UAE’s New National Investment Strategy 2031: Key Sector Prospects

The UAE unveiled its National Investment Strategy 2031 in early November, setting ambitious targets to double FDI to US$354 billion by 2031. The strategy opens foreign investment prospects among emerging sectors, renewables and technology, infrastructure, manufacturing advancement, and building a world-class business environment.

By Estelle Xiao

On November 5, 2024, the United Arab Emirates (UAE) unveiled its National Investment Strategy 2031 during the UAE Government Annual Meetings held in Abu Dhabi. This comprehensive strategy sets ambitious targets to double foreign direct investment (FDI) to US$354 billion (AED 1.3 trillion) by 2031, representing 30 percent of the nation’s total investment volume. Additionally, it aims to triple the cumulative FDI balance to US$599 billion (AED 2.2 trillion). The objective of the strategy, which aligns with the “We the UAE 2031 mission,” is to foster investment in innovation and high-technology sectors, which will further solidify its position as a premier global trade and business hub.

For investors, the strategy presents unprecedented opportunities across emerging sectors, enhanced infrastructure, and a world-class business environment. This article outlines the UAE’s key strategic pillars and offers actionable insights into how investors can maximize their returns while contributing to the UAE’s ambitious goals.

In 2023, the UAE achieved record-breaking FDI inflows of US$30.7 billion (AED 112.6 billion), marking a 35 percent year-on-year increase. This remarkable growth positioned the UAE as the second globally for new FDI projects, with 1,323 new ventures, a 33 percent rise from 2022, demonstrating its strong appeal to international investors. To promote FDI, the UAE has introduced a range of initiatives over the past years, including easing visa restrictions and providing incentives for small and medium-sized enterprises (SMEs). The UAE has also launched the “NextGen FDI,” aimed at expediting licensing processes, increasing the issuance of batch visas and Golden Visas, improving banking services, and offering commercial and residential rental incentives to technology companies looking to relocate to the UAE. Over the past decade, the UAE’s cumulative FDI balance has surged by 150 percent, significantly outpacing the global growth rate of 97 percent.

Key objectives and opportunities: UAE National Investment Strategy 2031

The National Investment Strategy 2031 is anchored on five strategic goals:

• Focus on advanced manufacturing, renewable energy, technology and emerging sectors to sustain high growth.
• Support further investment to the current existing projects with a more business-friendly environment.
• Create long-term international partnerships and encourage collaboration with foreign governments, multinational corporations, and global investors.
• Foster strong relationships with investors by providing throughout support.
• Improve the business environment to ensure competitiveness and build talented human capital.

Sector prospects

The UAE’s strategic focus on emerging sectors, robust infrastructure, progressive policies, and talent development creates fertile grounds for investment in the next 6 years. By aligning with these priorities and leveraging the comprehensive support available, investors can position themselves at the forefront of growth in a globally competitive economy.

Renewable energy

Overall, the UAE’s focus on emerging sectors like renewable energy, artificial intelligence (AI), and advanced manufacturing reflects its commitment to innovation and global competitiveness. The government has rolled out substantial incentives, including subsidies, tax exemptions, and funding for research and development (R&D), to attract investment in these industries. For example, the Mohammed bin Rashid Al Maktoum Solar Park, the world’s largest single-site solar energy project with a total investment of US$13.61 billion, exemplifies the UAE’s leadership in clean energy. This landmark initiative supports the Dubai Clean Energy Strategy 2050, underscoring the nation’s commitment to sustainability and its transition to a low-carbon economy. Investors can capitalize on these priorities by aligning their portfolios with UAE-backed initiatives and partnering with local firms to gain a competitive edge in these transformative sectors.

Long-term international partnership

The strategy also places significant emphasis on the UAE’s long-term international partnerships, fostering collaboration with multinational corporations and foreign governments. Its strategic location serves as a gateway to the Middle East, Africa, and Asia, offering unparalleled access to high-growth markets. The UAE Government Annual Meetings also saw the launch of the “InvestUAE” brand, a unified platform to position the UAE as a global investment hub. These efforts include campaigns targeting global investors, investment summits, high-profile international events, and digital marketing, all aimed at enhancing the UAE’s international presence, fostering new partnerships, and driving sustainable and diversified economic growth.

Infrastructure

World-class infrastructure has long been a cornerstone of the UAE’s investment appeal. With cutting-edge airports, ports, and financial hubs like the Dubai International Financial Centre (DIFC), the UAE ensures efficient logistics, supply chain management, and financial transactions. For example, Dubai has just approved the largest-ever budget cycle for 2025-2027 to especially address the infrastructure and digital transformation needs. The government’s ongoing investment in digital transformation enhances its competitiveness in the era of Industry 4.0.

Human capital investment

The UAE’s investor-friendly policies further bolster its attractiveness and commitment to invest in human capital building. The relaxation of visa requirements, the introduction of 100 percent foreign ownership in most sectors, and the Golden Visa program provide long-term residency options for investors, entrepreneurs, and skilled professionals. The country’s stable policy environment and high ranking in global ease-of-doing-business indexes instill confidence in foreign investors. By taking advantage of tax holidays, reduced import duties, and exemptions from personal income tax, investors can maximize returns while mitigating risks. Collaborating with local chambers of commerce and investment promotion agencies ensures timely insights into regulatory updates and new opportunities.

In addition, the UAE’s emphasis on nurturing a skilled and innovative talent pool ensures that investors have access to a highly educated, multicultural workforce. Initiatives like partnerships with leading global universities bolster the talent pipeline in specialized areas such as AI, renewable energy, and advanced manufacturing. Establishing R&D centers in collaboration with UAE institutions can foster innovation while providing access to emerging talent. Investors can further enhance their workforce capabilities by offering internships and training programs, ensuring alignment with the UAE’s vision for a knowledge-based economy.

Conclusion

The UAE’s National Investment Strategy 2031 signals not just an ambitious economic vision but a calculated and compelling framework for global investors seeking growth and innovation opportunities. By aligning national priorities with emerging global trends, the UAE has positioned itself as a vanguard of sustainable and diversified economic development. Its focus on transformative sectors like renewable energy, AI, and advanced manufacturing underscores a commitment to long-term resilience, environmental sustainability, and technological leadership.

The UAE offers more than favorable returns; it provides a chance to be part of a transformative journey that aligns profit-making with purpose-driven innovation. By embracing the opportunities laid out in this strategy, investors can contribute to shaping a future where economic growth goes hand in hand with technological progress and environmental stewardship. As the UAE continues to evolve as a leader in global trade, innovation, and sustainability, it stands poised to not only meet but exceed the aspirations of its ambitious 2031 goals.

• Previous Article UAE Golden Visa Program: A Gateway to Long-Term Residency
• Next Article Egypt’s Tax Reforms: Boosting Business Confidence and Export Growth