dubai fdi monitor · dubai fdi monitor trends analysis report is a first of its kind, ... fdi...

TRENDS REPORT

DUBAI FDI MONITORمرصد دبي لالستثمار

Q 22 0 1 7

Context and ApproachDUBAI FDI Monitor Trends Analysis Report is a first of its kind, utilizing qualified and verified data to review FDI performance quarterly in the Emirate of Dubai. The report details the total capital invested as well as the number of projects by sector and country.

DUBAI FDI MONITOR Trends Analysis Report takes into consideration that quarterly FDI flows and public announcements are subject to revisions and can fluctuate from quarter to quarter. The following trends are based on FT fDi Markets data, and DUBAI FDI MONITOR’s qualified and verified data to provide an accurate analysis and insight on FDI flow trends at the time of publishing this report.

Looking at Foreign Direct Investment more broadly, foreign companies invest in Dubai for many reasons that cover a wide spectrum of both soft and hard infrastructures. Factors such as quality of life, education, healthcare, services and pro-business regulations and government continue to be positive reasons for investment decisions.

The DUBAI FDI Monitor Trends Analysis Report is oriented towards the strategic reasons that make Dubai a leading FDI destination globally as highlighted below:

The CityDubai’s opportunities for growth, partnership and innovation

The GatewayDubai’s advantage as a gateway to regional markets

The Global HubDubai’s role as a global platform for trade and investment


dubaifdi.gov.ae DubaiFDI2

FDI Capital Inflows into Dubai

Global inward Foreign Direct Investment (FDI) increased in Q2, up 6% quarter on quarter. Dubai’s FDI flows remained roughly the same with 0.8% drop in FDI from Q1 during the same time period with Dubai ranking 11th globally for total FDI attracted. Global and regional dynamics are driving investors to be more cautious with their capital deployment, particularly in capital intensive industries.

4.73AED Billion

11Global

Ranking

th

Trends


Source : Financial Times - fDi Markets Data


Dubai continues to be a top global investment destination for total number of projects, ranking 2nd in Q2 2017. Globally, Foreign Direct Investment projects were down 5% quarter on quarter. Dubai was not immune to the downturn attracting 82 projects this quarter compared to 84 as reported in Dubai FDIs Trends Report Q1. Dubai continues to be an attractive destination for service oriented firms looking to use Dubai as a gateway and a hub for the wider region and globe.

*New Forms of Investment (NFI)Foreign companies may choose New Forms of Investment (NFIs) and non-equity modes for market entry. Although data tracked remains very limited at this stage, NFIs in Dubai reflect the economic maturity of the domestic economic base. As more small and mid-sized companies grow, they create momentum for NFIs such as : Joint Ventures, strategic partnerships , alliances, sub-contracting, license arrangements and Mergers & Acquisitions.

Trends

FDI Projects

Greenfield Reinvestment *NFI

TYPE OF INVESTMENT PROJECTS

Total82

FDI Projects

2Global

Ranking

nd

79.27% 2.44% 3.66%


Source : Financial Times - fDi Markets Data


14.63%

Greenfield (JV)

TrendsThe Dubai FDI Monitor report classifies FDI projects on a strategic level based on turnover, size of investment and technology level.

FDI Projects- Strategic Level

97%

3%

Strategic

Non- Strategic

FDI Projectsof total 59 %

59% of the FDI projects are strategic and account for 97% of total FDI capital coming into Dubai.


Dubai FDI Monitor analysis


The Dubai FDI Monitor report classifies FDI projects on technology level based on the sector, sub-sector and activities of the projects and in line with OECD, EU and BEA definitions.

FDI Projects- Technology Level

86%

%14

Low Tech

High & Medium Tech

67%of total

FDI projects areclassified Medium to

High Tech

67% of FDI projects attracted are of High and Medium technology and account for 14% of total FDI capital coming into Dubai .

Trends




Q2 saw construction to be the largest recipient of investment for Dubai from the top source countries. Digital infrastructure continues to have consistent investments coming into its space, enhancing Dubai’s readiness for the digital economy. These infrastructure investments are catering to the demand for a more diverse project base as is evident in previous quarters with software publishers and technical services being some of the top sectors and business functions.

Top 5 Source Countries by FDI Capital

The top five source countries by FDI capital account for 88.3% of all FDI capital coming into Dubai, which account for 60% of all FDI projects.

United States

France

United Kingdom

Thailand

Bermuda

34.2%

20.0%

13.1%

11.8%

9.2%


Trends



US and UK continue to be the top investors for a fourth quarter in a row and account for 31.7% of high and medium tech FDI projects in Dubai. Three out of the five countries above are also ranked top ten in the Global Innovation Index 2017, which is an indication for Dubai’s high attractiveness as an investment destination for innovative, future-oriented companies. Market access and growth opportunities are additional important factors cited by companies in choosing Dubai as a hub of operations.

Top 5 Source Countries by FDI Projects

The top five source countries by FDI projects account for 71.9% of all FDI projects coming into Dubai, which accounts for 74.4% of total FDI capital.


United States

United Kingdom

India

France

Germany

25.6%

23.2%

8.5%

7.3%

7.3%

Trends



Top 5 Sectors by FDI Capital

Investments in hard and digital infrastructure took the lion’s share of FDI, across multiple sectors to support Dubai’s infrastructure demands. Data processing, hosting & related services are back in the top five sectors from Q4 2016, highlighting Dubai’s readiness for the digital economy. The importance of open data, as highlighted by Smart Dubai, estimates that opening and sharing of data will potentially add AED 10.4 Billion to the economy by 2021. Continuing FDI in Dubai’s digital infrastructure will ensure Dubai is able to unlock this opportunity.

