Fdi in Uae

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TABLE OF CONTENTS

Executive summary …………………………………………….. 3 Introduction ………………………………………………………3 UAE Foreign Direct investment statistics …………………….. 4 Government policy on FDI…………………………………….. 7 DETERMINANTS OF FDI IN UAE………………………….8

COUNTRIES THAT INVEST IN UAE……………………….9
CASSIA ENGINEERING’S FDI INTO UAE………………..9
BENEFITS ……………………………………………………..10 PROBLEMS FACED BY CASSIA……………………………10
THE DIRECTION OF FDI IN UAE ……………………….11
Conclusion……………………………………………………..12 References…………………………………………………….14

UNIVERSITY OF WOLLONGONG in DUBAI
College of Business and Administration
Project report : FOREIGN DIRECT INVESTMENT IN UAE
in partial fulfillment of requirement of the subject:
TBS983 International Business Environment
for the MIB Program Spring 2011
By
Mange J. Kimambi

Submitted to:
Date: 14/04/2011

Executive summary
This paper critically exermines the economic environment for FDI in United Arab Emites. The paper will assess the growth and direction of FDI in United Arab Emirates. This will include the coverage of the forms of FDI.

The paper will look at the trend of FDI flows in United Arab Emirated in recent years. 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.

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.

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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 $4.8bn 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.

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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...
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