For the second consecutive year, the United Arab Emirates has topped the list of the best-performing countries in attracting foreign direct investment (FDI) relative to the size of its economy. Namibia and Costa Rica followed closely behind, as reported in the tenth edition of the “New Foreign Direct Investment Performance Index” by FDI Intelligence.
The report indicated that the UAE achieved the highest FDI attraction rate when compared to its GDP, standing out among 105 countries evaluated. Approximately 85 of these nations scored above 1.0 on the index, indicating that their share of new global FDI projects in 2024 exceeded their proportion of the global GDP for that year. Meanwhile, 20 countries recorded results below 1.0, suggesting they attracted less investment than their economic size would justify.
Investor confidence in the UAE, recognized as the leading business hub in the Gulf region, remained robust over the past year, with an index score of 14.26 points. This suggests that the country attracted more than 14 times the expected volume of FDI projects relative to its economic size.
Despite a modest increase of only 1.8% in the number of projects in 2024, the UAE ranked second globally as a destination for FDI projects, following the United States.
The sectors attracting the most investment included business services, technology, and financial services, with a significant increase in the number of projects in the financial sector during 2024. Transportation, logistics, telecommunications, and consumer products also experienced notable investment growth.
Key drivers for investment attraction in the UAE remain in fields such as artificial intelligence, cybersecurity, and cloud computing. The Emirates have launched several ambitious initiatives aimed at becoming a global hub for AI, including the “Artificial Intelligence Strategy 2031” and the “UAE Centennial 2071,” which focus on integrating AI technologies into vital sectors to spur economic growth and foster innovation.
These initiatives have garnered strong interest from investors; Microsoft recently announced plans for a new global engineering development center in Abu Dhabi, and in 2025, the company revealed a joint project with G42 to establish a sovereign cloud infrastructure for AI in the country.
The UAE’s success in attracting foreign direct investment can be attributed to several factors, including its favorable business environment and relative stability in a tumultuous region. The governance of its seven emirates follows an absolute monarchy, alongside a neutral foreign policy that welcomes investors from both East and West. Additionally, the country has a strong legal framework and specific immigration initiatives, such as the “Golden Visa” and “Green Visa,” aimed at attracting skilled talent.
Over recent years, the UAE has successfully transformed foreign investments into a pivotal opportunity for diversifying its economy away from oil and gas, which are predominantly located in Abu Dhabi. Thanks to its extensive free zones, the economies of Dubai, Ras Al Khaimah, and Sharjah continue to grow and diversify, enhancing the nation’s position as a regional and global economic center.