Top sectors by Foreign Direct Investment (FDI) capital account for a total of 95% of total FDI inflows, and 35% of total projects.


Accommodation & Food services

Nonresidential Building Construction

Data processing , hosting & Related services

Educational Services

Administration & Support services

73.8%

10.8% 14%

Trends



5.0%

3.4%

2.4%

Top 5 Sectors by FDI Projects

Business services, support services, and headquarters relocation make up over 30 % of the project functions catered to by the top five sectors. These functions continue to serve the region with Dubai being its gateway and hub for operations.

The top sectors by Foreign Direct Investment (FDI) by projects account for a total of 52% of all FDI projects and 77% of all FDI Capital.


15.9%

12.2%

Administration & Support Services

Accommodation & Food Services

Finance & Insurance

Retail & Wholesale Trade

Management of companies& enterprises

9.8 %

7.3 %

7.3%

Trends



The Dubai FDI Monitor tracks FDI projects that have 10% or more foreign equity, are categorized into industries following the NAICS classification, recognizing the parent headquarters as the source of investment.

FDI Project announcements are qualified through public information or direct confirmation from the investor.

FDI Projects Tracking

The FDI Project validation process includes identifying the investor local mailing address, company registration information, recruitment of staff or signing of a lease.

FDI Projects Qualification

STANDARDS

PROCESS

The Dubai FDI Monitor data Analysis reporting is based on percentage and not FDI capital amounts or project numbers of projects distribution.

This approach provides a high-level view that is consistent with long term trends, given the variation on both FDI capital and FDI projects numbers that occur during the qualification and validation process.

Data Analysis Reporting

The Dubai FDI Monitor Trends Analysis report classifies FDI projects on a strategic level based on turnover, size and technology level.

Strategic Project Classification

APPROACH

CRITERIA

The project is over $50Mn in valueThe project is represented by companies with sales over $350Mn The project classifies sectors and sub-sectors with a technology component.

Dubai FDI Monitor Methodology



About Dubai FDI Monitor

First Ever FDI Monitor at a City Level

Annual FDI Results – Highlights Report Quarterly FDI Performance – Trends Report

DUBAI FDI MONITOR REPORTS

Provides credible insights on FDI results and performance Informs the policy and strategy formulation process Develops targeted services to investors

PURPOSE Accurate and real time reporting on FDI flows, trends and economic impact

BENEFITS

FDI trackingFDI validation Investors and projects database

KEY FEATURES



For further information please contact :

Hassan [email protected]

Akil [email protected]

Use of this Report

The Dubai FDI Monitor issues an Annual FDI Results Highlights Report and quarterly FDI Trend Analysis Reports based on Financial Times fDi Markets data, used by central banks around the world including UAE Central Bank and for Dubai FDI Monitor data and trend analysis.

Dubai FDI Monitor data and trend analysis are based on international classification standards (NACIS) and best practices and powered by a proprietary tracking technology, developed by leading FDI technology consultants, WAVTEQ and used by governments around the world, including the US Department of Commerce.

The Dubai FDI Monitor reports are published solely as a service to Dubai FDI stakeholders. Dubai FDI takes reasonable steps to ensure that the service provided is accurate, current and complete. However, please take into consideration that the Dubai FDI Monitor data is updated on real-time, hence this information and analysis may vary based on the date of publishing due to the variation on both FDI capital and FDI projects numbers that occur during the ongoing project qualification and validation process.

The Dubai FDI Monitor provides information and trend analysis reports on FDI capital flows and projects to Dubai. The reports are available on Dubai FDI website (www.dubaifdi.gov.ae) and are free to download. Should you need a customized report, Dubai FDI team will strive to provide you with the information upon receipt of your request. Dubai FDI retains the right at our sole discretion to deny requests that do not comply with internal policies and procedures.

The Dubai FDI Monitor is not an official statistical data source. For official statistics on FDI stocks in Dubai, please contact : Dubai Statistics Center (https://www.dsc.gov.ae). For official statistics on FDI stocks in UAE, please contact: Federal Competitiveness and Statistics Authority (http://fcsa.gov.ae/en-us).



www.dubaifdi.gov.ae

+971 4 4455964, +971 4 4455939 [email protected]

Business Village, Block A, 9th Floor , next to the Clock Tower , Deira, Dubai

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Contact Us

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DUBAI FDIDubai Investment Development Agency (DUBAI FDI), is an agency of the Department of Economic Development (DED) – Government of Dubai. We develop, promote and support Foreign Direct Investment (FDI) opportunities to facilitate Investors’ success, growth and expansion in Dubai, the United Arab Emirates and across regional and international markets.

DUBAI FDI works alongside foreign Investors to guide and assist on all aspects of business decisions, from identifying opportunities across key sectors and determining the best legal structure to set up their business by connecting Investors to a vast network of government and private sector leaders to enable their growth and expansion.

DUBAI FDI works with multiple Stakeholders at national, regional and international level to develop networks and partnerships and advocate policies and strategies with the aim to enhance Dubai’s economic sustainability and competitiveness as a pivotal hub in the global economy.

08:00 - 15:00 (Sun-Thursday)


dubai fdi monitor · dubai fdi monitor trends analysis report is a first of its kind, ... fdi...

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