The UAE has maintained its position as the leading destination for foreign direct investment (FDI) in the Arab world, attracting US$48.2 billion in FDI inflows during 2025. The figure represents 40.4% of all FDI received across the Arab region, reinforcing the country’s reputation as a preferred investment hub.
According to the 41st Annual Investment Climate Report 2026 published by Dhaman, the UAE also ranked first in the Arab world and 17th globally in the 2025 Composite Investment Climate Index, climbing two places compared to the previous year.
Despite the UAE’s strong performance, overall FDI inflows into Arab countries declined by 10% to US$119.3 billion in 2025, based on UNCTAD estimates referenced in the report. More than 80% of total investment was concentrated in just three Arab countries, while the region’s share of global FDI fell to 7.3%.
The report noted that although 13 Arab countries improved their rankings in the investment climate index, the region continues to face challenges in closing the gap with global investment competitiveness.
To strengthen the Arab investment landscape, Dhaman recommended a comprehensive approach focused on four key areas:
- Enhancing political stability and regional security.
- Modernising investment legislation, simplifying procedures, and accelerating digital transformation.
- Implementing economic reforms to improve infrastructure, logistics, taxation, and private sector participation.
- Investing in human capital, innovation, research and development, and strengthening local supply chains.
The report also highlighted the regional investment climate rankings, with the UAE leading the Arab world, followed by Qatar, Saudi Arabia, Oman, Kuwait, Bahrain, Jordan, and Morocco. Tunisia and Egypt also ranked above the Arab average in the global index.
The UAE’s continued ability to attract significant foreign investment reflects its stable business environment, investor-friendly policies, world-class infrastructure, and ongoing commitment to economic diversification and sustainable growth.
Source: https://gulfnews.com/uae/government/uae-tops-arab-region-in-fdi-inflows-in-2025-with-482-billion-1.500600953
