The UAE has been ranked as the 11th preferred FDI country destination globally, with Dubai and Abu Dhabi standing first and second respectively, in the Middle East, according to A T Kearney's FDI Confidence Index.

“This survey addressed leading international investors’ plans and their concerns in the context of today’s global issues and analysed their key criteria for selecting future investment destinations. These results indicated that Dubai is considered a regional success and investors rank it as their number one investment location in the Middle East,” confirmed Dr Dirk Buchta, vice president and managing director A T Kearney Middle East.

The study revealed global investors’ recognition of Dubai’s unique location, infrastructure and value proposition as a hub to access the regional market, as well as its strong economic foundation with a unique ability to rebound. In addition, the city is seen as demonstrating an overall ‘ease of doing business’.

Ranked amongst the top 25 FDI destinations identified in the report means a potential access to approximately 70 per cent of the global FDI inflows. An opportunity, that Dubai is well positioned to take advantage of. Much like Hong Kong for mainland China and Singapore in Southeast Asia, Dubai may maintain its position as investment hub to the region.

“The high FDI confidence ranking of Dubai indicates that the Emirate is seen as one of the prime access points and gateway for FDI into the Middle East and beyond,” said Matthieu De Clercq, senior manager, A T Kearney Middle East.

Despite recent events surrounding the global financial crisis, the survey found that the vast majority of investors have no plans to reduce their investments in the city. More than 80 per cent of all investors surveyed, who have planned investments in Dubai, either plan to maintain the current level of investment or further increase investment levels in the next three years.

According to the investors interviewed, Dubai is viewed as having reached the next level of economic maturity and represents a key access point for businesses planning to expand within and beyond the Middle East.

While Dubai fulfills key basic criteria for FDI; the challenges identified in the survey primarily range from geopolitical concerns to cultural issues. The investors with regional experience pointed to several challenges for further FDI growth in Dubai, such as cross cultural challenges, corporate governance, transparency and availability of business data. These challenges are common to more mature FDI destinations, indicating a maturing investor market in Dubai. To take FDI growth to the next level, FDI policies will have to take into consideration how to overcome these issues.

“Dubai is regarded a catalyst for the region and while there are still opportunities to excel, the study’s results are significant and indicate that Dubai is the destination of choice for regional FDI and has the strength and talent to rebound against the international economic downturn,” added Dr Dirk Buchta.-TradeArabia News Service