Fdi in Uae
Government policies in light of FDI will also be looked at. The different determinants of FDI will also be discussed. This paper will also exemine FDI statistics in the U. A.
E. Lastly a conclusion will be reached as to why developing and developed countried have increased FDI to United Arab Emirate. Introduction Dubai’s housing crash and near-default in 2009 decreased investors’ confidence in UAE’s business environment. The UAE government has made a great effort to attract foreign investment. Consumer markets are lucrative, but have slowed down with the global crisis.The direction of FDI in the UAE is promising. The government has been on the forefront of promoting FDI is UAE.
Fdi in Uae Essay Example
There are many different determinants of FDI into the UAE. Cassia Engineering is a Lebanese firm that has been operating in UAE since 1999. Cassia has faced many different challenges and benefits of operating in UAE. UAE Foreign Direct investment statistics Total Foreign Direct Investment ( an equity stake of 10% or more in a foreign based company) in UAE was on an increase from 2003 to 2008. it was at its peak in 2008 Before the financial crush that brought a huge crash in FDI to UAE.UAE, has been the 2nd ranking FDI reciver in the middle east region after Saudi Arabia. Over the years the amount of FDI into UAE has increased significantly.
Latest data from the central bank shows that in 2009 direct investment into the UAE escalated to 14. 7 billion dhs from 50. 4bn dirhams in 2008, as the UAE was badly affected by the global financial crisis. The data does not give a breakdown for Dubai but rather gave statics for the whole country. In 2006 total FDI in UAE amount to AEDD 68. 63 billion which was an 11% increased from the previous year. [pic]From the table above the largest amount of FDI came from the restaurant and hotels sector.
Also over 2005 – 2006 Dubai has been the highest receiver of FDI among the 7 emirates. Total FDI attracted by the UAE rocketed to nearly US$54. 78bn at the end of 2007, a staggering annual growth rate of about 717 per cent compared to 2006. In the six year period from 2003 to 2008, the UAE experienced the largest rise in 2008 in terms of both FDI project numbers and capital investment, with a 70% rise on project figures compared to 2007. In 2008, the UAE attracted 480 FDI projects consisting of $4. bn of capital investment and the creation of over 87,000 jobs. This accounted for a third of all project numbers, capital investment and job creation in the UAE between Jan 2003 and Jan 2009.
[pic] [pic] Government policy on FDI The UAE government has been on the fore front of attracting FDI into the country. Although as on 2010 UAE law allow foreign investors to own up to 49% of this law does not apply in the free trade zones, like JAFZA, Internet city,Media City and the rest. In the free trade zones foreign companies can own up 100% of the company.These free trade zones have been a major FDI attraction. Also there is 100% tax excemption ,100% repatriation of profits and capital to home country is also permitted. In Dubai foreigners are allowed 100% of residential property. This law largely boosted the real estate market in Dubai.
The government has also set forth,pro-employer laws. For example there is no minimum wage in UAE. Also incase of a dispute between the employer and the employee arises, the employer can have the immigration ban the employee from working in the UAE for a period of 1 year.These pro-employer laws have also been a source of FDI attraction to the UAE. DETERMINANTS OF FDI IN UAE. Many companies invest in UAE through FDI because of the political stability of the country. The Location of the UAE is also an attraction to firms.
The location of the UAE allows companies that are opearating in it an easy entrance to regional markets, for examples Sausi Arabia , Qatar or Bahrain. This also included the geographical location of the UAE. The economic growth of the UAE offers great investment opportunities.