FDI in UAE

Name

Affiliation FDI

This is noted as the foreign direct investment. It is the complete ownership of a business in a given country by an entity owned in a different country. It is differentiated from portfolio foreign investment by the element of control.

There are two type of FDI that UAE supports. One, UAE supports horizontal direct investment. This is whereby a particular country undertakes activities in a given country in order to expand their operations into another new market. UAE uses this type of FDI in order to foster increase of exports as well as to increase GDP. For instance, the company currently has opened embassies in various countries around the world. With the existence of oil in the UAE most countries are willing to allow the country to invest in their respective nations. One of the activities that UAE performs in this countries is by taking part in tourism exhibitions. UAE has the best tourism sector in the world at the moment. Therefore, it open market for their tourism industry.

The other is vertical FDI. This is the establishment by firm to create manufacturing facilities in various countries. However, this countries must have an input into it. For example, the UAE has been on the eve of establishing manufacturing firms around the world such as oil firms.

It is clear that UAE supports FDI in another country. For example, since the UAE is on the eve of establishing it SMEs, it has been investing in other countries via FDI in order to gain more insights on SME business. It has given the country a clear cut of investment.

The companies that invest FDI outside UAE are few. For the case of this paper, the companies are SMEs and Oil companies. This has led to increase sales as well as growth of the companies in international arena as well as domestic.

Reference

Mina, W. (2012). Inward FDI in the United Arab Emirates and its policy context.