Dubai has once more topped the rankings of global cities attracting the most greenfield foreign direct investment (FDI). Last year the buccaneering emirate garnered 1,070 greenfield FDI projects, according to emirates news agency WAM, citing data from fDi Markets.
In total, Dubai pulled in 1,650 FDI projects in 2023, amounting to just over 39 billion dirhams, or around $10.7 billion, an increase of 39% over the previous year’s figure. It also ranked first globally for greenfield FDI in several key sectors, including consumer goods, energy, e-commerce, and tourism.
Greenfield FDI refers to either from-the-ground-up business or expansion of existing business initiated by companies based abroad. Dubai’s pole position in the rankings is noteworthy given Saudi Arabia’s increasing efforts to entice multinationals to establish or headquarter operations in the kingdom. Riyadh is pushing ahead with plans, including its Vision 2030 initiative, to reduce its dependency on hydrocarbon revenue.
Dubai has defied predictions of corporate atrophy despite pressure from Riyadh on multinationals, analysts say. While Saudi Arabia is the region’s largest economy, 60 companies chose Dubai for their headquarters last year. It also has seen its share of global greenfield projects triple to 6%, WAM stated.
But Dubai’s competitive offering could be tested by schemes such as Saudi Arabia’s Project HQ, which aims to persuade multinationals to establish a permanent presence in the kingdom.
“This initiative might present challenges for Dubai, given the significant value of Saudi’s government contracts,” says Vijay Valecha, CIO of Century Financial in Dubai.
Even so, the emirate has a history of rising above such challenges to maintain a competitive advantage. Companies are also drawn by its robust legal and regulatory environment, which are often aligned with global best practices. Dubai’s determination to maintain its position as a go-to investment destination in the Middle East shows no signs of abating. Under a government-backed initiative known as D33 has committed to doubling the size of its economy in the next decade to just under $9 trillion to become one of the top three global cities
