UAE attracts $48.3 billion in FDI as investment strategy shifts towards innovation

The UAE attracted more than $48.3 billion in foreign direct investment (FDI) inflows in 2025, accounting for 3.1% of global flows, as the country increasingly focuses on converting foreign capital into long-term economic value through innovation, technology transfer, and skills development.

This is according to a white paper by UAE-based strategic research firm White Paper Media Consulting (WPM), titled The Transformative Intangible Impact of FDI.

The report found that the UAE announced 1,562 greenfield FDI projects in 2025, representing a combined capital expenditure of $34.1 billion, equivalent to 1.8% of the global total.

The country’s evolving investment strategy has also affected the job-creation potential of foreign investment. Between 2019 and 2023, approximately 2,816 jobs were created for every $1 billion received in greenfield FDI, up from 2,265 in the preceding five-year period. Both figures exceeded the OECD averages of 2,318 and 1,880, respectively.

The report points to several initiatives reflecting this shift, including the joint venture between Space42 and ICEYE to manufacture satellites in the UAE, Microsoft’s $15.2 billion investment plan, which includes a commitment to train one million people, and the UAE’s $30 billion pledge to the Alterra climate fund.

According to WPM, the economic returns of FDI increasingly extend beyond capital inflows and direct employment to include knowledge transfer, intellectual property creation, technology adoption, and the development of local capabilities.

The report argues that FDI should increasingly be measured by its contribution to patent creation, skills transfer, data ecosystems, and clean technology development.

While the UAE’s business environment, infrastructure, and supply chain networks have supported its appeal to international investors, its strategy is increasingly focused on knowledge-intensive sectors, innovation, digital capabilities, and human capital.

Aligned with the OECD’s FDI Qualities framework, this approach reflects a broader shift from attracting capital to maximizing its long-term economic impact.

Drawing comparisons with Ireland, Singapore, Costa Rica, and Malaysia, the report traces the UAE’s evolution from market liberalization and infrastructure development between 1985 and 2005 to its current ambition of becoming a global capital and technology hub.

The report outlines seven policy shifts to deepen FDI’s economic impact, including extending free-zone benefits to the mainland, prioritising R&D-intensive projects, embedding skills transfer in major investments, and strengthening intellectual property creation and data governance.

Yazad Darasha, co-founder and director of WPM, said the UAE’s next challenge is translating its position as a leading investment destination into skills development, technology transfer, and greater economic productivity.

The report links this shift to the UAE’s National Investment Strategy 2031, which aims to attract investments that improve productivity and strengthen domestic business capabilities.

Dr Joachim Arnold, CEO of OCO Global and a contributor to the study, said the strategy reflects a shift towards investments that generate lasting economic value, build local capabilities, and help domestic companies improve productivity.