It is said to be well ahead of many mega-urban hubs of other first-world nations when it comes to economic expansion. That is why both local citizens and foreigners consider Dubai as a true sign of progress and triumph of humankind over nature and other conditions.
Even before crude oil was discovered, Dubai was already the focal point of trade in the Middle East for many European countries. City life changed considerably when oil fields were uncovered some 60 nautical miles from the seashore in 1966. At present, around 68 million barrels of crude are produced every year in Dubai. When the Dubai International Finance Center was opened in 2002, international financial institutions like HSBC, CITIBANK, CREDIT SUISSE, and STANDARD CHARTERED immediately filled up the huge facility.
Last year, Dubai earned nearly $7.8 billion or Dhs28.6 billion in overseas direct investments, according to a report published by an investment firm called Dubai FDI. Industries which accounted for roughly 78 percent of foreign direct investments included real estate, tourism, financial services, business management, renewable energy, and information technology.
Investors came from the United States, United Kingdom, Germany, Italy, India and the Netherlands generating an aggregate of Dhs23.9 billion for 2014 alone. These nations made up close to 84 percent of the total FDI (2014) as well as 59 percent of total number of projects. An invasion of investors and growth opportunities is expected when Dubai hosts Expo 2020 which is acknowledged as one of the most prominent international expositions.
Moreover, the emirate is deemed as a perfect location to conduct business because of the business-friendly atmosphere and simplicity of doing business. To entice additional foreign investments to the United Arab Emirates, Dubai FDI formed a partnership of late with the SHARJAH Investment and Development Authority.
Dubai as also ranked number 14 in the latest A. T Kearney Global Foreign Direct Investment Confidence Index which determines present and upcoming prospects for foreign direct investment flows.
Investing in Dubai
Dubai is an investment haven. There are many options that potential investors can try and one is Infrastructure.
Dubai International Airport is recognized as the fastest growing and sixth busiest airport with respect to international passenger traffic worldwide. In 2009 alone, it handled 41 million passengers from different countries. Over 130 international airlines offer passenger and freight in Dubai. These are major air carriers like British Airways, United Airlines, Lufthansa, Singapore Airlines, KLM and of course, the country’s international carrier, Emirates Airlines. It operates from the world-class Terminal 3 which opened recently and capable of accommodating 27 million passengers annually.
At the same time, it is where you can find the biggest man-made harbor (Jebel Ali Port). Dubai’s seaports are served by around 242 shipping lines. Its 19 percent growth rate alone matched the median set by the combined figure of Middle East, Euro region and Africa. Besides, there are many Free Trade Zones in the country with industry-specific market infrastructure and tax incentives for various industries.
These are the following:
À Financial Services and Commodities
À Media and Technology
À Bio-technology and Research
À Textiles and Logistics
À Dubai Free Zones and Outsource Zones
These Free Trade Zones have convenient office spaces, factories, warehouses, and easy licensing processes. Dubai Metro is one of the most forward looking rail systems globally with fully-automated trains. The transport system links some of Dubai’s shopping malls, tourist destinations and the international airport.
Another very viable area open for investment in Dubai is tourism. Last year alone, 11.12 million foreign tourists visited Dubai. This was up from 10.16 million two years ago. The country’s tourism and hospitality sector accounts for more than 20 percent of Dubai’s Gross Domestic Product.
Look at the emirate’s trade and investment statistics. According to Dubai’s customs data, non-oil foreign trading for the first three quarters of 2014 reached DH988 billion with imports accounting for Dh621 billion, exports were recorded at Dh86 billion and re-exports were listed at Dh280 billion. These impressive statistics came when the World Bank just disclosed that commodity prices dived during that year.
Dubai, which is part of the United Arab Emirates, was ranked number one in terms of quality of life in the Middle East and North African region and number 15 globally out of 160 nations.
Indeed, Dubai presents a very positive perspective for the future when it comes to investments. It may be under-rated until this time but it is surely destined to emerge as a world city in the near-term.