New UAE investment ministry plans major policy moves

The United Arab Emirates’ (UAE) recently established Ministry of Investment is taking proactive steps to harmonise the investment policies of individual emirates, aiming to create a unified strategy for the Arab world’s second-largest economy. The ministry, established in July, is focused on not only boosting inward and outward investment flows but also aiding UAE companies in expanding their footprint beyond the nation’s borders.

Speaking at the Milken Institute Middle East and Africa summit in Abu Dhabi, Mohamed Alsuwaidi, Minister of Investment and also the Managing Director and CEO of Abu Dhabi’s holding company ADQ, outlined the objectives of the newly formed ministry. He emphasised the historical existence of separate strategies for each emirate and highlighted the need to formulate a cohesive UAE-wide strategy. Alsuwaidi stated, “Each of the emirates has historically its own strategy, so what is the UAE strategy as opposed to the local government strategies, and how can we bring them together into a single unified strategy? That’s really what we’re going to focus on going forward.”

The Ministry of Investment is not positioning itself as a regulatory policymaker but rather as a facilitator and advocate for companies seeking to grow further. Alsuwaidi clarified that the ministry’s role is to be an advocate for local companies, supporting their expansion endeavours internationally. The minister noted that the focus is on assisting local companies in opening up to new markets, emphasising the aspiration to take UAE businesses to the next level.

While the ministry is keen on promoting international expansion for UAE companies, it won’t be involved in asset management or allocation decisions made by entities like the Abu Dhabi Investment Authority (Adia), Mubadala Investment Company, or other sovereign funds. Instead, the emphasis will be on supporting local companies, both private and public, in expanding into new markets.

Alsuwaidi cited examples of successful international expansions by UAE companies, such as Taqa operating power plants internationally, Adnoc investing globally in the gas sector, and Pure Health in the healthcare sector acquiring a business in the UK.

The UAE, with its dynamic and growing economy, also presents a compelling opportunity for inbound investments. Alsuwaidi pointed out the influx of foreign capital into the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), anticipating a continued flow of foreign capital into the UAE’s financial sector.

Moreover, the UAE’s privatisation initiatives, allowing state-owned enterprises to sell part of their holdings to the public, have created new avenues for investment. Alsuwaidi highlighted the vast opportunities in the industrial sector, particularly in downstream oil and gas, petrochemicals, plastics, recycling, and materials for export.

The UAE has set ambitious targets for foreign direct investment (FDI), aiming to attract Dh550 billion ($150 billion) by 2031 and rank among the top 10 countries globally in terms of attracting FDI. The country has implemented various initiatives, including allowing 100% foreign ownership of companies and flexible visa programs, to make itself more attractive to investors and talent.

The news underscores the UAE’s commitment to fostering economic growth, attracting international investments, and supporting local companies in their global expansion endeavours. The Ministry of Investment’s role in unifying strategies and advocating for companies aligns with the broader vision of positioning the UAE as a global hub for business and investment.