FDI Trends in the Middle East (2025)
Description
FDI Trends in the Middle East (2025)
Summary
Following a period of significant Foreign Direct Investment (FDI) growth from 2019 to 2023, the inflow of FDI into the Middle East (ME) has slowed down due to risk premiums affecting investor confidence. Capital market reforms, eased equity caps, and limited FDI screening adopted by the likes of Saudi Arabia and the UAE have made material differences to making nations more compatible with global markets. Still, FDI projects opened in the ME region declined by 10.6% YoY in 2024, according to GlobalData’s FDI Database.
Having experienced rapid FDI growth from 2019 to 2023, Foreign Direct Investment (FDI) into the Middle East (ME) has stunted as risk premiums weigh on investor confidence. Capital market reforms, eased equity caps, and limited FDI screening adopted by the likes of Saudi Arabia and the UAE have made material differences to making nations more compatible with global markets. Still, FDI projects opened in the ME region declined by 10.6% YoY in 2024, according to GlobalData’s FDI Database.
In 2025, Gulf Cooperation Council (GCC) and non-GCC nations face differed FDI dilemmas: capital and energy endowments boasted by GCC nations establish relative self-sufficiency when it comes to funding growth. For instance, the Abu Dhabi Investment Authority (ADI), Kuwait Investment Authority (KIA) and Public Investment Fund (PIF) of Saudia Arabia hold over $3 trillion in assets, accumulatively. However, FDI remains critical to diversification efforts through shared knowledge access, particularly in technology. Alternatively, funding deficits in non-GCC nations mean that Greenfield FDI is key for driving job creation.
In terms of announced projects, the Middle East’s distribution of inward FDI is highly concentrated in the UAE and Saudi Arabia, recording 642 and 594 announced inward FDI projects, respectively (2023-2025 YTD). Consistent with previous years, the US is the largest investor in the ME region, announcing 363 incoming projects (over the same time frame), followed by the UK (169), India (138), China (129) and France (60). Additionally, 23% of incoming projects in the ME region are in the renewable and alternative power sector, followed by tourism (22%) and electronics (21%). Despite elevated barriers to invest, multi-billion-dollar investments persist -
East Hope Group Co Ltd., a China-based manufacturing giant, plans to invest US $10 billion to establish a new alumina facility in Abu Dhabi, UAE.
Amarenco Solar Ltd, an Ireland-based renewable energy producer, plans to invest US$ 9.8 billion to build a new green hydrogen/ammonia production facility in Amman, Jordan.
Copenhagen Infrastructure Partners KS, a Denmark-based investment firm, plans to invest US$ 6 billion to develop a major green hydrogen project in Duqm, Oman, following a joint venture with Blue Power Partners (BPP).
In the short-term, GlobalData’s FDI team speculate that non-GCC nations will be forced to lean closer to European and Chinese FDI given oil revenues in GCC nations have waned-crude oil prices have fallen by ~19% (YTD), according to Investing.com. Longer-term, the Gaza peace treaty is expected restore a degree of investor confidence and foster stronger FDI flows. However, the Israel, Hamas, Hezbollah, Houthi conflict is far from stable and only represents one component of generationally-embedded geopolitical tension across Iran, Iraq, Israel, Jordan, Syria and Lebanon. Despite progress, investments remains risk-prone.
Scope
Summary
Following a period of significant Foreign Direct Investment (FDI) growth from 2019 to 2023, the inflow of FDI into the Middle East (ME) has slowed down due to risk premiums affecting investor confidence. Capital market reforms, eased equity caps, and limited FDI screening adopted by the likes of Saudi Arabia and the UAE have made material differences to making nations more compatible with global markets. Still, FDI projects opened in the ME region declined by 10.6% YoY in 2024, according to GlobalData’s FDI Database.
Having experienced rapid FDI growth from 2019 to 2023, Foreign Direct Investment (FDI) into the Middle East (ME) has stunted as risk premiums weigh on investor confidence. Capital market reforms, eased equity caps, and limited FDI screening adopted by the likes of Saudi Arabia and the UAE have made material differences to making nations more compatible with global markets. Still, FDI projects opened in the ME region declined by 10.6% YoY in 2024, according to GlobalData’s FDI Database.
In 2025, Gulf Cooperation Council (GCC) and non-GCC nations face differed FDI dilemmas: capital and energy endowments boasted by GCC nations establish relative self-sufficiency when it comes to funding growth. For instance, the Abu Dhabi Investment Authority (ADI), Kuwait Investment Authority (KIA) and Public Investment Fund (PIF) of Saudia Arabia hold over $3 trillion in assets, accumulatively. However, FDI remains critical to diversification efforts through shared knowledge access, particularly in technology. Alternatively, funding deficits in non-GCC nations mean that Greenfield FDI is key for driving job creation.
In terms of announced projects, the Middle East’s distribution of inward FDI is highly concentrated in the UAE and Saudi Arabia, recording 642 and 594 announced inward FDI projects, respectively (2023-2025 YTD). Consistent with previous years, the US is the largest investor in the ME region, announcing 363 incoming projects (over the same time frame), followed by the UK (169), India (138), China (129) and France (60). Additionally, 23% of incoming projects in the ME region are in the renewable and alternative power sector, followed by tourism (22%) and electronics (21%). Despite elevated barriers to invest, multi-billion-dollar investments persist -
East Hope Group Co Ltd., a China-based manufacturing giant, plans to invest US $10 billion to establish a new alumina facility in Abu Dhabi, UAE.
Amarenco Solar Ltd, an Ireland-based renewable energy producer, plans to invest US$ 9.8 billion to build a new green hydrogen/ammonia production facility in Amman, Jordan.
Copenhagen Infrastructure Partners KS, a Denmark-based investment firm, plans to invest US$ 6 billion to develop a major green hydrogen project in Duqm, Oman, following a joint venture with Blue Power Partners (BPP).
In the short-term, GlobalData’s FDI team speculate that non-GCC nations will be forced to lean closer to European and Chinese FDI given oil revenues in GCC nations have waned-crude oil prices have fallen by ~19% (YTD), according to Investing.com. Longer-term, the Gaza peace treaty is expected restore a degree of investor confidence and foster stronger FDI flows. However, the Israel, Hamas, Hezbollah, Houthi conflict is far from stable and only represents one component of generationally-embedded geopolitical tension across Iran, Iraq, Israel, Jordan, Syria and Lebanon. Despite progress, investments remains risk-prone.
Scope
- This reports provides an overview of FDI trends in Middle East. The report will also provide The Middle East FDI narrative.
- This report will help you to understand the trends of FDI in Middle East.
- The report will also help in understanding the Middle East FDI narrative.
- Identify the top sectors and top inward FDI hotspots in Middle East.
Table of Contents
12 Pages
- Executive Summary
- The Global FDI Narrative
- Top Global FDI Hotspots in Q3 2025: Developed vs Developing Markets
- The Middle East FDI Narrative
- Inward FDI Hotspots in Middle East
- Sectoral Disparities: Unpacking the Realities of Middle East’s FDI Activity
- Top Investors
- Appendices
- Methodology
- Contact us
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